Was it...
... Mark Kennedy?
... John "I'm not Karl Marx" Hinderaker?
... Strommie's cigar?
... the guy with the tricornered cap?
... or was it...
This is Buttercup, who according to some was the reason nobody seemed to want to come down into the ampitheater. (Heat, schmeat.) If you saw her, that nice kid on the other end of this dog was Littlest Scholar, with Mrs. S no doubt nearby (hers is the loudest voice.)

Thanks to all who attended -- except for eating all the food, since I got none -- and for the hilarity of the third hour. Thanks to the Patriot and our sponsors for giving us a great venue, good advertising, and a huge crowd. We had a blast. See you at the Fair.

Can someone get the dog away from my computer, please? First she steals my fans...

...will be at The Patriot Appreciation picnic at Staring Lake Park in Eden Prairie. Yes, my two reluctant travelers, Mrs. and Littlest, will be in tow, along with Buttercup the Micturating Menace. The NARNies will be on live at our usual time, noon to 3pm. We're making a day of it; why don't you come join us? Bring a blanket or chair, spread out on a nice warm summer day, and enjoy the festivities. They start at 11 (you can enjoy Strommie for the first hour).

As everyone else is warning you, if you are comingr from the northwest, 494 is closed today for repairs. 169 to 212S is your best bet (and, given the work on the bridge out by Corcoran on the Crow Wing River bridge, you might want to slide down from St. Cloud on Highway 10. Allow yourself an extra 20 minutes if you're meeting up with friends.)

The markets are soft today after the GDP report came in with 3.4% growth. But buried in the report itself is good news.

The real change in private inventories subtracted 2.32 percentage points from the second-quarter change in real GDP after adding 0.29 percentage point to the first-quarter change. Private businesses reduced inventories $6.4 billion in the second quarter, following increases of $58.2 billion in the first quarter and $50.1 billion in the fourth.

Real final sales of domestic product -- GDP less change in private inventories -- increased 5.8 percent in the second quarter, compared with an increase of 3.5 percent in the first.

As my dad would say, "in English, please?" It means that in real terms, businesses who had stockpiled lots of inventory over the previous six months sold it all off in the previous quarter. It seems unlikely that they would continue to disgorge inventories (already at the 1.3 benchmark as a ratio to sales), so production should pick up again in the next quarter. A 5.8% growth of final sales is the best since the second quarter of 2003.

This report also showed a turnaround in net exports, with imports decreasing 2% in the quarter. This and the Chinese repeg of the yuan might mark the end of that drain on GDP growth going forward.

The bond market has reacted towards the notion that the Fed would continue to increase interest rates by increasing yields at the long end of the yield curve. The market is already prepared for a 4% Fed funds rate by year-end; it's beginning to put non-zero probabilities on a 4.25% rate.

Craig has responded to the public goods post, and I think we're agreed on the economics of this. He argues though, that the political dimension of the debate might not allow as nuanced an analysis as my previous post offers.

I’m convinced the King is correct, but “King’s can opener” is that he assumes his argument will also convince the likes of state-wide smoking ban sponsors Ron Latz and Doug Meslow, new urbanists that live and breathe for light rail and legislators that never saw bonding for a stadium, a civic center or a par-three golf course that wasn’t a great investment. Until those folks see the light, I’ll stick to a problem characteristic approach -- at least to a point.

Yes, those folks do exist. And as I argued in my post, you have to be aware of the incentives of the people to whom you give advice. I have some bruises from good advice badly used in Ukraine and elsewhere.

But the problem with trying to draw a bright line that says "these are public goods"/"these are private goods" is exemplified in the comment made by regular reader Michael on my post.

Ok, so... what about roads? You say they are a public good, but too many of them will create diminishing returns right? We don’t want to pave all of Minnesota.

Isn't in the public interest, in the long run, to have enough public roads that are well maintained plus alternatives to roads like tollways and mass transit?

Isn't it putting the cart before the horse, so to speak, to create an alternative if the main public good is not well maintained?

We don't have a public good called "roads". We have roads which are publicly maintained and others which are privately maintained. We sometimes contract out for a road and sometimes not. Some roads are subject to tolls and some are not.

And even then it's not so clear. A private road for a townhome association still has city provision of some services along it, such as garbage pickup, yet might be snowplowed by the association, or contracted to the city to plow.

Each case is unique. Each has the possibility of a variety of institutional arrangements for the provision of the good, each of which has a set of benefits and costs. Craig wants a bright line in order to say "hands off" to the 80% of goods in which government should never intrude.

A product characteristic approach (legislation is the “product“) puts the burden of proof on the sponsor of legislation to show why/how the legislation is a “public good” rather than (as is currently the case) making the burden of proof fall on those that oppose legislation to show why it is bad.

Craig's hurdle would be met time and time again by the supporters of larger government; Michael's line of reasoning gives rise not only to public transportation but land restrictions and environmentalism. All from the start that "roads pass the Fishsticks test". But a theory of Leviathan government would argue for something that doesn't admit the possibility of the 20%.

A deeper problem in this method Craig uses is that it seems quite consequentialist. If the social welfare is improved by public provision, then we use the tax power of the state, even if for a substantial minority of the populace the tax is a confiscation to which they would never have agreed. I find that position difficult to accept ethically. I prefer instead to think constitutionally, to ask what are the rules by which a taxpayer, who is sometimes a beneficiary of one of these decisions and sometimes not, can control the confiscatory powers of the state. I find it dangerous, as a political rule, to imagine that we would write a constitutional rule that says "if X is found to be a public good, you may tax for its provision." Who does the finding? If you say "if X has externalities, ..." you have the problem of not knowing where the relevant scope of externalities are. If you say "if X is indivisible,..." over what range of taxpayers does the indivisibility have to extend? Since this discussion is really about "what is the proper scope of government action in the allocative function of an economy," those questions are vital and lie at a state's constitutional foundation.

I think, btw, that TABOR is a fundamental change that puts that discussion at the fore, in much the same way that Prop 13 did so for California 25 years ago. If Craig wonders how to make my concerns practical to live in the world we are in, TABOR is an answer. We cannot avoid the grasp of Leviathan with any set of bright lines defining what are and are not public goods. Even if the lines could be drawn -- which I contend they cannot, logically -- Leviathan would ignore them.

The press both in Ukraine and outside is making a big deal about the lavish lifestyle of Andriy Yushchenko, son of President Viktor Yushchenko. The short story: The press investigated his use of a BMW M6 that is quite rare and quite expensive in Ukraine, and his possession of a platinum-shell cellphone popular with the oligarchs of Ukraine and Russia. His father is rather put out by this and lights into the press at a conference, using rather harsh words to tell them to butt out of his family's private affairs. Letters of protest and explanation (not an apology) are exchanged.

It's pretty rough stuff, and undoubtedly part of it is the stress that Yushchenko pere is feeling with his struggles in government. As Taras Kuzio noted in testimony to Congress on Wednesday, it's imperative that Yushchenko remain seen as somehow different than the politicians of the Kuchma era. He has tried to appear above the fray,

Meanwhile the government continues to act like it needs a lesson in principles of economics.

Yulia Tymoshenko stated that 2005 harvest grain will be exported by state traders " State Reserve Committee and JSC Khlib Ukrainy. The objective of this is to minimize involvement of intermediaries who buy grain from farmers at very low prices and sell it at world prices. "The government is not looking to pressure grain traders," added Economy Minister Serhiy Teryokhin. "We are simply creating a system that will not allow a number of major grain traders to dictate prices to producers." On this issue, Tymoshenko and Teryokhin have the same position as the Agrarian Policy minister, Socialist Party member Oleksandr Baranivskiy, who has recently had serious arguments on other issues with the two officials. SPU leader Oleksandr Moroz also insists on holding the price through the state acquisitions: "If the government does that, the grain traders will not lower the prices lower than the state. Farmers should be given an opportunity to sell grain to the state at the price they like."

Scott Clark correctly calls this a big part of the problem. Has nobody in Ukraine learned the word monopsony? I might have chalked up things to a bad appointment in the privatization minister, but these analyses suggest something far worse.

And now there's a report of an attempt on Tymoshenko's life. Plus ca change...

There's much handwringing over the appointment of a man to chair the women's studies program at the University of Washington (link only for subscribers to the Chronicle of Higher Ed). It's the first male to run a women's studies program that has a PhD (there are ten of those) and perhaps only the second overall. He is not a member of the department's faculty.

Nancy J. Kenney, an associate professor of women's studies at Washington, said that while Mr. Allen is "a wonderful man," she found the decision to name him chairman "somewhat depressing." She said she lamented that "after all of these years, there isn't a different alternative out there."

"There simply aren't enough women of the right type and interest to take over this position," she said.

Mr. Allen, the new chair, suggests that men can work on women's issues as much as whites can work on antiracist issues. I think maybe women are smart enough to know that being department chairperson is a thankless task. My guess is Mr. Allen will find it particularly so.

I needed a book for some work I did earlier last week. I was going to do this out of town; I discovered Tuesday last week that my copy of the book had been, um, borrowed. So I fire up Amazon to get another copy, and it's not in their warehouse. But, aha! there's a copy in a private seller's store in North Carolina. I expedite shipping and it arrives Friday. Crisis averted.

As Hal Varian notes, used goods are now 23% of sales at Amazon. Book publishers cringe at this, but Varian notes that the spread of the used market may in fact help sales of new books.

When used books are substituted for new ones, the seller faces competition from the secondhand market, reducing the price it can set for new books. But there's another effect: the presence of a market for used books makes consumers more willing to buy new books, because they can easily dispose of them later.

A car salesman will often highlight the resale value of a new car, yet booksellers rarely mention the resale value of a new book. Nevertheless, the value can be quite significant.

This is particularly true in textbook markets, where many books cost well over $100. Judith Chevalier of the Yale School of Management and Austan Goolsbee at the Chicago Business School recently examined this market and found that college bookstores typically buy used books at 50 percent of cover price and resell them at 75 percent of cover price. Hence the price to "rent" a book for a semester is about $50 for a $100 book.

I see another example of this here in St. Cloud. My favorite music shop, Electric Fetus, keeps a nice collection of used CDs. They advertise that they buy, sell and trade, unlike Best Buy or Media Play here in town. I get fairly decent value for my CDs, somewhere between $2.50 and $4 (occasionally $5), which combined with the cheap storage of ripped MP3s gives me the opportunity to buy and keep some additional music I might not otherwise. I no longer need 8 or 9 of 10 songs to be good. I could buy one where five songs I like, rip them and sell back the CD. (I don't think anyone has ever claimed that one loses the copyright to the MP3 you made from your own CD if you lose or sell the CD, right?) Combined with some nice discounting from the store and my relationship with the staff -- which might fetch a slightly better price in selling my used stuff as well as their holding me a copy of something they know I want -- the cost of my music love is reduced.

What about the used books and CDs, though? Do they displace sales of new? Varian says not, citing this study. A 10% increase in new book prices only raises used book sales by 1%. Amazon is gaining revenue from selling used books as well as new, even though a used book generates less than 60% of the profit of a new one.

H/T: Liberal Order.

It seems like Craig Westover and I speak more often than I speak with other bloggers, because we have a good deal in common. This includes a relatively libertarian view on social issues and in the main on economic issues as well. So when Craig first sent me an email over the weekend outlining the positions he takes in this post, I realized here was another chance at some education.

My own education on public goods comes from a series of people who studied at the University of Virginia in the 1960s. Over time three of them -- Craig Stubblebine, Tom Borcherding, and Tom Willett -- instructed me in public finance, public choice and public policy; I read a great deal of James Buchanan, Gordon Tullock, Geoffrey Brennan and other writers of the school. Oddly enough, the assistantship I turned down last to take my fellowship at Claremont was from UVa. So it seems to have been predestined that I would fall into that camp.

Stubblebine was my public finance professor, and he first got me to think about the nature of public goods. When I said what I said on the air, it was his teaching that was in my mind. He's of course not to blame for my misunderstanding of his teachings, if I have. But I think I have this right.

King did however, make one statement that surprised me; that is, King stated in passing that there is no such thing as a public good. To the pure libertarian, that's true, but sticking to that "truth" as a matter of policy leaves the door open for politicians to step into the vacuum and define “public good” anyway they want to -- with usually disastrous political and economic repercussions.

Now part of me simply doesn't care about shading a "truth" in order to be sure that public policy isn't hosed up by political repercussions, but since Buchanan and Richard Wagner wrote Democracy in Deficit -- a wonderful, slender book that argues that Keynes let the genie out of the bottle by providing intellectual cover for deficit spending -- I can't let myself off so easily.

Let me clarify what this is not: This is not about my taking a pure libertarian position. That is, one could argue that public goods do exist as a unique, objectively determined category and still argue as a matter of morality that one cannot support the state. Nor am I arguing for an anarcho-capitalist state or a minarchy. (One of these days I will come back to minarchy, because Craig believes himself a classical liberal but I do not think he's a minarchist. I'd like him to explain the difference. Call this a marker for another debate.)

Stubblebine did have us read Buchanan's Demand and Supply of Public Goods, which makes the case I'm making. Buchanan has a response to the criteria which Craig, borrowing from Charles Murray (for whom I share Craig's respect and admiration), promulgates:

1. A public good must be non-exclusive, similar to second criteria above. A public good benefits everyone or anyone. Think national defense. Everyone benefits.
2. A public good can be consumed by one person without diminishing its availability to others.
3. A public good has a substantial neighborhood effect that is difficult to charge for. For example, roads benefit people that do not drive in that most goods delivered to retail outlets arrive by truck. Therefore, using general fund dollars to pay for roads can be a “public good.”

I remember reading this in Murray and thinking it wrong, and I want to set Craig on a path awy from Murray in this regard.

One major problem Craig has, and the point I was trying to make (too quickly) with David Strom was that exclusivity and divisiblility isn't an either/or proposition. Buchanan offers this graph to explain the spectra of public goods that are available. Along the vertical axis is divisibility, and along the horizontal axis is the size of the group negotiating for provision of the good. A very large group negotiating over a good that is indivisible -- the second of the Murray/Westover criteria -- would be characterized as a pure public good, and near the point 0' on the graph. A pure private good would be near 0 -- there's a great deal of divisibility and excludability (the latter a statement about technology more than anything else) and the interacting group is quite small.

I used a rather silly example on the radio of liking David Strom's shirt as an example of an externality. It certainly is (though think: Mini-skirt) and I certainly could negotiate with him to wear the shirt more often in return for some small payment. Does that externality make it a public good? But doesn't the shirt generate a "neighborhood effect" as Craig lists as criterion 3? What's the size of the neighborhood needed to make the case to collectively provide the good? Should there be a "Strom shirt district" consisting of those in close enough contact with David that David could tax to get enough money to get him to wear that particular shirt?

There are other, less silly examples though, as characterized by points 2, 3, and 4 on the graph. Buchanan describes them:

(2) Partially divisible goods and services, with interactions limited to groups of critically small size For a good or service that may be classified in this way, there must be some substitutability among consumption units, as among separate persons, but this is not one-for-one. If the total supply available to the group is fixed, the increase in consumption by one person will reduce the amount available to some other person, or persons, but not precisely by one unit, as in the purely private-good case, and not by zero, as in the purely public-good case. The "nonprivateness" extends, however, only over a relatively small number of persons. As the group size extends beyond these limits, all publicness elements vanish.

Examples of goods and services falling in this classification are those that involve small-number externalities. Fire extinguishers may be an illustration. A transfer of a fire extinguisher to my neighbor does not reduce my own fire protection from the extinguisher to zero, as would be the case with a purely private or divisible good or service. My neighbor's possession of the extinguisher continues to reduce somewhat the probability of fire damage to my property. However, this interaction is limited in range. The transfer of a fire extinguisher to someone who lives three miles from my house does reduce my own benefits from that extinguisher to zero, in which case the exchange becomes equivalent to that of a purely private good.

(3) Partially divisible goods and services, with interactions extending over groups of critically large size This category includes the large-number externalities, or Pigovian externalities. There are both publicness and privateness elements in a good or service, but the publicness or indivisibility elements extend over a group that is critically large in size. An example is inoculation against communicable disease. The securing of a shot provides me with some privately divisible benefits but, also, it provides some benefits to all other potentially exposed persons in a large group. By comparison with the small-number interaction, in this instance many persons are effectively my neighbors. As we shall demonstrate later, the organizational-institutional differences between goods and services falling in (2) and (3) may be significant.

(4) Fully indivisible goods and services, but with interaction limited to groups of critically small size This includes those goods and services that are characterized by the fact that there can be no increase or decrease in the quantity available for one person independently, so long as we are limited to groups of small size. Outside the common-sharing group, however, this pure publicness does not hold, and among separate small groups there may be no publicness elements at all.

Examples for this category are drawn from club-like arrangements, which provide the organizational norm for this set of goods and services. Swimming pools may be mentioned. The single pool may be equally available to all members of the swimming club, provided only that the size of the membership is limited.

So where does light rail go? It is certainly not a pure public good, and limiting the size of people on the train is critical to prevent overcrowding.

The purpose of broadening the classifications, Buchanan argues, is not to create a five-part rule or a ten-part rule, but that one simply can't use characteristics of goods to describe their publicness.

Any positive approach to this question must proceed on a case-by-case basis and provisional conclusions reached only after careful comparison of institutional alternatives in the broadest sense. The descriptive characteristics of a good or service, the technology of common-sharing and the range of such sharing, are important determinants of organizational efficiency. Care should be taken, however, not to presume that these characteristics, taken alone, allow a priori judgments to be made. The pound of ceteris paribus must be used with caution here, since other things are not at all likely to remain equal over the institutional variants that may be examined. The predicted working properties of the institutional structures, imposed as constraints on individual behavior, must be evaluated.

That is to say, the decision to provide some goods collectively because "market failure" would lead to non-optimal provision of the goods cannot be decided a priori. You must compare market failure to government failure. We don't decide to let David set the number of times he wears his colorful summer shirt because the externalities are de minimus. We do so because the optimal amount is closer met (at lower cost) by private market decisionmaking than collective decisionmaking. If a set of private market institutions would underprovide light rail by 50% (however you would measure this) but public provision leads to 100% oversupply, does it matter too much to the discussion whether light rail is category 2 or 3, or 5? Wouldn't that be the right way to handle the question of what is a "public health" problem, ratherthan the list of problem characteristics Craig offers?

As Stubblebine often said in his class, "a thing is neither good nor bad save the alternatives make it so." The argument over the alternatives isn't about the characteristics of goods, but the choice of institutions.

I don't write often about military issues or our foreign policy in Iraq and Afghanistan, not because I'm disinterested but because there are few places where I have anything to add to the conversation that hundreds of other bloggers can't say. But I do read, and a new site pointed out ti me by the Public Affairs Office of the U.S. Central Command is a website providing "up-to-date information on what the Coalition is doing in Operation Iraqi Freedom and Operation Enduring Freedom." The "what extremists are saying" page is worth a visit all by itself. I will put them in the blogroll, along with a link to T.W. Budig's Capital Roundup, which is good as exactly that, a quick roundup. Good on him to remember Dave Kleis' first attempt at the St. Cloud mayorship.

Margaret's got that WordPress thingy working. Check out her and David's new digs...

UPDATE: Speaking of new digs, I have to wonder what Hugh paid for this. Hubbahubba.

And why I have a headache.

LONDON (Reuters) - The word "fail" should be banned from use in classrooms and replaced with the phrase "deferred success" to avoid demoralising pupils, a group of teachers has proposed.

Members of the Professional Association of Teachers (PAT) argue that telling pupils they have failed can put them off learning for life.

A spokesman for the group said it wanted to avoid labelling children. "We recognise that children do not necessarily achieve success first time," he said.

"But I recognise that we can't just strike a word from the dictionary," he said.

The PAT said it would debate the proposal at a conference next week.

Taranto, come home. Oddly Enough is calling. Sheesh.

Douglas Bass points out to us that the Pennsylvania House has passed a resolution that calls for hearings

to examine the academic atmosphere and the degree to which faculty have the opportunity to instruct and students have the opportunity to learn in an environment conducive to the pursuit of knowledge and truth at State-related and State-owned colleges and universities and community colleges in this Commonwealth.

Douglas notes that he and I don't particularly like this; this preamble with "pursuit of knowledge and truth" belongs in a comic strip rather than a legislative resolution. The opponents, alas, don't sound much better. Inside Higher Ed reports on a letter sent to the PA House by William Cutler, president of the faculty union at Temple University.

To be a forum for the exchange of ideas of all kinds, a college or university must be free from the threat of oversight by those with a particular cultural or political agenda. This is not to say that a public institution of higher education should be unaccountable for how it spends precious tax dollars. Far from it. But it is to say that the intellectual climate on college and university campuses will be far less open if students and professors feel that their work is being monitored by those who answer to a particular group or set of constituents.

Yet some students and professors already feel their work is being monitored, by other faculty who wish to make war on those who do not support the dominant paradigm of the radicalized modern American campus. I continue to argue that the proper forum for investigation of those grievances should be the campuses themselves who commit themselves to a vision of academic freedom such as that offered by Stanley Fish in Save the World on Your Own Time.

We are in the pursuit of truth business. All other agendas need to be put aside.

A new case FIRE is pursuing involves a student at William Patterson University in New Jersey, who objected to receiving an invitation to a film described as a "lesbian relationship story." FIRE has posted both the email the student received and his private reply to the faculty member. The student is in his sixties, and also works at the university, and received the email from the campus' announcement email list. The university placed a letter of reprimand in his permanent employee file, claiming that calling the film a "perversion" was harassment of the faculty member who sent the annoncement.

Wendy McElroy writes about the case:

First, the entire weight of the state's legal authority is being directed at quashing Daniel's personal response to an unsolicited e-mail — an e-mail that invited feedback by instructing recipients on how best to do so. The university obviously feels the need to draw a big gun on this little man.

Second, Lukianoff refers to Daniel as a student; both Speert and Harvey call him an employee. Daniel is legitimately both, but in the capacity of student he undoubtedly has more established procedural "rights" against the university. The attorney general's office clearly wishes to reduce the "rights" it needs to recognize.

But as Lukianoff states: "Even in a workplace, it is ridiculous to conclude that a one-time e-mail constitutes unlawful discrimination and harassment. It is especially ridiculous to apply such a policy to a working student at an institution of higher education that has a special responsibility to ensure academic freedom."

Indeed. And the state's attorney general has decided to permit the university's claim to due process protection and ignore the student's First Amendment rights.

There's lots more here.

Doc Palmer thinks he spends too much money, perhaps because of low interest rates. He's developed a quiz to test me.

1. How many books have you bought but not read (yet)? It depends. Some books I buy are for reference; I know I'll need them some day for my research -- books on central banks, or econometrics, for example -- but they might sit for months before I use them. If that was included, you could be looking at 40 or so. If it's simply books I intend to read sitting in the pile behind my recliner, that pile has 11 books right now.
   
2. How many unopened CDs do you have? 6. I just looked. Since I buy online and get volume and shipping discounts, I think this makes sense. I play one CD over and over until I feel the need to open the next.
   
3. How many times have you bought a book or CD, only to discover you already own it? Three times -- two CDs and one book. One was intentional to have the CD both at home and in my car.
   
4. How many unopened DVDs do you have? None. I really don't buy many DVDs, owning maybe ten.
   
5. How many tools or appliances have you bought in case you might "need" them and not used yet? Traditional tools? I'm of the Red Green school of repair -- I only own duct tape. Even that, I don't use much. I just go buy a replacement. Appliances for the house, no, because Mrs. S is adamant about not having clutter. Extra computer stuff, OTOH, I'm bad. A closet full.

Think about, however, whether this is economically rational. As David Altig points out here, the flipside of corporations being slow to invest out of retained earnings in this phase of expansion has been that business savings in America is up. This additional savings might be keeping interest rates low and generating investment in real assets. Those traditionally are houses and land, and precious metals and jewels, etc. But these items John describes above also items that do not lose value over time. I recently found in a drawer a CD I must have bought years before; if anything, opening and playing it now has been even more enjoyable.

If real interest rates are low, purchasing assets or even consumer goods with little depreciation even when used seems to make some sense.

Peter Swanson writes about the opting-out of high school students from military recruitment. I have a suggestion. Let's have the Minneapolis School District create a phone line like the one we call for opting out of commercial phone solicitations, and any high-schooler who wants not to get called simply calls that line, leaves a name, Social Security number and phone number, and the school district can pass that on to the recruiter.

Of course, this would probably lead to a levy vote to pay for the phone line. So your school district property tax could rise to make it easier for students not to be recruited to the military. But that's a good thing, right?

[/irony]

Can someone also please explain the connection of the following quote of a school board member?

"Everyone knows military recruiters are going after students that are poor and students of color. That's many of our students," Board Member Peggy Flanagan said. "When I talk to students, it's what they're passionate about."

What are the students passionate about? That only poor students are being called? Could it possibly be because that's the group with a lower reservation wage?

Craig Westover posts an analysis of the dueling conservatives on the pages of the STrib. (I can almost imagine the editorial board's glee over this; one might call it a Boydgasm.) Craig writes:

In his essay “Why I Am Not a Conservative,” Friedrich Hayek notes that conservatism traditionally lacks any agenda other than to resist progressivism. Consequently, any time conservatism compromises with progressivism the end result is movement to the left.

Link added by me, and all I wish to contribute is this graph showing the change in the cost of government (computations here used this document for previous years, and then the fiscal staff analysis of the tax bill HF 138 to add on the new taxfeechargeotherrevenue.)
You can wave your hands and say "hey, it's just two cents on a Hamilton" if you like. I hear you can get a baseball stadium for around that price. But the point made by Eibensteiner and Hinderaker, that

... Pawlenty has been spectacularly successful in containing state spending. In his first year in office, he closed a $4.5 billion deficit -- without raising taxes by a nickel. Beween 1994 and 2002, spending in Minnesota ballooned out of control, rising an average of 13.4 percent per biennium. Under Pawlenty's leadership, the rate of growth has been cut nearly in half, to 7.3 percent per biennium, bringing it in line with population growth and inflation.

...isn't the case when what one is grading against instead is the share of Minnesotans' incomes that government takes. That means, in fact, that the government isn't just taking population growth and inflation, it's also taking its cut of the productivity gains we create as well.

Are we doomed to state and local government in Minnesota perpetually costing us $.16 of each dollar we earn? That downward tail on the graph is the projection that we're told will come in the 2008-09 biennium, and we're to believe it will be created by the re-election of Tim Pawlenty,

What about the tax increase on cigarettes that prompted Wigley and Strom's attack? It constitutes a mere 1.3 percent of the state's budget. Perfection is great, but it is hard to achieve when the tax-and-spend party controls one house of the Legislature.

...who's sold as Governor Straddle.

Thanks if you came by today and still came back tonight. I've had very little access from the remote site we're at today and tomorrow, so posting will have to remain light until tomorrow late PM or Wednesday morning. I can connect now but am simply too tired to say anything useful. Sorry.

UPDATE: Did at least get the message about a baby Frater. Congrats, Chad!

I get double duty on The Patriot tomorrow. David Strom has invited me in the 9am hour on Taxpayers League Live. I'll be the one with less coffee. Then after a break, NARN is back at noon. Probably some yuan talk and I might finally give an opinion on Judge Roberts; we're still angling on the guest at this moment. If no guest, it may well be an "ask the economist" hour, so call the station with yours. (Not in radio range? Catch the stream.)

Probably a post or two over the weekend this weekend, as business will probably keep me from much blogging Monday and Tuesday. I may have to ask Captain Ed where to rent one of those guest writers...

Who do you think won the BBC's poll of the World's Greatest Philosophers?

Karl Marx.

Stumbling and Mumbling thinks it's because the anti-Marx vote was split, but it's hard to find a coalition that would work to knock him out.

(h/t: Mahalanobis)

I got this from Chart of the Day. I'm not in the slightest sold on the prefatory "due in part to currency manipulation". I once heard Barry Eichengreen form the question "is the exchange rate a price or a promise?" (I cannot figure out who made that formulation first.) China up to now had promised to convert RMB to dollars at 8.28 to the dollar, and honored that promise. Yesterday they decided no longer to honor that promise, and to manage the external value of the yuan using a target band and a basket of currencies. Which exchange rate regime constitutes manipulation to you?

That's not to argue against the central bank's actions yesterday. It is simply to say that words mean something, and that calling China's fixed rate "manipulation" is more than a little misleading.

The headline in the local paper was that state representative Joe Opatz is resigning from the legislature to take an interim post as president of Central Lakes College. Joe is an administrator at SCSU, though his post as associate VP for academic affairs has largely been one of helping provide the university with information from St. Paul.

Interestingly, under the rules in MnSCU, he cannot become the permanent president at CLC. He says, "I'm hopeful that there will be more opportunities in higher education after this." One possibility could be right back here, as current President Roy Saigo has had the position for some time and is approaching his 65th birthday.

So it is possible that all three St. Cloud legislators could turn over in the next 18 months, if Senator Dave Kleis wins the mayor's race here in the Cloud and Jim Knoblach gets the Republican nomination for the U.S. House race. As the article notes, those three have been our legislators since January 1995.

People ask me about Opatz, and I have to say I've liked him as a colleague (and an occassional reader here). He is interested and thinks a good bit about higher education policy, and while we disagree some on funding and aid issues those discussions have always been pleasant. He has largely been faithful to the DFL caucus in the House and thus I'm not as happy with him as a legislator. But St. Cloud is a funny place: We're considered a conservative town, yet Opatz and Ellenbecker have been elected here several times (in the latter case only once as mayor, but was a top candidate in city council elections for years before). It's anybody's guess who will replace him.

The Chinese yuan, long pegged to the U.S. dollar at RMB8.28=$1, was revalued by 2.1% and will now be allowed to move withing a 0.3% trading band. The U.S. Treasury secretary, John Snow, seems quite pleased:

I welcome China's announcement today that it is adopting a more flexible exchange rate regime.

As we have said, reform of China's currency regime is important for China and the international financial system.

I particularly noted China's objective of allowing the market to fully play its role in resource allocation as well as "to put in place and further strengthen the managed floating exchange regime based on market supply and demand."

We will monitor China's managed float as their exchange rate moves to alignment with underlying market conditions.

But as many writers are noting, such as Nouriel Roubini, this is a very small move, and the tightness of the trading band means that all we've gotten is a small decrease in the rate of growth of Chinese exports. Bond prices slumped this morning, but I don't see much else in the way of impact on the U.S. There needs to be another, larger move before we feel anything here.
The impact on China is quite large, however. David Altig, blogging with Roubini above -- you'd do well to read back to their conversation throughout the day, as I've been -- links to William Polley's finding that the Chinese decided a few days ago to loosen up capital controls. Polley notes that it should have been the tip that the exchange rate move from the Chinese was coming, because free trade, free capital flows and fixed exchange rates are not supposed to exist side by side. This "unholy trinity" (named by Benjamin Cohen in 1993, I believe) is often cited as a reason for floating exchange rates. But work done with Tom Willett and others (to which I've made some very minor contributions) suggest that there are intermediate regimes that can in fact work. The question is whether China (and later in the day, Malaysia) has in fact found one that will work. Like Tom, I think optimal currency area approaches to this question work best, and on that basis the current strategy at least isn't harmful.

My guess is that in the short run, if the exchange rate is going to be allowed to appreciate further, China will first allow the trading band to widen from the 0.3%, and less frequently chane the mix of currencies in the new basket against which the exchange rate of the yuan will be set.

It's worth noting that so far the credit rating agencies aren't downgrading Chinese debt. That may well be because of the small size of the appreciation. A larger exchange rate move along with freer capital markets in China could have caused a downgrade.

I almost should make this a daily event: Find the best blog post of the day that illustrates a point in economics, written by a non-economist. Fellow NARNie Chad the Elder would win more than one, and today's entry on pay for non-profits and Mike Hatch's pursuit of a lawsuit against director pay levels would be a winner.

In some respects, the need for a strong board with high caliber members is greater at non-profits than at regular businesses. There are no shareholders with a stake in the business to keep tabs on the board and bring pressure against it if results don't meet expectations as there are at for-profit companies. There is no stock price to use to gauge performance (however imperfect that measurement tool can be). It's in the best interests of non-profits like Medica (and their customers) to put together the best board they can. And that usually doesn't come cheap.

If you hear refrains of our discussion on Q-Comp and merit pay from yesterday, pat yourself on the back.

Phil Miller wants me to blog about movies, forwarding a meme started I believe by Tyler Cowen. I should ignore him because he spells my name worse than KAR, but what the heck? It sounds like fun. I'm qualifying this list by movies I saw in first run, not ones I found later on scavenging NetFlix. Thus no Casablancas or Gone with the Winds. The only one I might violate the rule for is The Fountainhead. This list is chronological as well because I'm thinking which movies I like best at various stages of my life.

Battle of Britain (1969) -- imagine going to this movie in a big theater in the middle of the afternoon with your best friend the fellow war geek. It was the first favorite (beating out Green Berets, largely because my dad took my brother with us and he was scared to death and ruined it). My grandfather slept in the pickup and waited for us.

Patton (1970) -- early on, I'm heavy into war movies. Unlike the other, this one has staying power. If it's on, I'm not moving until the jeep crashes.

The Groove Tube (1975) -- inexplicably, I take a girl out on our second date to this movie. I had never laughed so hard at a movie before. There was no third date, and I didn't care. I know this movie will be on nobody's list. I enter college this year.

Wizards (1977) -- not that LoTR wasn't good too, but this is the best Bakshi for my money. Stays with me longer than anyting Fritz Lang or Terry Gilliam did (though, see below).

Apocalypse Now (1979) -- last great war movie I saw until Saving Private Ryan which doesn't make this list because for some reason I never saw it in a theater. I also liked Gallipoli, but it's not in this class.

Brazil (1985) -- best. dark. comedy. ever. The hole in this list is graduate school and my first marriage.

Tucker (1988) -- a much better film than ever given credit for. I go back and forth between this and The Hudsucker Proxy, but I think this one's better. Both of them are great, underappreciated films by great directors.

Other People's Money (1991) -- I'm sure I've blogged about this movie before. Where have you gone, Penelope? I still use in class the scene from this stockholder meeting, rather than the one in Greed.

Kolya (1996) -- I cannot tell you how much I love this movie. Prague, music, the Velvet Revolution, the apartment and the despair. Best Czech movie ever, with Divided We Fall a distant second. A good friend of mine with whom I can talk an hour about baseball began lunch one day saying he saw this, and we never got to baseball.

Life is Beautiful (1997) -- movie is beautiful.

Enemy of the State (1998) -- a more frigtening movie that that A. Something Shamalamadingdongdude ever made. Whatever happened to Tony Scott?

The Big Lebowski (1998) -- came out while I was in Indonesia one summer and I bought a copy on the street. Must have watched it 20 times in three weeks.

The Three Seasons (1999) -- the one movie on this list you've likely not even heard of. Vietnamese film, beautifully filmed, and you can even get yourself to like Harvey Keitel. There aren't many movies like that, now are there?

Billy Elliott (2000) -- every teen can see himself in Billy, and no teen would want to admit it. Got a teen? Pop this in.

Snatch (2000) -- I have no idea why I like this movie; I want to smack Brad Pitt out of that accent. But this is a great movie. Every good role actor seems to be in it.

Lagaan (2001) -- a Bollywood musical, three hours long, about cricket and unfair taxation. Think "Seven Brides for Seven Tax Collectors." OK, don't. Just watch it. There's even an intermission.

Ararat (2002) -- I'm not sure this is my favorite Egoyan film, but it's the best and most meaningful. (The closest thing to it for relating to my heritage is Elia Kazan's America, America.) I'm awfully fond of Calendar as well, but this blows that out of the water.

Sideways (2004) -- OK, so shoot me, but I identify with Paul Giamatti. Except I still drink merlot.

I've decided tagging is the blog answer to chain letters, so readers can decide if they want to pick this up for themselves.

Their children are getting quite a bargain. I was at a meeting in its campus center and as I came down a staircase I look up and see this hanging on the wall. (I've shrunk the image to keep any possible offensiveness to a minimum. You should open it to believe what you're seeing.)I actually got to the bottom of the stairs before I thought, "what the hell was that?", turned, and went back to take another look. It is part of a large quilt of the usual liberal totems: "love your mother earth", "stop hate" (to which I say, as soon as the Yankees slide into the ocean), "no war with" (insert name of your favorite dictatorship), etc.

To be perfectly honest, I was dismayed that this wasn't at SCSU. It should be; we're suppose to be the epicenter of this kind of nonsense.

I went outside and a friend who'd also seen it suggested I go back and take a picture. He reads here, and I'm sure he wanted to see this, so you have him to thank for this lovely image.

From a new report on children's well-being in America, a graph on teen pregnancies by race. The convergence of black teen pregnancy to other levels should be of great importance. So what does the AP writer emphasize? Hispanic kids less likely to have health insurance. Way to go, muttonhead.

He was 85? I now feel a little older.

Good writers are good editors of their own work. Craig Westover has revised his original notes on Q-Comp into his "hobby column" in the Pioneer Press and it's much, much better. This point need amplification:

The "Professional Pay System" was negotiated outside the Education Working Group in closed-door session among Gov. Tim Pawlenty, Commissioner of Education Alice Seagren, Senate Education Policy Chairman Steve Kelley, D-Hopkins, and House Education Finance Chairwoman Barb Sykora, R-Excelsior.

Notable by his exclusion was House Education Policy and Reform Chairman Mark Buesgens, R-Jordan, one of the most reform-minded members of the working group, a frequent and effective counter to Kelly's protectiveness of system status quo, and co-author of the "meaningful school choice" legislation that was one of Pawlenty's big four proposals in return for the cigarette tax.

Neither Buesgens nor the co-sponsor of the school choice legislation, Sen. David Hann, R-Eden Prairie, had discussions with the governor about school choice legislation during the special session. Nor, they say, did the governor's staff return their phone calls. Meaningful school choice, it appears, was never a meaningful option. When push came to shove, it was children who were pushed aside to shove more compensation to adults for improving their resumés.

Compared to the (at least) two-year planning and implementation cycle before students receive any benefit from their newly "developed" teachers, meaningful school choice would have had an immediate impact on children and the state budget. According to the fiscal note prepared by the state, the Hann/Buesgens legislation would have cost the state an additional $2 million in 2006 and returned a net savings to the general fund of more than $8 million in 2007 (compared to the $78 million cost of the Alternative Pay System).

"Government can't fix the system. That's a silly concept," Buesgens said. "Markets and people make education decisions."

He's right. Merit pay is reward for performance set by whom one serves, not self-determined, vague criteria with no objective reality. Parental school choice — the ability to opt out of the system if dissatisfied — creates a very objective reality.

"We squandered a lot of money," Buesgens said. "And we didn't get any reform."

The failure of Pawlenty and Seagren to consult Hann and Buesgens, let alone include them in the working group, is simply inexcusable. These people represent the concerns of a fair number of people working on education policy. They are part of the base that helped elect Pawlenty. Did they not deserve at least a hearing and an explanation of why the Q-Comp went the direction it did? And here was a plan that could have saved the state money and reduced the need for the cigarette tax increase.

Buesgens understands incentives. In a comment on my post on this topic yesterday, Michael (whose blog, alas, has been shuttered -- a pity, that) thinks teachers who respond to financial incentives are per se bad teachers.

Teaching is a calling, not a job. Great teachers are born, not made and economic incentives don’t work for teachers. There is only one incentive that works on teachers. FREEDOM!

Freedom to explore and create is the only thing that will excite good teachers. It is the only thing that will turn children into students.

Soooo, if you want great teachers, offer them an economic incentive program and fire all the ones that accept it. Give all the ones who don’t 20 kids in a class and let them go to college in the summer for free to learn more about anything they want. Pay them a middle class wage and ask them occasionally what they are up to. That is how you will get the best teaching force. (Bold in original; italics added by kb)

I suppose you expect me to snark, but let's not. I am perfectly willing to believe, based on what I know about Michael and his teaching and what his students have written about him, that he would teach for love of teaching alone (as long as he can afford Perrier.) I don't doubt he loves his job, and I'll even venture to guess he's a very good teacher. And I'll stipulate to the notion that Michael will not be affected by a merit pay system because he's already busting his ass for his students, and that he has no more ass to bust. AND I'll stipulate that Michael travels in a circle of fellow teachers who do the same because they share the same interest in good teaching.

But he's still missing the point, which is this: How do you find more Michaels when you have more students? There is not an infinite supply of Michaels in the world; there are competing claims for their time and talent outside of teaching. We don't pay finance professors double what we pay history professors because the finance professors are any better; we pay them that way because there are more competing claims willing to pay more for a talented PhD in finance than for a the talented PhD in history.

Michael may not see this because he assumes everyone is like his circle of friends. And he may wish that others acted like that circle. But it cannot. The market operates on teachers whether or not Michael likes it. If he wants more talented people teaching around him, he should support economic incentives.

The speculation can end now: Dave Kleis has decided to join the mayoral race against incumbent John Ellenbecker.

Kleis, 41, said he made his decision today after getting lots of phone calls from people urging him to get in the race. Kleis said he plans to file at 4 p.m. today.

Kleis, a Republican, has been in the Senate since 1994 and he defeated Ellenbecker, a Democrat, in 1996 for re-election.

...says the son of parents who've made a living the last twenty years by speculating on other people's stuff at a yard sale and putting it antique malls in New England. All economic exchange is about getting goods from lower-valued uses to higher ones. Thos who interfere in the process do so at risk of reducing human happiness. Such a case is found in this review of a book about rubbish.

The classic case is the fridge mountain. Your old fridge used to be taken away by the supplier of the new one, refurbished and sent to Africa. This brought benefits to the consumer, the exporter and the Nigerian housewife, with no apparent harm to the environment.

But then we found out about CFCs and the hole in the ozone layer. In 1998 the EU announced that with effect from January 2002 old fridges could no longer be exported and would only be allowed to go to landfill after 'controlled substances' were removed. Brussels took three years to answer a query about whether it was just the cooling-motor or the insulation as well that had to be stripped out before disposal. Whitehall did not see fit to prepare local authorities for both contingencies, with the result that we were not ready when the ban came into force. England's green and pleasant land became dotted with piles of rusting white goods.

So instead of recycled refrigerators in Africa we have piles of garbage in the UK, still with CFCs.

(h/t: Arts and Letters Daily.)

Craig Westover and I have been conversing by email on the merits of the Q-Comp proposal that passed in special session. After reading the bill and Craig's analysis, I'm going to retract my support for Q-Comp. They gutted it at the last minute, which is why the ed borg has not roared.

That said, let me add a little economic reasoning here. We know that people respond to incentives and that applies to teachers as much as anyone else. Whether or not Q-Comp is a replacement or a supplement to lanes and steps, which Craig criticizes greatly, isn't very important to me: If the supplement is large enough, and if it is reward for the right kinds of behavior, it's fine by me to leave lanes and steps in place.

Nor should it be an issue whether the borg roars or not: Teachers need to buy into the fact that they are going to be rewarded for something that is objectively measured and something that their efforts can in fact control. That is important: The problem teachers have, from the ones I speak with, is that the accountability tests on which the performance is based measures something over which the teacher has little influence. I don't see that as being an unreasonable position to take; proponents of more accountability need to show the connection between teacher effort, teacher reward and student achievement. If it's just more achievement-->more reward, reward might simply go to teachers who luck into better students. (Twenty years of teaching college students has taught me that classes don't begin with the same level of students. My last two classes have had absolutely wonderful students; a class last fall in principles had a number of ill-prepared students. That line about making chicken salad applies here.)

This is not to deny that Craig's right and I'm wrong. Craig's right because of this analysis (quoting from the legislation and his commentary):

Struck from the original was all language that referred to “replacing” the step and lane salary schedule and years-of-service-based pay replaced with the following --

(3) reform the “steps and lanes” salary schedule, prevent any teacher’s compensation paid before implementing the pay system from being reduced as a result of participating in this system, and base at least 60 percent of any compensation increase on teacher performance using:

Okay, here’s where the rubber meets the road, or rather where the program spins out of control. Teacher performance can be measured using --

. . . school wide student achievement gains under [MCA’s] or locally selected standardized assessment outcomes, or both.

In other words, “teacher performance” means whatever a district or site in conjunction with the teacher’s union says it means. A list of six items follows that “clarifies” the latter with more obscurity. It is basically an outline for professional development at taxpayer expense, not pay for performance. Number (6) is especially interesting in a “merit pay” program” --

. . . encourage collaboration rather than competition among teachers.

The problem is, once again, the misunderstanding that labor competes with labor and firms or school districts compete with other firms or school districts. It is this part, and this alone, that convinces me Craig is right. A union is a cartel; it acts to restrain competition among laborers within a firm (and often those outside). A merit pay system by its very nature encourages competition among teachers.

A teachers' union which wanted to show its professionalism and its concern for students would allow competition among teachers. But for a union, that's an argument against interest. The answer, of course, is real school choice.

At Washington State University, university funds used to purchase tickets for students to attend a play and heckle it. FIRE reports that it was quite an exercise.

It then allowed the hecklers to repeatedly disrupt the musical through shouts and threats of violence. Washington State’s president later defended the hecklers’ behavior as a “responsible” exercise of free speech.

“Students have a right to leave a play, protest outside of the theater, and condemn a play in the newspaper. But they do not have the right to obstruct and censor other students’ protected expression,” remarked David French, president of the Foundation for Individual Rights in Education (FIRE), which has intervened on Lee’s behalf. “Washington State’s defense of this vigilante censorship will encourage students to unlawfully silence others whenever they feel offended.”

The president of the university, Lane Rawlins, argues that a provocative play like this one, Passion of the Musical by student playwright Chris Lee constitutes a public forum and therefore heckling was a free speech right.

Interestingly, the same office that bankrolled the hecklers at Passion of the Musical sponsored Washington State’s 2005 production of The Vagina Monologues. Washington State also played host in April to Tales of the Lost Formicans, in which a cast member simulated masturbating into the American flag. Washington State called that play “a whimsical look at the idiosyncrasies of human interaction” and promoted it via a university press release.

Sounds like a job for Testaclese.

Chris Lee says he is going for a South Park or Dave Chapelle kind of humor, and the show sounds pretty much like, well, a student trying to sound like SP or Chapelle. It's inelegant humor. But we're not defending the musical's qualities as much as criticizing the use of campus funds to disrupt a student's attempt to learn how to write plays. Erin O'Connor, noting the story, makes the right point.

There is a difference between choosing not to witness or endorse expression one finds personally offensive and choosing to try to prevent others from witnessing, endorsing, or expressing it. This distinction has, for the moment anyway, been lost at Washington State.

Not only is John Ellenbecker running for mayor (and maybe not U.S. Congress), but he may not be challenged by presumed opponent state Senator Dave Kleis. Dave Aeikens of the St. Cloud Times reports,

Kleis has been considering it, and he has until 5 p.m. to decide if he wants to challenge Ellenbecker in what would be a rematch of the 1996 Senate race between the 11-year Republican senator and the first-term DFL mayor.

"At this point, I have not decided," Kleis said. He just returned from a few days in Canada after completing a legislative session that went into overtime and ended Wednesday. Kleis' Senate terms expires in 2006. In his 2002 re-election campaign, Kleis said his current term would be his last because of a self-imposed 12-year term limit he promised when elected in 1994.

Kleis is a local entrepreneur, running a driving academy, and it's farily well-known that he'd like to get back to the private sector. The mayorship is supposed to be a part-time job, though Ellenbecker says it takes much more time than he realized. Part of that, in my view, is because Ellenbecker is quite activist as a mayor.

This could be a strategic move on Kleis' part: If Ellenbecker runs unopposed and then runs for the Sixth District Congressional seat, there could be a special election for mayor in which Kleis would be a heavy favorite if he wants the job. And he might yet run this time around. But, and this is pure speculation on my part, Dave Kleis reminds me of nobody as much as Warren Rudman, a deficit hawk and someone who became increasingly frustrated with government. I could imagine Dave running the Concord Coalition -- indeed, doesn't this look like a copy of that? He's not been as anti-tax as Phil Krinkie; he's much more an efficient-government type of Republican. More Bob Dole than Newt Gingrich. And it's possible he's just burned out and wants nothing more to do with government.

Still, somebody needs to run an opposition to Ellenbecker. There should be objection to his heavyhandedness, to the expansion of the public sector in St. Cloud, and, thinking strategically for the Republicans, someone to lay down markers if he runs for Congress next year. Someone to make John get on a stage and hopefully say something you can use in the 2006 campaign if he runs. And if you beat him, which anyone outside of Kleis would have a hard time doing, that could make the Republican primary in CD6 the real election in 2006. (Though First Ring now thinks it's possible that Tinklenberg has raised enough money to make the Republicans focus and other DFL hopefuls perhaps stand aside??)

I think The First Ring has misanalyzed the situation in Ukraine. He think the problem with Yulia Tymoshenko is simply antipathy with ethnic Russians. It's far more, far worse than that. First Ringer says:

Tymoshenko’s dedication to reform and democracy aren’t in question, but Ukraine’s hot version of Margaret Thatcher has isolated a number of eastern Ukrainian voters who are culturally Russian. With concerns of secession in the region preceding and following the second vote, a Tymoshenko presidency would have been a gallon of gas to the smoldering embers of the 2004 vote. Tymoshenko has made efforts to reach out to the east, even traveling there immediately following Yushchenko’s victory, but the wounds are simply too fresh.

I've written earlier this year that the Tymoshenko cabinet has not moved forward on economic reforms. Anders Aslund sounded the alarm this May. He notes that Tymoshenko has engaged in pure populism, increasing taxes and giving public sector workers and pensioners 60% raises. Inflation is on the rise. Ariel Cohen last week amplifies the point that property rights are routinely violated in Ukraine. It has a socialist privatization minister (take a moment to get your mind around that concept) who thinks we've had enough privatization. James Sherr argues persuasively that Tymoshenko is not a good friend of Yushchenko's and is not averse to arbitrary use of power.

Between his inauguration and the recent oil crisis, President Yushchenko tended to act more as the spiritual than the political leader of the country. He also made twelve trips abroad. When the oil crisis reached the point of peril, he intervened with wisdom and firmness, but it is not clear whether he will now exercise direct and active authority. His Prime Minister, Yulia Tymoshenko, an electoral ally but a personal rival, is not averse to confrontation and seems determined to exercise authority without limit. If Yushchenko has confused leadership with inspiration, she has confused it with control and, to the astonishment of many in Ukraine's business sector, these controls are taking the form of Soviet style 'administrative measures' which extend to the micro economy.

Sherr also makes a good point that these actors come from an authoritarian regime and are used to working within it, both having held positions in the previous government of Leonid Kuchma. "It represents a principled break from the past, but not a clean break."

One has to wonder, contrary to First Ringer, whether Yushchenko's health really is fine. His hands-off approach is certainly fitting the style I remember he had at the National Bank, but broad guidelines were often followed with concrete steps. And laissez-faire was not his style in running his government when he was prime minister. Given that the power of the presidency is to be reduced next year under the constitutional reforms agreed at the conclusion of the Orange Revolution, the time is now for Yushchenko to take charge. (Tammy Lynch offers the same sentiment; as noted by Robert Mayer.)

UPDATE: The economic slowdown is making one Orange Revolution promise harder to keep, according to a new report.

Ukraine's economy grew just 4 percent in the first six months of 2005, the government announced Thursday, a sharp downturn from the white-hot growth registered by the former government over the same period a year earlier.

The slowdown poses another hurdle for the new pro-Western government which took power after last year's Orange Revolution amid promises to boost living standards and create 5 million new jobs.

Yushchenko believes last year's nubers were doctored to improve the government's chances. I believe that's probably true, but it makes the 5 million new jobs even harder to make, if the old jobs number was fudged.

First Ringer has updated his post and says the results are consistent with consensus-building. I suppose this is true; the Orange Revolution needed the consensus to succeed. But it may take the next parliamentary elections in 2006 to solidify the gains and move forward. As to Yulia, unquestionably she is angling to succeed Viktor some day, but winning that parliamentary election appears to be the nearer-term goal.

That's the answer to the question "Why do people still have sex in libraries?", according to Thomas Benton.

I have heard that one of the rites of passage for undergraduates at Harvard University is to have sex in stacks of the vast, labyrinthine Widener Library. It's sort of an academic version of joining the "Mile-High Club."

I suppose sex in the stacks is meant to lampoon the library's aura of high-minded seriousness and Puritanical chastity. Harvard used to keep Leaves of Grass in a locked case in order to guard the moral virtue of undergraduates. And that was in the days before Harvard admitted women.

That copy of Leaves is now in the Houghton Library. The more erotic passages have been underscored and commented upon by James Russell Lowell, the very man who promised one concerned parent that he would "keep it out of the way of students."

...For the record, I have never had sex in the stacks, and -- even after many years of lurking in several major collections -- I have never had to discreetly avoid anyone else in flagrante delicto. But I have had many moments in stacks of great libraries that were almost erotic in their intellectual intensity.

I have had moments in reading a text -- an ordinary one that might now be found online -- when I noticed a minor reference in the margins that sent me a few shelves down to find a much more obscure book that was packed with unexpected clues that changed my project entirely.

The library at Claremont was like this for me: I would grab books on economics, which were in the basement of Seeley-Mudd library. In those days you could take them out into a courtyard in the basement unaccessible from the street. You could also smoke there (yes, Viriginia, I used to smoke cigarettes. Bicycling to work after moving off campus disabused me of the habit.) One day I'm reading a first edition of Paul Samuelson's Foundations of Economic Analysis, which was his dissertation. There are notes, the handwriting of which I recognize as one of my professor's. Now these didn't lead me to more obscure books like in Benton's story, but they did lead me to learn the story of this professor's interactions with Samuelson when they were classmates at Harvard. (To make a long story short, they competed for the affections of a female classmate; my prof won -- it is said this drove Samuelson to work harder on his dissertation.)

A roommate used to hang around the Sir Francis Bacon Library, which he took me to once where I met this woman who spent her entire life around these books that would have thrilled Bacon. It's now out at the Huntington Library in San Marino, one of those truly special places for historians and lovers of flora and fauna (for the gardens around them.)

I was thinking about something Saint Paul said during the book meme tour, that he didn't own many books and was rather fond of journals instead. I had two thoughts. I still adore those days when I can wander into a library and just browse the journals section. The internet makes this easier with services that tell you which articles everyone is downloading or new journals appearing, or whatever. But for some reason I like the tactile sensation of turning pages in a journal, and really looking at an abstract and the flow of an article. It's not duplicated by mouse clicks.

Do parents ever drop their kids at libraries any more, to work on homework for a few hours? I don't think we would with the LS, given its location and the fact that homeless will sleep in there. It seems a shame; the old Manchester public library is a memory with me for life. Benton concludes his piece,

I am grateful that my graduate alma mater had browsable stacks. That was the foundation of my education. The books were more important, by far, than the superstar scholars who, like books in an off-site warehouse, were available for consultation only with great difficulty. In the future, I will encourage more of my students to consider universities with open, centrally located library collections -- such as Chicago -- above other comparably prestigious institutions with different priorities.

I wrote this column on a computer in a room filled with books. In five years I will have a new computer on which most of my old software and storage media will not run. The books will still be here, and my children will be able to read them. And so will their children.

My son is named after a book title, just as the title is named after the author's son. (Given my heritage, you should be able to figure this out. This will drive Mitch nuts.) His gift for one important birthday was the book. I don't imagine Saint Paul will bequeath his Weekly Standards or Atlantics.

Unrelated to anything this blog normally discusses: I'm driving home from dinner out with my family, and I see some poor guy pulled over by a cop getting a ticket in the opposite lane. Two people, apparently out with their dog, have stopped to watch the proceedings. Isn't this considered rude? Can't a guy try to talk his way out of a ticket in private??

Inquiring minds want to know.

Can you have both at once? Yes, when dealing with bureaucracy. I won't bore you with the details, but it could have a happy ending. Off to get dinner, and I'll post some items afterwards.

Many years ago I had a friend, a political science professor with whom I would jog in the mornings, and Mrs. and I visited with them often. He is Jewish. One time while running he tells me the story of visiting a state university in the South. Now, my friend certainly looks Semitic -- think Dolph Schayes with a beard -- and his last name doesn't disguise anything. But still they are curious. Obviously you cannot ask straight out the question, so he tells me they hem and haw a little bit until someone gets a bright idea. "So, what do you do on Sunday mornings?" they ask. He says he reads, and, understanding that they want this information and not wanting it to get in the way of his interview, he tells them he's Jewish. "Oh? We have a Jew here in [name of town]. We'll introduce you to him." So sure enough, the next day they introduce him to "the town Jew."

I was laughing so hard I could not run any more. (He does a much better job telling this story and, like me, when he jogs and tells a story his hands are absolutely everywhere at once.) The punchline: They offered him the job. Unsurprisingly, he turned it down. I guess he didn't want to ruin the fame of the town Jew.

The same sort of thing happens to conservatives, though it's not quite so funny. FIRE's David French explains:

I spent two years as a lecturer at Cornell Law School. During my second interview with the director of the program I was applying to join, she asked the following question: “I note from your CV that you seem to be involved in religious right issues. Do you think you can teach gay students?” How many gay applicants at Cornell have been asked: “Do you think you can teach Christian students?” The question (coming from someone I came to deeply respect and admire) came not malice but from ignorance – both of the legal standards governing hiring and of the beliefs of evangelical Christians.

Nor was my experience with ignorance and prejudice limited to faculty hiring. One of the most disturbing aspects of my experience at Cornell Law School was the year I spent on the school’s admissions committee. I saw a Christian student once almost get rejected despite tremendous academic qualification because members of the committee were wary of his “God-squadding” and “Bible-thumping.” He was admitted only after I raised strong objections to the committee’s obvious anti-religious prejudice. I also saw some Latino and African-American candidates receive less affirmative action assistance because their perceived politics or career interests (such as an interest in finance) were deemed “less diverse” than other applicants with an obvious interest in “social justice.” Moreover, some applicants of color who indicated interest in the world of commerce were said not to have “taken ownership of their racial identity.”

I agree with French in this regard: Most of the reaction I get to being a right-libertarian on campus isn't malicious but ignorant. Not to say prejudice doesn't exist against conservative, but it's limited, particularly when one is open about his political views and able to defend them with both vigor and humor or grace. One of my best friends here at SCSU has said more than once he likes talking politics with me because he "gets a unique perspective." Well, why do you suppose that is?

Two side points, quickly. First, we should keep Dan Drezner's caveat about being untenured in mind when deciding to leave your conservative bona fides out for all to see. And second, sometimes one's openness leads to use as a "token conservative" on academic committees. I'm on a committee looking at academic freedom at SCSU right now. I've not felt in any way a token on that committee -- the people on there, who probably have voted against me in every election since 1976 if they were old enough, are very good people. But there's a nagging sense that whatever comes out of that committee, some will say "it must be ok if Banaian's on the committee," or "what are you complaining about? King says it's OK." This has happened before.

"Oh, you're a conservative? We have one of those. We'll have you meet him." People with a diveristy mindset, sometimes, just can't help themselves.

When I first heard of term limits and other measures that w