Friday, September 30, 2005

Ceteris paribus 

James Taranto thinks the reaction to Bill Bennett's comments on the relation of abortion and crime indicates maybe the end of political correctness. He does so by actually reading Steven Levitt, whose work was the impetus for Bennett's remarks. But Levitt points out that Bennett (and by extension, Taranto) have misread him.
It is true that, on average, crime involvement in the U.S. is higher among blacks than whites. Importantly, however, once you control for income, the likelihood of growing up in a female-headed household, having a teenage mother, and how urban the environment is, the importance of race disappears for all crimes except homicide. (The homicide gap is partly explained by crack markets). In other words, for most crimes a white person and a black person who grow up next door to each other with similar incomes and the same family structure would be predicted to have the same crime involvement. Empirically, what matters is the fact that abortions are disproportionately used on unwanted pregnancies, and disproportionately by teenage women and single women.
We are forever explaining to students of economics the value of the term ceteris paribus or "all other things being equal." Since we don't have test tubes or other treatments, we have to do it theoretically through a mental exercise or empirically using regression analysis. This is the kind of thing economists argue about frequently -- did you include all the right variables to be able to invoke ceteris paribus and claim the relationship? This type of problem, called specification bias, is explained by Peter Kennedy (who wrote one of the best books for teaching econometrics to undergraduates). See also these notes.

Levitt and Dubner, in Freakonomics, note that former Minneapolis police chief and gubernatorial candidate Anthony Bouza, who wrote a book including the argument that abortion was
"arguably the only effective crime-prevention device adopted in this nation since the late 1960s." When Bouza's opinion was publicized just before the election, he fell sharply in the polls. And then he lost.
If somehow NARN replaces Bennett in morning drive, nothing will have changed.

Thursday, September 29, 2005

I could have told you that was a bad idea 

The Elder decides to try beers of the FSU. Didn't like 'em.
All in all, I was not impressed. The Baltika was the best of the bunch, which is not saying much. Alcohol is a critical part of the taste of a good beer, but in these three beers, especially the Zhiguly, it was overwhelming. Considering the punch these beers pack, I suppose that's not surprising, although other beers with similar alcohol content do a much better job masking the flavor. When it came to taste, there's just not much else there with this trio.
Good beer ends at the Czech border by and large. (Gambrinus all over Pilsner Urquell, btw. Maybe Radegast too.) The problem is that most of the Slavic beers aren't meant to ship. The good stuff, like Coors of the old days, isn't pasteurized. I have very fond memories of Obolon from my Ukraine days, but damned if I can find a decent bottle here in the States. Particularly the dark beers like this porter. (Yes, that's in Cyrillic. That's part of my explanation.)

At least you can find them there. I worked in Egypt one summer, and that was as expected a wasteland. But it was at least better than Indonesia. Bintang -- eeyewww! And the imported Malaysian Tiger and Singa beer was no better. So during your Trinkensraum, Chad, give South Asia a wide berth.

BTW, the Obolon website notes this "Interesting fact":
Just like breakfast cereals, beer is a rich source of B vitamins which are an essential part of a healthy diet.
So that explains the guy who drank three of those on the Air Ukraine flight sitting next to me before we took off on the 6am flight to Budapest! I will be noting this interesting fact to Mrs. Scholar, who continues to feed me kasha (Russian for bird seed) for breakfast.

Intellectual Takeout 

I think Intellectual Takeout has improved the site now that it can be visited repeatedly. It provides a balanced resource for students doing research, as well as covering the same ground we do here at Scholars, looking for bias on campuses. See for example their coverage of an appearance by Chris Mooney at the U of M. Some on my campus have circulated praising reviews of Mooney's book, and IT led me to a review in the WaPo that was less so. (Guess what went out on our campus discussion list this afternoon?)

Welcome to the blogroll, Intellectual Takeout!

In the process of talking about this today I found in my mailbox a copy of Jeffrey Hart's pamphlet What is a College Education? Here's a shorter version from several years ago, and a like article in National Review. Reminds me I need to put this book on my wish list.

Confidence lagging 

Contemplating the same thing I did, Joshua Sharf says consumer confidence is a lagging, not a leading indicator.
What that says to me is that people's perceptions of the economy, and even of their own finances, are more a reflection of what they've been reading than of what they've been saving.

Applying this to our current situation, we shouldn't be surprised if personal spending doesn't rise much this month compared to last year, but we certainly shouldn't be projecting Christmas sales on the basis of this number.

Most of the evidence on the effect of bad weather says it's a two- to three-month shock, nothing more, when it comes to consumption. The more interesting part of the story is the supply-side effect. The whole intertemporal substitution hypothesis would be badly damaged if we did not see an increase in savings and work effort in the affected areas and in the country as a whole.

Gut feeling 

I'm not linking to things and I'm reading very little about Tom DeLay. All I'll say is that I saw him hurry onto Special Report last night, watched him, and and some instinctual level thought "he's been caught." I can't give you an analysis because the charges are so vague as to be unverifiable from what I know. And my sense was there from the very first answer. It was a Blink moment.

Some fight over logos, others over interior designers 

This is hilarious!
The use of pink paint in Iowa's visiting locker room is causing a bit of a commotion around Iowa City.

Soft pink hues were added to the visiting locker room at Iowa's Kinnick Stadium by former football coach Hayden Fry in the late 1970s. Fry believed the color had a calming effect on people.

As part of an $88 million remodeling job at the stadium, designers retained that color motif, splashing pink across the walls, carpet, showers, sinks, metal lockers and even the urinals.
Last week, an Iowa law school professor received death threats after criticizing the university for using pink paint. The professor, now joined by others across campus, says using pink demeans women and perpetuates negative stereotypes of women and homosexuality.Want to bet it's drunk tank pink?

Dear Fighting Sioux football team, 

Here's some bulletin board material for your game Saturday.
The NCAA News -- January 21, 2002
St. Cloud State CEO calls for increased attention to mascot issue
Roy H. Saigo, president of St. Cloud State University, asked Division II presidents to consider the issue of American Indian mascots and whether those mascots are appropriate in light of antidiscrimination policies, both at the university level and within the NCAA.

Saigo made his remarks at the Division II chief executive officers luncheon January 13.

"This is an issue we haven't talked about as presidents, and yet it's an issue that has caused a lot of consternation in our part of the world," Saigo said. "I bring it up not to attack anybody but simply to broaden the discussion."

Saigo made his remarks during an open forum portion of the program.

"I believe it is a racial issue," he said. "I believe it is a civil rights issue. I believe it is a religious issue, and people are getting hurt."

Saigo's institution, St. Cloud State, is in the same conference as the University of North Dakota, whose mascot is the "Fighting Sioux." Saigo's institution also has a notable American Indian population, and the issue has become divisive, particularly when North Dakota's teams come to play St. Cloud State.
Today's newspapers note that the NCAA rejected UND's appeal of the subsequent ban on Native American team nicknames. UND President Charles Kupchella will appeal.
Obviously, we do not agree with the decision, and we will continue to press our case through all of the levels of review and beyond as necessary. Because of the harshness of the words �hostile� and �abusive� we have no choice but to pursue an appeal and prove, in a court of law if necessary, that this choice of words was inappropriate, and in no way describes what we do here at the University of North Dakota.

While the appeal is being drawn up, the 4-0 Fighting Sioux host the 5-0 SCSU Huskies, where President Saigo still is in charge. It's homecoming weekend for North Dakota.

Gentlemen of the UND football team, good luck.

Hope falls eternal: The return of yellow bikes 

Yellow bikes and yellow leaves will grace our campus again this fall.

Despite a 2004 trial run at St. Cloud State University that didn't produce great results, the yellow bike program is back this year.

Out of about 20 donated bikes intended for students to use for free to commute locally and on campus, only four survived the last academic year. And those were in rough shape at year's end.

The program takes its name from the bright color the donated bikes are painted before being randomly parked around campus for students to use.

Failure of the program can be credited to students' lack of respect for the bikes and disregard for the program's potential benefits, said Grant Schnell, student manager at St. Cloud State's Outdoor Endeavors office.

..."It didn't work out very well. Basically they all just got ruined," Schnell said. "In one instance we found a rim wrapped around the entire front fork of a bike." Other bikes disappeared, he said.

It might come as a surprise that along with a new crop of about 15 more bikes, the program is back for another round this year.

No, it doesn't come as a surprise. Nothing, not even reality, deters the innocent greenie from belief that incentives don't matter.

Only one condition is crucial to the success of the yellow bike program: When finished using a bike, the rider must return it in good shape to a bike rack on campus so someone else can use it.

Incentives, children, incentives. We told you last year to take my economics class. You obviosuly were too busy repairing bikes nobody cared about.

Wednesday, September 28, 2005

FootFlash Football Festival, Week 3 

The current score is Learned Foot 6-0 5-1, Anoka Flash 3-3 1-5, by dint of a three-game swing last week. We only pick three games, so you can see that the Flash had a bad week. But if they keep picking opposite each other, a three-game swing means nothing. Just ask the White Sox. Anyway, off to this week's games.

  1. San Diego at New England (-5). This is deja vu all over again. We had a weird 5.5 line last week with the Bolts, but they were favored in that one and blew out the Giants with LaDainian Tomlinson throwing and running all over the Giant defense. The Pats defense is a patchwork affair, but that defense did enough to stymie the Steelers on the road. If Rodney Harrison and Teddy Bruschi and the rest of the defense was healthy, would this line be 7? 8? Let's put this to our prognosticators.
  2. Green Bay at Carolina (-7.5). So how bad are the Packers really? Not so bad that this line moved towards them after opening at 8. This is deja vu too, as the Packers went to AllTel last year as 3.5 dogs and beat the Panthers 24-14. But the Panthers lost a tough game to the Dolphins on turnovers and, at 1-2, need this game to start contending in a tough division with the Falcons and Bucs. The Packers are 0-3 ATS, but have won 5 of their last 6 ATS against Carolina. Which way does this one turn out this time, guys?
  3. Indianapolis (-7) at Tennessee. These teams play so often that every down is deja vu -- Indy is 4-0 ATS over the last three years against the Titans. Indy looks great with an improved defense and a running game that has worn people down, but they have had two big numbers and not covered the chalk against the Jags and the Browns. The Titans, though losing last week, have covered the last two weeks and look like they might have righted the ship in a year where they are supposed to be rebuilding. Do the Colts continue to look like the cream of the AFC, or is this the start of their slide to 11-5 and a trip to New England in January?
UPDATE: Had their records wrong with a total brain cramp.

Protesting for credit again 

Looks like the Change Agent class down in the Department of the 3.7 GPA has had a field trip.

Two St. Cloud State University professors and about two dozen other people gathered outside U.S. Rep. Mark Kennedy's St. Cloud office Tuesday and urged him
to vote against opening the Arctic National Wildlife Refuge to oil drilling.

The U.S. Public Interest Research Group, an environmental advocacy group, sponsored the demonstration. It was intended to pressure Kennedy to vote against the 2006 federal budget if it includes drilling in the 1.5 million acre Alaskan refuge.

Environmental groups have focused their lobbying efforts on Kennedy and a handful of other House Republicans who haven't said how they will vote.

The 6th District Republican, who is a candidate for the U.S. Senate in 2006, won't decide how to vote until he's seen the final bill, spokeswoman Anne Mason said.

He has opposed drilling in the refuge in the past and is working to keep it out of the budget, she said.

Of course, they might have looked up Kennedy's record. Or his press statement. But research doesn't appear to be their strong suit down in the D3.7GPA.

Graduate student Laddi Makene said the United States doesn't need oil from the refuge and should instead focus on alternative, sustainable forms of energy.

"You're going to destroy the environment. You're going to displace the people. You're going to pollute the area," Makene said. "It's only a three-month supply of oil, so you destroy the entire ecosystem for a three-month supply of oil."

That's quite impossible. There's at minimum 5.7 billion barrels of oil recoverable at a price of about $24/bbl, and as prices rise efforts would increase to recover more. We consume about 23 million barrels per day, of which about we import maybe 9. Is the student assuming we supplied the whole world out of one field in Alaska? I can't see how this number is determined.

And are these students getting credit for this activity?

Campus goings-on 

Two rather humorous announcements this afternoon on our campus.

Campus community, A new business, Fair Trade Caf�, will be operating the Miller Center coffee shop beginning in October.

Friday, Sept. 30 will be the last day Meeting Grounds will be operating the coffee shop.

Campus community, I will not be taking coffee from the Fair Trade Cafe. I'm sure this is mostly about the Meeting Grounds -- a local coffee roaster and shop well known to locals -- not getting the new contract to run the space. And that's what's bothering me. Isn't "fair trade" about providing good prices to local suppliers? You know, the "thing globally, act locally" thing? The new vendor is also local, but somehow implying the previous vendor isn't fair isn't right at all.

And the whole fair trade coffee debate is pretty bogus. But bogus economic education is what this place is all about.

Second, a one-sentence missive:
The Atwood Center Council voted today to terminate the smoking facility in the Apocalypse Room as of 8 pm (building closing) on Wednesday, November 23rd,
There was something so poetic about a smoking lounge called the Apocalypse Room. It is in the basement and has no windows; it is closest to the dining facility in the student union building. What the hell else will they do with the place?

I know! Milliways! (UPDATE: Link fixed, Tim.)

How much confidence in consumer confidence? 

In conjunction with the Quarterly Business Report release I've been fielding some radio interviews over the last couple of days. The report is written with about a four lag to publication, so this time we had to have copy to the publisher about three days before Katrina. My answer has been something along the lines of "higher gas prices and Katrina have to have some impact on retail sales, but we won't know how much until we see some data on consumer confidence."

Today, we got the first look at the data, and it ain't that pretty at all, as Warren Zevon might have said.
�Hurricane Katrina, coupled with soaring gasoline prices and a less optimistic job outlook, has pushed consumer confidence to its lowest level in nearly two years (81.7 in October 2003) and created a degree of uncertainty and concern about the short-term future,� says Lynn Franco, Director of The Conference Board Consumer Research Center. �Historically, shocks have had a short-term impact on consumer confidence, especially on consumers� expectations. Fuel prices remain high, though they have retreated in recent days, and when combined with a weaker job market outlook, will likely curb both confidence and spending for the short-run. As rebuilding efforts take hold and job growth gains momentum, consumers� confidence should rebound and return to more positive levels by year-end or early 2006.�
And yes, there's some turnaound already showing up in retail chain-store sales, but it's barely perceptible. And some observers are getting nervous.
"We may now see a pullback in spending,'' said Quincy Krosby, who helps oversee $293 billion in assets as chief investment strategist for The Hartford in Hartford, Connecticut. "This winter and this Christmas shopping season are going to be the test case, and we're going to see if this is the tipping point for the consumer.''
Is this justified? Call me cautious. If you want to be optimistic, you would look to the research that suggests consumer confidence tells us rather little. If you gauge on nothing else, yes, consumer confidence can help explain consumption, which is the key right now to continued economic growth. But we already have forecasts that suggest a quarter-point downshift in consumption. This is forecast to be offset by a decline in the trade deficit, as one thing consumers will cut back on in the scenario will be imported goods.

If you want to be pessimistic, you could point to a speech by the Chicago Fed president Michael Moskow, where he argues that we could see a 0.3-0.5% decline in GDP growth in the second half of 2005, arguing that it's an order of magnitude larger than Hurricane Andrew (which nobody thought took more than 0.1% from GDP growth.) And you could base it on conversations I'm having with people around town that suggest people aren't going to restaurants as much as they did a year ago and otherwise reducing discretionary spending ... but this was happening even before Katrina. The reason you hear is simply this graph.
Which camp am I in? I'd characterize myself as someone with a foot in each. I think the pessimists have the day in the short-run, and I agree with Chicago Fed President Moskow. And the story that we've seen the bottom of the slide in the trade deficit has some 'splainin still to do. But in the long run we should get more work, more savings and investment.

Short note on 6th CD race 

After the Race to the Right appearance I'm asked whether I picked a horse in the Sixth Congressional District race. The answer is no. And I'm not a delegate to the party convention. Therefore, it's not yet time for me to choose. After the endorsement, if there is a primary, then I'll make a choice, and I may let you know here (or not, if I decide not to.) And besides, I'm still learning about the candidates, as I only have had experience with one of the four remaining candidates (Knoblach, who it's fair to say I liked on the show more than the other hosts and guests.) I'm only making a choice between candidates I actually will vote between (or among, possibly).

Tuesday, September 27, 2005

Ooooh, podcast 

Here's a podcast of two guys I often link to here: MOBster Phil Miller of Market Power and John Palmer of The Eclectic Econoclast. I will drop it on my USB drive before I go home and listen to it tonight and update with reactions.

I am contemplating creating short principles lessons via podcast like these posts I did last summer. Are readers interested? Let me know in comments, please.

Wilf he or wilfn't he? 

I was asked on two of the shows over the weekend about the Vikings proposal. I was working mostly off past knowledge, in part this report from the stadium screening committee. Zygi Wilf didn't find the Anoka site -- this proposal has been around for quite some time.

I've pointed out two things that have changed. The first is that the original deal had the Vikings putting up 70% of the cost of the deal, a number the Vikings in principle didn't flinch at when Red owned the team. This would have at a minimum been $330 million of the low-end cost of $475 million. The proposal unveiled last week has the owner's number reduced to $280 million, and the cost ratcheted up to $780 million, including the retractable roof (which added about $115 million to the price, and for which Wilf says he will not pay.)

Second, the whole argument about economic benefits in the original proposal -- that it would generate $1.1 billion in private investment -- seems pretty far-fetched, and even more so now that some of Wilf's money is off the table. The assumption that a dollar of public investment could leverage $3.50 in private investment struck me as a reach in any case. The multipliers we're talking about normally are more likely less than $2 to $1, and perhaps much less. And there's no reason to believe the investment would not come without the Vikings. Remember that part of the deal is to speed up infrastructure investment, mostly through widening roads. So those roads would have been widened, and the private investment would have flowed, with or without the Vikings. What changes is the nature of the investment: What different types of businesses will be built around the area with and without a stadium, and why are those with a stadium better types of investments? There is little different between investing in stadium construction and other types of industrial policy -- government uses public monies to pick winning and losing types of firms. Its history in picking winners and losers is, well, not much better than Flash's history picking NFL games.

John Laplante observes that putting this deal out there with the Twins and University of Minnesota proposals makes all three deals unlikely to survive legislative scrutiny. I think the answer is more nuanced: If Wilf and Anoka County officials can figure out how not to ask the state for $115 million (for example, by scratching the retractable roof), all they need is to be rolled into the Hennepin proposal to have the law requiring a county vote on the stadium proposal waived. That proposal would then gather a little steam; I would make the vote for that deal in a special session still less than 50-50 in favor, but it would have a real shot.

Last note on this: Mark Yost on Next Big Thing has asked me a few times on the question of whether the "psychic income" argument -- "you love those sports teams, and you'd be depressed to live in a city without them" -- carries any water. There's an article from three economists who did a study of the psychic income generated by the Pittsburgh Penguins. Most people feel pride about having a sports team in their town, but they also feel pride over a zoo or a museum, and those things don't cost nearly as much as a stadium. And those who feel civic pride for sports happen to be those who go to games; those who feel civic pride from museums and theaters are art lovers, etc.
Overall, we find that the civic pride benefit of a sports team is primarily found in citizens who attend games and who feel that sports generate civic pride for the community. This conclusion suggests that the public choice theory is not necessarily a minority exercising their will on the majority, but a minority that believes that their public good is everyone's public good.
That last sentence accords to my feeling when I hear people tell me how Minnesota needs the Twins or the Vikings. "Those buggers are going to tax me anyway, they should spend it on things that I like, which are sports." Down that road lies the welfare state.

UPDATE: Phil Miller notes that Zygi is trying to logroll the three stadium proposals, but Phil thinks this will not work.

What should university presidents do? 

Opinion Journal carries a reprint of Victor Davis Hanson's discussion of The Claremont Review of Books article on the decline of the university presidency. The whole thing needs reading, but the conclusion bears your serious consideration:
More importantly, we have lost sight of what university presidents are supposed to be. Their first allegiance ought to be to honesty and truth, not campus orthodoxy masquerading as intellectual bravery amid a supposedly reactionary society. In a world of intellectual integrity, Robert Birgeneau would ask, 'Why are Asians excelling, and what can Berkeley do to encourage emulation of their success by other ethnic groups?' Denice Denton might wonder whether open hiring, monitored by affirmative action officers, applies to university staff or only those who are not associates of the President. President Hoffman would decry Ward Churchill's crass behavior and order a complete review of affirmative action and the politicized nature of hiring, retention, and tenure practices at Colorado. And Larry Summers? In the old world of the campus, he would defend free inquiry and expression, and remind faculty that all questions are up for discussion at Harvard. And if self-appointed censors wished to fire him for that, then he would dare them to go ahead and try.
I've inserted links to the university presidents mentioned here, all of whom lack the courage and vision VDH wants. But name me those who have had it?

Benjamin Rogge once noted that George Stigler said, "The typical college catalogue would never stop Diogenes in his search for an honest man."

Monday, September 26, 2005

Ubiquitous me 

So the weekend consisted of NARN, Race to the Right, Next Big Thing (hope Speed Gibson got to listen and rate) -- all of which were great fun, especially finding out it was just Mitch and me for week in review in a week where I had little to review -- and also the latest Quarterly Business Report, in which we gave a mostly thumbs-up on the local economy. The bigger radio station in St. Cloud called for an interview this morning.

I see how Howard Stern could like this king of all media thing.

And, btw, for being the only guy in the room without his own radio show, Andy held his own very well. He has the right combination of knowledge and edginess, as do Marty and Tony. But damn, Mitch is scary to work with when he isn't quarterbacking as he does with NARN. Note to self: offer to get Mitch out of the QB chair a little more often. He's even funnier when he's not worried about the breaks.

Oh, and to the Slavic-language trained tongue, ah-plik-OFF-ski isn't that hard. (He uses the Americanized OW as the third syllable.)

It's good to be the king 

I've been able to get first-class tickets paid for by others to travel to places like Jakarta or Yerevan, and I can tell you they never cost me this much.
Until the new report, no detailed accounting had been done of the [American University President Ben] Ladners' spending, even as bills came in for first-class tickets for overseas trips, a waterfall for the back yard of the president's house and chauffeurs spending much of their time running errands for his wife to jewelers, salons and dry cleaners.

"It galls me to learn that Ben incurred a travel expense for himself alone to Nigeria of $22,345," trustee Paul M. Wolff, a senior partner in the Williams & Connolly law firm in Washington, wrote in a letter sent to board members Tuesday. "Had he bought a business elite ticket, the savings would have covered a student's tuition for one semester." Tuition this year is close to $28,000.
University Diaries has wall-to-wall coverage of this debacle, with inside details. Go and scroll; there are too many to enumerate.

Saturday, September 24, 2005

Media advisory 

I'll be on Race to the Right on KNSI with Martin Andrade tomorrow. 1-3pm at 1450 KNSI; at last local folks can hear me without a webstream. Not local? Marty's got streaming action. BTW, Marty, it's Banaian. Every other letter is an 'A'. Just ask Foot: He always spells my name so well.

I'm also supposed to appear on The Next Big Thing, which will feature The Right Brothers of the Pioneer Press, Craig Westover and Mark Yost. They'll do stadium talk. I'm working up a longer post on this for next week and contacting some other stadium types (like Phil Miller) to engage in a blog conversation about the Vikings and Twins proposals. Watch this space.

Friday, September 23, 2005

What are the chances... 

...that Foot and Flash make opposite picks on six games in a row? But they have. Follow the colors:

New England at Pittsburgh (-3)
NY Giants at San Diego (-5.5) -- worth noting the line moved to six many places.
Cincinnati (-3) at Chicago -- both teams are 2-0 ATS

LF says if he was going to pick three games to steer clear of, these would be the three. I agree -- that's why I picked them! My preference this week is to a) take the under of Jets/Jags (33.5) and b) fear the trap game! Pats look like a trap to me; so too the Vikes this weekend. Teasing those two teams at seven points (so you get Pats +10 and Vikes +3.5) at four-to-get-three might be the best play this weekend.

UPDATE (9/26): Foot buries the Flash this week, 3-0. My teaser worked out very well; indeed, a parlay there would have cashed too. Just missed on Jets/Jags.

Actually, it's old-fashioned oligopoly theory 

David Downing continues to work some economics into DowningWorld. Today he looks at Ed Lotterman's explanation of oligopoly theory as it regards the airline industry and the stadium issue. I pose the questions a little differently than David (and Ed, for that matter), though I think we end up in the same place.

Regarding Northwest, we know the industry consists of a few large players. It's worth remembering that not very long ago airlines were considered the prime example of a contestable market -- a market where the mere threat of competition would force firms that have otherwise natural monopolies to control their prices. Northwest operates a route between St. Cloud and MSP on which they currently charge $35 each way when the hop is appended to a NWA ticket from MSP onward. There are six flights a day. This is a great deal -- given parking is free at the local airport, I seldom drive to MSP. What makes it so? There is an agreement between NWA and the local transportation authority, but why does NWA agree to it? Simply because there is the possibility of another airline that would fly St. Cloud to Chicago. While that link is to a recent letter, the possibility has existed for quite some time, particularly since the runway was lengthened.

Now consider: NWA has a number of legacy costs from pension plans agreed at an earlier time when the ability to compete was lower. The ability compete requires largely three things: planes, gates, and employees. Given that travel has diminished after 9/11 and that financing plane leases is easier, it is easier to get planes and gates. Competition is fiercer. And the potential competitors have none of the pension costs involved. So the airlines figures it has to declare bankruptcy and move out from under those costs to meet the contestants for their markets.

The union is not necessarily engaged in a prisoner's dilemma with NWA, however. It represents other mechanics at other airlines, and it may invest in its reputation by staging a strike to deter lowball wage offers from other airlines. It may also want NWA to cut back its routes, allow competitors into the market, then negotiate better deals with them. It may well have known that taking NWA into a strike would mean bankruptcy, but that isn't necessarily an act of someone "aghast" or "insulted". It may be a rational calculation. There was no assurance that, had they settled, NWA wouldn't have declared bankruptcy anyway. The pension costs were still there to be shifted.

I'll save the stadium issue David addresses for another time, perhaps tomorrow on NARN, or in another radio appearance on Sunday. But it isn't a prisoner's dilemma with the Gophers (who can't go), and it actually isn't with the Twins (who have no place to credibly threaten to go) or the Vikings (unless someone convinces the other NFL owners that the Vikings should follow the Lakers to LA, at the cost of millions of expansion revenue. Bloody unlikely.)

Perilous groupthink 

KC Johnson reads an email from a CUNY administrator for a Vanity Fair student essay contest, and finds insertions that reveal much about academic groupthink. Here's the paragraph the administrator wrote, with italics the parts inserted, probably, to help students prepare to write.
What's on the minds of America's youth today? More than 30 years ago, young people across the country staged sit-ins for civil rights, got up and protested against a misguided, undeclared war, and actually gave a damn if a president lied to them. Although a lot has changed since then, there are still racial divides, and America is once again mired in a largely controversial war. Back in the 1960s and 70s, a similar climate motivated great numbers of young people to act, organize, and take to the streets in defiance. Today it seems as if younger Americans are content to watch their MTV, fiddle with their game players, follow the love lives of Brad, Jen, Jessica, and Paris, and assume the hard work is being done for them by others. What has changed? Is it simply that we do not have motivating factors such as a draft or Kent State to bring us together, to anger us? What is going on inside the minds of American youth today? In 1,500 words or fewer, explain what is on the minds of America's youth.

Thursday, September 22, 2005

Prices factor in everything 

I haven't gotten to this in my class yet, but I will. The Eclectic Econoclast reviews the cost-benefit analysis of hybrids.
Even if the cost of gasoline goes to $5 a gallon, the 122 gallon difference would save you $610 and it would still take almost four years ($2,390 divided by $610 is 3.9 years) to recoup the extra cost of the hybrid.
Meanwhile, if you're in an SUV and contemplating dumping it for one of those hybrids or other gas sippers, guess what? So is everyone else, and it's driving down the trade-in value.

We are all speculators. Some of those who bought SUVs speculated that the price of gasoline would stay (in real terms) close to where they were when the vehicle was bought. When the bet goes south, there's no free lunch that allows you to get out of the SUV, into a smaller car and avoid the cost of your action. That money is gone.

Either pay more or substitute for driving the guzzler. Them's your choices.

It's only a market as long as they let it be 

The Eclectic Econoclast notes that there is a market in Saudi Arabia for old coins to operate payphones, as it is hard to get a phone in the country and the payphones use a coin no longer in general circulation. My readers who remember post-Soviet Ukraine will smile wrily at this story. There were payphones, which used old 1- and 2-kopeck coins. Since a kopeck was worth a very small fraction of a penny by 1993, they had no other use. Babushkas would stand near phones and sell you the coins for perhaps 1000 times their face value (still likely to be $.02 or less). In its infinite wisdom, the Ukrainian telephone company made all the pay phones free to use, killing off the kopeck coin market.

John wonders whether there are pre-paid cell phones in Saudi. They are all over Ukraine.

Days I wish I understood GIS better 

While in Portsmouth (my parents, who I visited for Mom's birthday last weekend, live nearby in southern Maine) we stopped at a grocery store. The folks like bananas in their morning cereal, so we went to buy some at a Super WalMart. They were 64 cents a pound. "Oh!" Mom said. "We're not going to pay that!" After prices had stayed steady through summer, banana prices appear to have gone up a good bit, because it turns out many of our bananas come through Gulfport, MS, which is still more than a week away from reopening after Katrina.

So that got me thinking about shipping and I found an article from the University of Delaware, complete with a pretty cool map showing shipping lanes. It is interesting that they say "the bright red line to the Port of Houston represents primarily oil imports to the region." And more will go there diverted from the damaged ports. So if Rita is indeed heading towards Houston, it may have a fairly big impact on gas prices. Up more than $.14 at one time today, they closed up 7.7 cents to $2.13 (they were around $1.89 late last week.)

Look at it this way: There are four refineries still down from Katrina; there are 21 in the path of Rita. (Source.) If it's that big a hit and the storm is moving towards Houston, why have gas prices not moved more?? Maybe I need to look at these maps more.

Nostalgic for typing class 

I was walking around Portsmouth NH recently when I walked by a shop that had both cellphones and typewriters. "That's an interesting cross-marketing idea," I thought. It turns out typewriters are back in vogue with your usual bohemians. My grandfather had an Underwood No. 5 which he had gotten after college working for Foster's Daily Democrat in Dover NH. I typed most of my high school and college term papers on it. I have wondered if there was a market for a software program so that when I type on my keyboard I get the clackity sound from an Underwood. I had a Smith Corona in college myself, and a Selectric in grad school, but nothing ever felt like that Underwood.

h/t: Craig Newmark.

Wednesday, September 21, 2005

I know I've talked about this before... 

...but Financial Rounds does us the service of reinforcing the notion that you need to reduce what you teach in principles. He's talking about teaching principles of finance.
At my alma mater, they taught the same class in a way that totally spoiled me for the purpose of working at most other schools. In a rare (for academia) fit of common sense, they realized that you can teach a lot of topics poorly, or a few topics very well. So, they limited the introductory course to a few critical concepts (like time value of money, how to read financial statements, how to value a security, etc...), but completely beat these topics to death.

Economics professors know this, and have been talking about it for years. Yet text books continue to grow. A paper I wish we would do some day: What is the change in the length of a principles of economics text from first to second edition, second to third, etc.? I have yet to meet a book publisher representative who said to me that the "third edition of Smith and Jones' econ text has removed 15% of its pages to focus on just what matters." What happens instead is someone writes a new book that is shorter; some faculty adopt it; the feedback comes that sales grow if you add more stuff; next edition is 10% larger; rinse and repeat.

Don't blame the authors or the publishers: They are responding to market demand. Our demand, the same professors who keep publishing papers and pontificating on blogs saying we need to just focus on a few principles.

Cognitive dissonance? Maybe. So I don't know if even the author of Financial Rounds believes what he writes. But he's right nevertheless. Besides, anybody who uses Five Minute University in context needs to be linked, often.

FMI, read this conversation between Russell Roberts and Bill Polley before WSJ expires the link.

More dispositions 

FIRE is pursuing another case of a school of education using "dispositions" theory as a loyalty oath for its students. A student invited to "write what you really feel" without feeling uncomfortable revealed that he is a "conservative Christian" who believes �white privilege and male privilege do not exist,� and professed support for Second Amendment rights. He was evaluated to fail some dispositions and required to sign an agreement to remediation before he could join a practicum for his teaching degree. As David French notes on the Torch today, "ideology cannot function as a proxy for actual merit. ...It is not proper for a state university to condition its degrees on acceptance of the state-approved ideology." Washington State has since dropped the imposed agreement with the student.

FootFlash Football Festival, Week 2 

In their first week, Learned Foot and Anoka Flash battled over three games, with Foot coming out the victor in two and Flash the other. We learned Tampa Bay is a better team than people gave them credit for. Given they are travelling to Green Bay this week and that the two combatants wish not to pick too many Packer or Viking games, we'll leave the Buccaneers for a week or two. Nevertheless, the board this week has some interesting games. Here are the three I choose. This week's theme: testing sophomore quarterbacks.
  1. New England @ Pittsburgh (-3). The Pats looked vulnerable last week against a tricky blitzing Panther defense, and Pittsburgh has both a good front seven and a new, slashing running back in Willie Parker. But Belichick is the only genius not recognized by a MacArthur grant, and you figure this has to be the game he gets New England's Patriot faithful down from the ledge. The game figures to be put in the hands of Ben Rothliesberger, because that's the guy Belichick will want to force into mistakes.
  2. NY Giants @ San Diego (-5.5). Numbers like 5.5 are weird in pro lines, and this is a weird game. The 2-0 Giants finally go on the road after their "road" game Monday night at Meadowlands against the Saints, where Eli Manning looked good. He faces an 0-2 team that made the playoffs last year after passing on him for rejuvenated Drew Brees. The Chargers are desparate for a win, but can't generate enough excitement to merit a line of six.
  3. Cincinnati (-3) @ Chicago. The most interesting games this week are the interconference ones. Here we have Carson Palmer seeming to have made a step forward, and he faces a team with a quarterback that, before an injury his senior year, was considered to be on the same level. The Bears will be considered for real if they win this game; a Bengal win means Pittsburgh has some serious competition.

Once the money's spent, what's to worry? 

I'm travelling more lately, and one of the advantages of this is getting time to read things I can't seem to get to read when I'm home or at the office. On a plane to New England last weekend I read the latest copy of the Minneapolis Fed's publication The Region, which is one of my favorite Fed publications (I read many.) This month's issue features an interview with Robert Barro, and the first item discussed is Ricardian equivalence. Barro argues that people confuse the argument for the equivalence of taxing and incurring debt with an argument that the size of government doesn't matter.

...a central part of the proposition is that the amount of public expenditure�today and tomorrow�is being held constant. It's never part of Ricardian equivalence that the level of government expenditure doesn't matter. As [University of Chicago economist] Milton Friedman put it, the costs or benefits of government outlays depend on the amount and nature of what the government spends�there is no free lunch about paying for that spending. So whether you pay for it now or later is secondary.

As a first-order proposition, it is right that it matters little whether you pay for government spending with taxes today or taxes tomorrow, which is basically what a fiscal deficit is. The difference between taxes today and taxes tomorrow is analogous to the difference between paying for spending with an income tax or a sales tax. The method of public finance is an important question, but it is less important than the question of how big the government is and what activities it should carry out. Taxing now versus taxing later is an issue about optimal taxation, that is, a public-finance topic.

So what does this say about the spending arguments arising from the cleanup of Hurricane Katrina? The story -- I seem to recall this being in some form as an exam question for Barro's macro text, but I can't find my copy of the book right now -- is to imagine how people would react to having the barn on their farm blown up. They would want to replace it and begin to save immediately. They would also most likely work harder as they attempted to generate the capital they need for replacement. Now suppose the bank comes and offers a loan to rebuild the barn. Does this change the farmer's behavior? It really shouldn't. The decision of when to work and when to save depends on the productivity of the farmer with and without the barn -- the wage you can receive, the interest rate at which you can save up. You borrow so that you can smooth out your consumption of goods, just as students and their parents borrow for college. That's the public-finance question Barro refers to (in older times, economists referred to this as Ramsey taxation.)

So too with Katrina. The behavior of the economy, expressed in terms of prices, wages and interest rates, is changed at the moment the of the hurricane and flood, not by the decision to shift the financing from the private sector to the public, or from local government to federal. Now, Ricardian equivalence does have some gaps, as even Barro recognizes, but he says these are second-order effects.

Discussion of deficits and needing to raise taxes to pay for them, in this view, is rubbish. The discussion needs to focus on how much government spends, not how it pays for its spending.

Tuesday, September 20, 2005

The mercy A- 

Remember when we mentioned Princeton's experiment in setting a quota for A's? Well, the first year results are in, and the percentage of A's awarded are down five percent. As you'd expect, the economists were exemplary.
In Economics, for example, the department agreed on specific target percentages for A grades, depending on the type, category, and level of course. At the beginning of each semester, the chair reminded the faculty of the departmental agreement, adding that "any instructor who feels that there is a special reason to exceed the ordinary maximum may do so, but his or her grade sheet must be accompanied by a memo addressed to the chair explaining the circumstances."

In English, to take another example, the approach was to use the new grading expectations to enhance rather than abridge the ability of the faculty to employ their own expertise and experience to make informed grading decisions. The chair suggested to the faculty "that we view the policy as a tool to help us call grades as we see them and to resist the impulse to award high and higher grades for work we know is undeserving.
In an article in The Chronicle of Higher Ed (subscribers only), we get this from the English department.
Diana Fuss, acting chair of the English department, believes that professors have become more judicious with A's because of the policy. "The mercy A- has disappeared," Ms. Fuss said.
The mercy A-???

Do the math, people 

Let's suppose a certain team builds a stadium for $675 million. Stadia have a useful life of what, twenty years? The team plays eight home games and two really crappy pre-season games (for which you pay full price) per year in the stadium. At the end of 20 years or 200 games, the stadium's value is zero, except as a nice 30-second demonstration of the power of dynamite at the end of the local news.

What is the rental price of an NFL stadium? Your answer is invited in the comments section.

At least the price is down some. And it comes with an assurance of livable wages.

Who's in violation here? 

Scholar's Notebook points out that we are supposed to teach the Constitution, but that Senator Byrd's amendment may be itself unconstitutional. He points out, interestingly, that the latest omnibus education bill in Minnesota explicitly permits teachers to use original documents, even if they have that pesky G_d word in them. Cheri Yecke, meanwhile, reminds us that the pesky democracy word isn't.

I wonder if our Democratic Citizenship course understands those points?

Liveable wages in St. Paul 

Over at DowningWorld, David is thinking about a proposal to require firms receiving subsidies from the city of St. Paul to pay higher wages. In a followup piece, David says this.
It's been fairly common for some time for cities to assist businesses either with some kid of grant or by giving some sort of property tax relief. This must be what is meant by "subsidies."

If that's the case, then it absolutely makes sense to consider the wages the subsidized business will pay its workers. The purpose of the subsidy is to benefit the city, through jobs and taxes, and a business in a sector where people earn higher wages is going to benefit the city more than a business that pays workers lower wages.

So it becomes a matter of return on investment. If public dollars are to be diverted to a private business, then the guardians of the public purse would be remiss not to consider the wages that business will be paying out in the city. If the wages paid are low, that business might not be worth having at the price the taxpayers are being asked to pay. The city may be better off letting that business leave, and concentrating on attracting businesses that do pay their employees well.
I have written about this before, and this appears to be the same type of proposal discussed in St. Cloud. In his first post, David points out that these subsidies are not free:
And how will the city pay more? Raise taxes, or cut services, like rec centers and libraries, and filling the potholes in the streets. But at least we'll be making sure that someone who may not even live in St. Paul is getting a "living wage."

This is along the lines of the Green Party mayoral candidate who wanted to impose a city income tax. They think they can just take and take, and there are no consequences. But really, what does simple economics matter, when you mean well?
...which is the point I was making as well. You give subsidies, that lowers the revenue you have to fund other city services, and you either must raise taxes on someone else or cut back on services. The money does in fact come from the economy.

So here's the question that David's followup raises: Should governments be in the business of bidding for high-wage jobs, which in essence is what the living wage legislation does? This is not a Democrat-Republican thing, as Pawlenty's JOBZ legislation is in fact the same type of proposal as the St. Paul desire for living wage ordinances; the movements generate from a common source to which very well-meaning people are attracted.

We know that if the living wage ordinance was applied to all jobs -- whether or not with government contractors, whether or not the business is subsidized -- that it would create massive unemployment. It would be a minimum wage, as I argued before. The proponents get this, so they propose instead to restrict the scope of the ordinance to just the subset of firms that do business with government. What should be the harm? The better question to ask is qui bono -- who benefits from it? First off, to answer Downing's question on "why contractors", simply ask who the alternative to contractors would be? Answer: Government workers, represented by public employee unions. These are huge beneficiaries of living wage ordinances for government contractors; they would restrict the ability of the private sector to compete with union workers to provide public services.

But more to the point is that, as an anti-poverty program, trading business subsidies for poverty reduction is a bad bargain. The poor are unlikely to be able to get the jobs provided; the biggest problem for the poor isn't a low wage but insufficient hours of work. It also takes away from the starter jobs the poor need to develop job skills that allow them to move up the wage ladder.

If governments wanted to help they would focus on these things. But before you spend $1 on any of that, ask yourself why the private sector isn't already providing those opportunities? The answer is: it is. You call it "McJob."

Monday, September 19, 2005

Family in the news 

Still on the road, but news from home is that Mrs. Scholar makes the paper. She credits/blames me for converting her to vegetarianism. That tabbouleh recipe at the end is one we use around the house constantly.

Saturday, September 17, 2005

On assignment 

Captain Ed and the Fraters will be on NARN today, and they have the blogosphere's favorite cartoonist, Chris Muir of Day by Day, on in the 1pm hour. Your streaming audio experience begins at noon CT, here. I'm still out on assignment, and will post intermittently through Monday night.

Friday, September 16, 2005

FootFlash Football Follies, week 1 picks 

Flash and Learned Foot have entered their selections for the three gams I offered on Wednesday.

Week #1

  1. KC (-1) @ Oakland. Flash wants the Raiders, Foot thinks this is KC in a walkover
  2. Miami @ Jets (-6). LF will lay the touchdown and take the Jets; Flash says Jets win but don't cover the number.
  3. Buffalo @ Tampa Bay (-2.5). Foot wants the Bills and the points. Flash is over the moon for Gruden and says Tampa easily wins this game.
Interestingly, they are against each other on all three games, so we'll have a leader after week 1. I will refrain from picking the games here myself,

UPDATE: Was busy catching a train, hit publish too early. I mislabeled Flash's pick in game 2 (noted in italics, sorry Foot!) and I meant to add that Tampa Bay is the trendy pick in Vegas this week. Is it resurgent Grudenmania or belief that Cadillac breaks on through? The Scholars are bullish on the TB running back, but the Bills are no ordinary defense. The bigger question is whether McGahee can run on the Buc defense: Bills are 8-0 when he gets a c-note on the ground.

One worrying piece 

This will generate a lot of talk over the weekend.
Consumer confidence fell sharply in August due to the surge in gasoline prices. "Consumers have found it increasingly difficult to cope with the recent surge in gasoline prices as their required budget cutbacks escalated each time they filled their gas tank," according to Richard Curtin, the Director of the University of Michigan�s Surveys of Consumers. The unusually large August decline was widespread among all demographic groups and across all regions of the country. "Consumers anticipated higher inflation, higher interest rates, higher unemployment and a slower pace of economic growth during the year ahead," Curtin said. Although consumers did not anticipate a recession during the year ahead, they were more likely to expect an economic downturn sometime during the next five years.

The Index of Consumer Sentiment was 89.1 in the August 2005 survey, down from 96.5 in July and 95.9 in August of 2004. Only ten monthly surveys since 1978 recorded a larger one-month decline. The Index of Consumer Expectations, a closely watched component of the Index of Leading Economic Indicators, fell to 76.9 in August, down from 85.5 in July and 88.2 in August 2004.
This is pre-Katrina, too. There is a good deal of thought out there that the current expansion is substantially buoyed by consumer and business confidence (see for example Business Week last week and today.) I think business more than consumer confidence will matter here, but there's no doubt at this point that consumer spending is being effected both by high gas prices and concern over the effects of Katrina.

Stuff I'm reading today 

It's a travel day as I'm away on assignment through Monday. I have downloaded through my aggregator some interesting stories to read; I may get back to these later.

Back later this PM with more, if I can.

Thursday, September 15, 2005

The wisdom of experts 

I think this makes great sense.
The very method by which one becomes an expert explains why experts are much better at describing, explaining, performing tasks, and problem-solving within their domains than are novices, but, with a few exceptions, are worse at forecasting than actuarial tables based on historical, statistical models.
Maybe they should be more pragmatic.

Economic effect of Katrina -- looking at local data 

A friend directed me to a site on labor market statistics for the areas affected by Katrina. This is issued by the Bureau for Labor Statistics. The data reflect wage data and employment for the "most affected areas", defined as "the 8 counties in Alabama, 31 parishes in Louisiana, and 47 counties in Mississippi that were designated by the Federal Emergency Management Agency (FEMA) for both individual and public disaster assistance as of September 8, 2005." The area contains over 145,000 establishments with about 2% of national employment and about 1.5% of the nation's wage bill. The area had an unemployment rate of 5.8%; it was over 7% in many of the counties and parishes.

By far the flooding in Louisiana did the most damage to the local economy -- 18,000 firms were flooded out, with quarterly wage bills of nearly $3 billion. Most of the damage in Mississippi was due to the high winds of Katrina itself, but the total damage there was about $415 million.

All told, in the most affected areas about $76 billion in wages were paid in 2004. If that area uses labor at about the same rate as the economy as a whole, the hit to GDP as a result of the damage done should be somewhere around 1% of GDP. That's pretty large, but not catastrophic, and still probably unlikely to tip us to recession. James Hamilton's guess that at least 200,000 jobs are lost for several months looks quite reasonable with the data provided by BLS today.

Teach 'em young 

Reader Roger Lewis shares this observation made while he walked to lunch on Atwood Mall today.
Yesterday at lunch, Delta Sig sold a brat and pop for either $2.50 or $2.75. Today the Aviation Club is selling a brat and pop for $1.50. No damn wonder the airlines are filing bankruptcy!

How much is spent on education? 

The answer, says John LaPlante, is "more than you think." He cites a study from Oklahoma that perhaps as much as spent off-book as on.
So if the official numbers understate the true effort by at least half, where does that the extra money go? Shell games and Enron-like accounting, say the authors. Some money spent on education is funneled through departments outside the Department of Education. Some money is spent (or in some cases, obligated for payment in the future) on the teachers' retirement plan, which has a gross imbalance between promised benefits and income. Some of the money being spent on education now, in other words, is being deferred to the future--a future that will put a tight squeeze on other public priorities and on taxpayers.
The per-pupil amount in Oklahoma could be $11,250 per student, rather than the official number of $6,429. Someone should duplicate this study for Minnesota.

Another one for the principles class 

When I'm asked what the most important concept in economics is, most people expect me to say supply and demand. I actually answer comparative advantage. But then comes supply and demand, and nothing illustrates that better than showing examples of where governments try to avoid the market as the mechanism for rationing goods and services. One I'll use this term is the story of Indonesia's energy policy put up today by the Mises Institute. Indonesia is spending $522 per person this year to impose a price ceiling on gasoline and other fuels -- this in a country with per capita income of $810.

One might wonder why they do this. The article's author, K.Y. Leong, makes a compelling argument that this is part of the Suharto legacy.
For example, there are no less than five toll-collection points between Jarkarta�s city centre and the international airport (about an hour�s drive), all owned and operated by the sons & daughter of the ex-Indonesian President Suharto. All car distribution businesses and assembly plants are either owned directly by the members of the Suharto family or in partnership with foreign investors. Again it is in their interest to encourage car ownership and usage. They couldn�t and wouldn�t give gasoline away, so the next best thing was to strong-arm the government into a costly subsidy scheme. Thus, the government�s predicament today.
Private toll booths. Now that's an economics story!

UPDATE: Phil Miller weighs in:
...if it weren't necessary for students to have been exposed to the concept of opportunity cost before they learn about comparative advantage, I'd teach opportunity cost second.
Exactly so.

That's what they call "economizing" 

Katie Newmark is correct: This is the kind of story that bring a smile to a principles of economics teacher's heart.
With gas prices in the Washington region among the highest in the nation, increasing numbers of beleaguered commuters are looking to trade two-hour treks on congested freeways for speedy telecommutes via the information superhighway, teleworking advocates say.
And the price rose, and lo, the quantity demanded fell. Demand curves slope downward after all.

Levine moving on 

Arthur Levine, the President of Columbia's Teachers College is stepping down to continue working on a his study of the state of educaton schools. He also argues that ten years as leader of a college uses up all his ideas. I've often argued that presidents need term limits for the good of the university.

The Scholars wish him well. The Chronicle of Higher Education will be running an article on his work on the education school project next week, and I can't wait to read it.

Wednesday, September 14, 2005

Bush as pragmatic Christian 

I seem to be getting stuck in this mode of linking two other posts together, but I find the linkage allows me to synthesize some thoughts. Here's another. I first read this article last week, on how both George W Bush and William Rehnquist don't like strict adherence to theory. Now of course not having a theory makes you both unpredictable and unlikely to know when enough is enough, as Professor Stuntz argues. But, it has the virtue of perhaps preventing you from making huge mistakes. Thus, while one can argue...
[Bush] isn't running around the world toppling governments and rebuilding nations. A better summary would go like this: America's interests changed after September 11, and in the Muslim world, some targets of opportunity appeared. Bush exploited them, or tried to. His is the sensibility of a business executive who says: Here's some money on the table. Let's pick it up. can see that he's likely to be benefitted by good luck. Some people -- you know them, don't you? -- can have lots of good luck but are so beholden to being right that they avoid that luck. Stuntz continues:
There is something charmingly modest, and deeply conservative, about that vision of law and governance. Conservatives have long believed that human nature disposes us to arrogance, that we're not as smart and not nearly as farsighted as we think we are. The world is a terribly complicated place. If I think I've figured it out, I'm bound to be wrong, maybe disastrously so. Those who run things should not be enforcing some ideological orthodoxy but muddling along -- looking for targets of opportunity, picking up money on the table, testing their intuitions against those of others. It's not a grand vision of how the Supreme Court or the White House should work. But perhaps all those grand visions -- there is no shortage of them -- will lead us to very bad places.

Now here's where readers not kindly disposed to the President will protest but he never admits failure! Or at least he didn't, until now. And I left it there until reading Grant McCracken today on Bush as a practicing Christian.

He reaches out and thanks these people for their criticism. After his meeting with Bush, the mayor of New Orleans, Mr. C. Ray Nagin, said, "If anything, he told me he kind of appreciated my frankness and my bluntness."

This might be the triumph of a Christian generosity, a turning of the cheek. It's hard not to notice that no one takes Bush's Christianity seriously, unless, in my opinion, they take it too seriously. No one seems ever to read Bush's behavior as if he were being animated by Christian beliefs or practices. Instead, people treat his Christianity as if it were somehow "part of the act," an opportunistic play for sun belt, heart land, anti-coastal voters. No one seems to believe that George W. Bush is ever actually listening when in church. {emphasis mine --kb}

My impression of most scribblers is that they are wholly uninformed on what it means to be a "practicing Christian." I use the quotes because what I would call practicing is probably different than others, but the differences aren't as important as the action of trying to be like the person you want to be when you leave Sunday service. An opening part of the service I attend each week is a confession, that you didn't hit the mark. That doesn't mean you didn't take it seriously, only that you recognized your sinful nature. I do sense that part of Bush.

Of course, McCracken argues, this could be just another part of the Bush pragmatism, but even that has the quality of charity.
Or Bush's response to the mayor of New Orleans might be a triumph of a leader's pragmatism. It says, effectively, �your criticism helped me see the work we had to do. Thanks.� This is the selflessness of leadership. The leader accepts that people will behave badly. He/she accepts that people will behave badly at his/her expense and the expense of his/her presidency. The leader might engage in a blame game, but, really, what would that accomplish? A leader "takes the hit" and moves on to solve the problem.

I'm forwarding that paragraph on to others that I work with, and that's the goal I'll try to hit. I will confess not hitting it each Sunday, and resolve to try again next week, and the next, and the next.

Gotta lay your money down 

I absolutely love this idea: Stephen Karlsson suggests we economists rent the Mt. Washington Resort in Bretton Woods NH for a night to hold a monetary conference. I'll up the stakes a bit: We make it an endorsement contest from economists for the next chairman of the Federal Reserve. The betting is still on Bernanke, but I think the odds are good on Feldstein.

The value of newspapers, rolled up or open 

A rolled up newspaper across the snout of Brooklyn College's administration has led them to back down from their attempt to intimidate KC Johnson. FIRE has more.

My open local newspaper this morning leads to this letter in the opinion page. Writes Patricia Strang of Foley:

An idea popped into my head during the current gas crisis.

To get some type of handle on the situation, our nation's businesses should begin by returning to the policy of not working on Sundays.

Families would be able to reunite, churches would be full once again, money would be saved and some stress would be reduced.

"Aw jeez, WalMart's closed. Let's go to church, Martha. And while we're at it, fix me dinner since there I can't get into Burger King. Invite the kids to walk over. Don't want them using gas."

If there was no such place as Foley, Minnesota, we'd have to create it.

Imagine poor Kathleen here, who would have gotten more notice for this hilarity if only Patricia hadn't shown up.

Better than Berry bikes 

An old reader here, the Wacky Hermit, sends a story of another Berry Bike story, this one at Utah State University. She writes
...they are actually taking names of whom to hold responsible for damage and repairs. I should also point out that Utah State's student population is heavily Republican and conservative. I've joked before that it is the Utah Branch Campus of the Rush Limbaugh Institute For Advanced Conservative Studies.
And indeed, when you make individuals responsible for the bikes, you should get better behavior.

FootFlash Football Festival, Week 1 

I am serving this year as arbiter for a contest between Learned Foot of The Kool Aid Report and Flash of Centrisity for a football picking contest. My instructions are three games with lines. My line source this year will be Jim Feist, one of those gambling gurus you see on some three-digit cable channels on Saturday mornings on the TV the kids don't watch. (How do you know this? -- ed.)

I am looking for fairly nteresting games, but because we're in Minnesota we'll steer off Packer and Viking games for the most part. I will pick the games and try to give a context for why it's interesting. Here are this week's three games. The them this week: Former Vikings.

  1. Kansas City (-1) @ Oakland. The Chiefs come off a blowout win against the Jets, while Oakland has had ten days to get ready for a divisional rival. I wanted to put this game up for Moss-talk from the contestants, but the added spice of Larry Johnson should make for great witticisms.
  2. Miami @ NYJets (-6). Miami got a victory against the Broncos in Nick Saban's pro coaching debut. Gus Frerotte in charge of the offense, looked better than Daunte Culpepper. Foot will have fun with the news this "Matt Turk, I-R, pulled groin." Humor people, humor!
  3. Buffalo @ Tampa Bay (-2.5). Just because it's a hard game. Tampa Bay comes off the win at Minnesota with apparently a newfound running back in Cadillac Williams (on my fantasy team, thank you!) The Bucs didn't score much against the Vikes and now play a much harder defense in Bills, who meanwhile are breaking in J.P. Losman at QB. I figure that this is the game Chris Hovan gets his start on another injury-filled season.
Good luck with those, gentlemen!

Tuesday, September 13, 2005

A couple more things 

Again, sorry for lack of posting today. If I were Lileks I would have some witticism to explain this. I'm not, and I don't. Just too many things to get done and out today along with about five hours of lecturing and a two-hour church council meeting.

Two things worth mentioning today, though. First, DrJonz at The Attic sends along today's news that Northwest and Delta may go to Chapter 11 so as to avoid making pension payments on Thursday.

Northwest said in a regulatory filing today that it was required to make a $65 million pension payment on Thursday, which it could only miss if it were operating under bankruptcy protection.

Northwest and other companies had asked the Treasury Department to let them skip their September pension payments, citing the impact of Hurricane Katrina on the nation's economy. But in a statement today, the department said it had decided against the move, saying that it was more appropriate to limit relief to companies in the Gulf Coast region.

... Northwest and all the large domestic airlines have been hit hard by the spike in jet fuel prices in the aftermath of Hurricane Katrina, which interrupted production at refineries on the gulf coast.

Even before the storm, however, airlines were already paying about 50 percent more for jet fuel this year than in 2004.

Neither Northwest nor Delta have hedging contracts that would have allowed them to lock in the price of fuel, meaning they must immediately cover price increases in cash whenever they occur.

Given that, and with its cash draining away in recent weeks, Northwest officials apparently decided to file quickly rather than wait any longer, people briefed on the airline's strategy said today.

Add on the strike at Northwest and you could have seen this coming. As a matter of fact, someone did. It's the pensions that are killing them; Northwest has been trying to get relief for quite some time. President Douglas Steenland's testimony made it plain that they were not going to make up the nearly $4 billion pension deficit -- and that's before Hurricane Katrina. I have some difficulty understanding why the Treasury would rather take on the pension guarantee than suspend a $65 million payment.

The other story is quite trivial but also aggrevating: A union in Las Vegas is using temporary workers to picket a WalMart.

They're not union members; they're temp workers employed through Allied Forces/Labor Express by the union�United Food and Commercial Workers (UFCW). They're making $6 an hour, with no benefits; it's 104 F, and they're protesting the working conditions inside the new Wal-Mart grocery store.

"It don't make no sense, does it?" says James Greer, the line foreman and the only one who pulls down $8 an hour, as he ambles down the sidewalk, picket sign on shoulder, sweaty hat over sweaty gray hair, spitting sunflower seeds. "We're sacrificing for the people who work in there, and they don't even know it."

..."We're just trying to help the women that get discriminated against in Wal-Mart," says Greer. "We're out here suffering a lot for these people." He pauses, moves his sign so that it blocks the scorching sun on his leathery face, and considers the working conditions of his colleagues out here working for the union.

"We had one gal out here in her 40s, and she had a heat stroke. I kept making her sit down, I noticed she was stepping (staggering), and I made her sit in the shade," Greer said. She went home sick after her shift and didn't ever return to work.

Another woman, Greer said, had huge blisters on her feet and he took her inside to the Wal-Mart pharmacy. The pharmacist recommended some balm, and Greer bought it for her. Since then, he said, other picketers have purchased the balm for their blisters inside the Wal-Mart they are protesting.
Hat tip: Andrew Roth.

UPDATE (9/14): Delta goes down.
The bankruptcy filing by Delta sets into motion what is likely to be at least months of negotiations with bond holders and other creditors over how to restructure the airline. Delta executives believe that because Delta has already spent the past year implementing a turnaround plan, it could avoid a prolonged fight with its creditors over the company's fate.

Still up in the air is what happens to Delta's employee pensions, which are underfunded by $5.3 billion. Delta and Northwest have lobbied for proposed pension legislation now working its way through Congress. The proposed legislation would give the companies more time -- 14 years under the current version of the U.S. Senate bill -- to catch up with their required payments. However, in bankruptcy, the company's creditors could push for the company to terminate its obligations and dump them onto the federal Pension Benefit Guaranty Corp., following in the footsteps of United and U.S. Airways. Delta executives previously have said that if they win passage of the pension bill the company can continue to honor its pension obligations, even in bankruptcy.
I.e., they're playing chicken with Congress.

UPDATE 2 (10 minutes later): And Northwest throws in the towel too.


I doubt I get to post anything until this evening, if then. Had a morning-long seminar to deliver today and teaching this afternoon followed by a church council meeting. Meanwhile, the best post I've seen today -- without as much time to look as normal -- is Tyler Cowen on Jeff Sachs' volte face on governance and development. See also this review of the new World Bank publication "Doing Business." Its last two paragraphs:

In 90 per cent of the countries surveyed, firms ranked tax administration among the top five obstacles to doing business and in some, dealing with the bureaucracy was considered a bigger problem than the actual rates, not least because the more complex the system, the more likely it is that �informal payments� will be needed to smooth the path. Ask any Italian businessman.

As a rule of thumb, the heavier the regulatory burden, the larger the black [underground] economy and the bleaker are poor people�s chances of escaping poverty. The theme of this report is streamline, simplify. It is by no means addressed only to the Wretched of the Earth. To learn that of the 30 least business-friendly countries in the world, 23 are in Sub-Saharan Africa is no surprise. But did you know that Germany ranks below Lithuania, France below Fiji, and Italy below Bangladesh? Or that in Europe, only Denmark and Britain, in that order, make it into the top ten?

I wonder where New Orleans would have ranked?

Monday, September 12, 2005

How much of what you know is wrong? 

I bet I've used that title before. I can't quite place where it comes from, but I first saw it on some faculty member's bulletin board, and I think he said it was George Stigler. I've seen several examples today that drive me to the same thought.
As Kling points out, the problem with Dowd is that she thinks these are engineering problems rather than economic ones. I agree with the late Paul Heyne that economics IS a defense of the market system.
The economic way of thinking shows how social processes that look like recipes for chaos (and that have often been so described) produce actual cooperation and advance the purposes of those who participate in these processes. Adam Smith invoked a semi-theological metaphor to characterize this process: the invisible hand. Because economic theory explains the working of the invisible hand, it is in a very basic sense a defense of market systems.

Do DeLong, Dowd and McManus think the problems of energy and disaster response are engineering problems? For they are not. They are the description of millions of individual interactions. How much of what you know about each of these interactions is wrong? Probably a great deal. And the number of "smart people" you put in a room called FEMA or FEMMA or whatever isn't going to help. (And firing Brownie isn't going to change things, either.)

We all make mistakes 

In the Chronicle of Higher Education (subscribers only), while claiming he is the victim of a witch hunt, Ward Churchill impugns an entire profession and shows why he is unqualified to be a professor.

"This is not a question of the quality of my scholarship," he said in a telephone interview on Sunday. "It's a fishing expedition."

"There would never have been an issue raised if it weren't for the [little Eichmanns] speech," he said. "Now they're going to sit there will all due sanctimony and cluck-cluck about whether I cited a source at note 40 rather than note 14."

Mr. Churchill said he had published more than 4,000 pages of scholarship and argued that examining the work of any scholar with a similarly extensive publication record would produce "a half-dozen paragraphs, half-dozen footnotes that you can build some kind of a case on, if that's your object."

This is comtemptible. Of course we make mistakes in scholarship, but the statement belies a callous disregard for accuracy in Churchill's scholarship. The board of inquiry looking into these cases is charged with determining whether these are "serious errors" or "misconduct". Errors are of course to be corrected, and an academic's reputation is harmed in the process, but nobody is fired from a tenurable post for errors. Churchill's attempts to conflate error and misconduct smears the entire profession, and indicates that he doesn't particularly care if his footnotes are accurate. Such people are not fit to be academics.

My disposition is none of your business 

Columnist and former Minnesotan Linda Seebach does a great service in covering the KC Johnson story. Her discussion of the use of "dispositions" theory in colleges of education is very enlightening.
The National Council for Accreditation of Teacher Education, which gets to stamp its imprimatur on certification programs that conform to its views on pedagogy, in 2002 moved further into politics by making student "dispositions" a part of its accreditation process. To earn accreditation, teacher-preparation programs were evaluated on how well their graduates demonstrate a disposition toward social justice.

That's in addition to demonstrating that their graduates know their subject matter well and are effective in presenting it in the classroom, two essential matters that most ed schools are notoriously unable to accomplish.

The problem with "social justice" as a goal is that it is something everybody can be for as long as they don't have to agree on what it means. Does social justice in college basketball require that men and women play on the same teams, or on different ones? And if they play on the same teams, does social justice require that the teams "reflect" the male/female proportion of the student body, or that men and women with equal skills have an equal chance of making the team?
It was this test that Johnson protested, claiming that the lack of intellectual diversity in education schools makes disposition exams a liberal litmus test.
As one conference devoted to the concept explained, using this standard would produce �teachers who possess knowledge and discernment of what is good or virtuous.� Advocates leave ideologically one-sided education departments to determine �what is good or virtuous� in the world.

...The program at my own institution, Brooklyn College, exemplifies how application of NCATE�s new approach can easily be used to screen out potential public school teachers who hold undesirable political beliefs. Brooklyn�s education faculty, which assumes as fact that �an education centered on social justice prepares the highest quality of future teachers,� recently launched a pilot initiative to assess all education students on whether they are �knowledgeable about, sensitive to and responsive to issues of diversity and social justice as these influence curriculum and pedagogy, school culture, relationships with colleagues and members of the school community, and candidates� analysis of student work and behavior.�

At the undergraduate level, these high-sounding principles have been translated into practice through a required class called �Language and Literacy Development in Secondary Education.� According to numerous students, the course�s instructor demanded that they recognize �white English� as the �oppressors� language.� Without explanation, the class spent its session before Election Day screening Michael Moore�s Fahrenheit 9/11. When several students complained to the professor about the course�s politicized content, they were informed that their previous education had left them �brainwashed� on matters relating to race and social justice.
So now he is being persecuted. Seebach points out that this is a double standard: Colorado University does not prosecute Ward Churchill for his "little Eichmanns" speech, but Brooklyn College threatens Johnson for exercising his right to criticize pedagogical standards.

SCSU has a history with dispositions exams. In 1992 the Social Work Department issued a "position on attitudes towards gay and lesbian people." Asserting that there were 1500-2000 gay and lesbian members on campus (which would be about 10% of campus population) they stated:
Many of our students come from strong religious backgrounds that do not accept homosexuality. For these students who seek a career as professionals in social work it is especially important that they understand what it means to accept gay and lesbian people. [It] does not mean accepting them as individuals while simultaneously abhorring their behavior. The separation of the client from the client's behavior cannot be used here to resolve a social worker's personal or ethical dillemmas. It is not o.k. in this case to "love thesinner and hate the sin." ... The only legitimate position of the social work profession is to abhor the oppression that is perpetrated in gay and lesbian people and the act personally and professionally to end the degredation in its many forms.

...Students who have predetermined negative attitudes towards gay and lesbian people, and who are not open to exploring values will not find this program very comfortable and should probably look elsewhere for a major.
A letter was signed by the Center for Law and Religious Freedom, the MCLU, the American Jewish Committee and the American Jewish Congress, the Intercollegiate Studies Institute and the Center for Individual Rights which argued the policy violates state and federal law and the "nation's commitment to freedom of religious belief and speech". The Social Work Department, facing this criticism in both campus and the press, backed down. But the thought remains there.

Is not the dispositions theory used now also in violation of the Supreme Court's opinion in West Virginia v. Barnette when it said
If there is any fixed star in our constitutional constellation, it is that no official, high or petty, can prescribe what shall be orthodox in politics, nationalism, religions, or other matters of opinion.
Professor Johnson is protected in his speech, and FIRE should continue to do all in its power to get Brooklyn College to stop this behavior.

Used book stores 

Thomas Benton worries that we're losing them to online sellers.
I grew up in an urban neighborhood that had only a few bookstores. One was a national chain that had the usual selection of best sellers, self-help books, travel guides, and an assortment of remainders on politics and entertainment. The other store was a used-paperback exchange, where you could return a book and pick up a new one for a quarter. It mostly stocked romance novels, spy thrillers, and horror stories. ...

I knew almost nothing about academic publishing until I arrived at college, and then I encountered scholarly books only in the library when I was writing research papers. Where were you supposed to buy them? Such books weren't sold in regular stores. As an undergraduate, most of the literary criticism in my personal library consisted of dozens of Cliff'sNotes that I read in tandem with books like Madame Bovary and A Portrait of the Artist as a Young Man. I never thought about a scholarly book -- say, an authoritative edition of a major author -- as something I might purchase until I arrived at graduate school in the early 1990s.

On my way to and from classes, I walked past used-book shops such as McIntyre & Moore, Pangloss, and Starr Books, which was at the rear of the Harvard Lampoon building. At first I was lured in by the discount racks next to their doors. Later, I became enraptured by the volumes of serious books about which I knew almost nothing. It was as exciting and humbling as discovering an unknown continent.

Gradually, buying books -- new as well as used -- became a habit, as the local booksellers siphoned off a substantial portion of the money I made as a research and teaching assistant.
Most campus bookstores today consist of an area where you find the textbooks for a course, and the rest devoted to the selling of college memorabilia. One that does not, of which I remain fond to this day, is the bookstore at the Claremont Colleges (where I went to graduate school). Though much smaller and with a much inferior collection to that available twenty years ago, the Huntley Bookstore still keeps a fairly nice collection of new scholarly works and some classics. Much of the collection I brought to St. Cloud came from there. (Like Benton, my urban neighborhood had the chain bookstores of the Seventies and those little used book places like you find in lake communities here in Minnesota, with romance and adventure books dominant.)

The other bookstores I saw in the village in Claremont too were quite special, such as Chancellery Lane and Claremont Books & Prints. Along with the Rhino Records shop, these sucked down a great deal of my assistantship money. To this day, I like old used bookstores. St. Cloud has one, and I have remarkably found good bookstores in places like Alexandria, MN. We vacation up there regularly, and no trip is complete without a stop at Vikingland.

I long ago stopped trying to track my purchases of books between used bookstores and hitting Abebooks or Powells online. I'm sure it's a small fortune, but what I've read is a fortune gained. I agree with Benton that online works great when you know what you're looking for, but you miss the pleasure of browsing to find something you had forgotten you wanted or to have a title catch your eye. Mrs. Scholar is amazingly tolerant of my wandering for hours around them, knowing that I find them intoxicating.

Friday, September 09, 2005

An early bloggiversary present 

In about an hour this blog will be three years old. About a year and a half ago I had the first pleasure of meeting the gentlemen of Powerline, and am happy to consider them friends as well as Northern Allies. So when I look on Powerline News (which is now my homepage for Firefox; IE points to my university page) and see Ukraine and Lighter Topics in their aggregator, I think, hey, maybe John or Scott or Paul mentioned me.

I sure in heck didn't expect this!
As you probably know, shakeups are in the works in Ukraine, as the Orange Revolution recedes into the past and practical politics take over. Do I know anything about it? No. Nothing. Fortunately, however, our good friend King Baniain, chairman of the Economics Department at St. Cloud State University, was formerly an economic adviser to the Ukrainian government, knows many of the relevant players, and continues to follow the situation closely. So if you want to know a lot more about what is happening in Eastern Europe, one of the world's most pivotal areas, than we or the New York Times can tell you, check out King's site...
Thanks a million, John! And welcome. If you missed the first three years and are interested in Ukraine, just come along to the next article.

And yes, I'll be on NARN tomorrow to celebrate the bloggiversary (and, coincidentally, my parents' 55th anniversary). Tune to AM1280 the Patriot or directly to the streaming audio, 12-3pm CT.

Ukraine: New government takes form 

(note earlier coverage of events on this blog, chronologically, here, here, and here.) Updates below through 11pm this evening.

If Ukrainian President Viktor Yushchenko is to come out of this governmental crisis empowered, he is going to need to avoid the newspapers for awhile.

The government's breakup, amid allegations of corruption, deepens a crisis that has cut into the popularity of Yushchenko and left him looking isolated, especially in contrast to the broad coalition that joined in last year's mass protests, which many Ukrainians saw as a new start for their nation.

"Independence Square betrayed," declared the daily newspaper, Kyivskiye Vedomosti, while the newspaper Den pronounced: "Burying the Revolution."

Nonetheless, a new government is being formed, and according to new chief of staff and longtime Yushchenko confidante Oleh Rybachuk, "You will not see business representatives in the new government." You can expect that Ukraine's mainstream media will hammer Yushchenko in the days ahead, as many of the dismissed have ties to media outlets and the previous government.

Part of the PR failure is that there was little planning for this removal of former Prime Minister Tymoshenko. According to several reports (example) there was an agreement on something short of sacking the government during the day, but by night on Thursday the deal had fallen apart when Tymoshenko refused to create a new government without those considered to have dirty hands.

Yuri Yekhuranov, the acting PM, is considered by most to be more pro-Russian, so that perhaps Russo-Ukrainian relations will bemore friendly in the future.

I'll update later this afternoon. Tymoshenko is on the TV station Inter there right now, and snippets of reports indicate she will work "in a different direction" from Yushchenko from now on and is accusing other Yushchenko allies of stealing state funds. It looks like a complete breakup.

UPDATE: This comes from an interview with Alexei Markarkin, in Gazeta (courtesy Johnson's Russia List):

Question: Was the coalitionYushchenko raised to the pinnacle of power [headed by Tymoshenko] doomed to disintegration?

Alexei Makarkin: It would have happened in any case, sooner or later. The stakes are too high. The constitutional reforms that come into effect on January 1, 2006, will shift a great many powers from the president to the prime minister. And the prime minister is to be nominated by the party that win the parliamentary election. It's a different matter entirely that the Cabinet dismissal at exactly this point doesn't benefit Yushchenko in the least. Had it been possible, he'd have preferred to have the coalition last until the election.

Question: If Yushchenko did not want the situation worsening, why would he decide to dismiss the Cabinet?

Alexei Makarkin: Timoshenko forced him as well. She had deliberately aggravated the situation. At first, Yushchenko was of the mind to fire Zinchenko alone. Encouraged by Poroshenko, you know. When Poroshenko solidified his positions in the upper halls of power, Zinchenko of Timoshenko's team made his move and accused men close to the president of corruption. The president had to get rid of Poroshenko after that - or he would have looked like ex-president Kuchma.

If so, and it fits the facts pretty well, you have to wonder why Tymoshenko thought now the time to jump. September is a key month in the Ukrainian economy, which still depends greatly on the harvest to make ends meet for most of the population.

Taras Kuzio argues that Yushchenko's chances for a parliamentary victory -- currently looking slim -- needed a boost.

By acting decisively to remove officials accused of corruption, Yushchenko has
shown that his presidency differs from that of Kuchma, who condoned corruption
in exchange for political loyalty.

Zinchenko has already taken evidence to the prosecutor's office related to Poroshenko's allegedly corrupt activities. Accusations against him may be personally difficult for Yushchenko, as Poroshenko is the godfather of one of Yushchenko's five children.

Yushchenko's decisive actions have resolved the crisis for now. But there remains much to be done and his allies are deserting him. Yushchenko's Our Ukraine parliamentary faction has progressively disintegrated throughout this week. People's Union-Our Ukraine now has only 45 deputies, down from 100 at the beginning of 2005.

Elections are less than five months away.

Interesting analysis also available from MOBster First Ringer. He wonders whether Yushchenko and Tymoshenko could have played good cop-bad cop. This point is well-taken:
Unfortunately, such an arrangement would neither be good for long-term effective governance nor possible given Yushchenko�s deference to cohesion of opinion. But it could have held the coalition together until the March elections and bought time for Our Ukraine to either gain the seats necessary---by election or alliance---to make Yulia and her bloc expendable.
At some point, however, there had to be separation so that Yulia could get the juiced-up prime minister post after the parliamentary elections that coincide with the constitutional change. She would not be able to promise carrots to her supporters with credibility if she was still part of a cleaner government.

Her path is pretty clear now; it remains to be seen whether her time in government allowed her to gain enough political assets to defeat Yushchenko's candidate.

UPDATE 2: (11pm): The NYT covers Tymoshenko's exit speech.
"He practically ruined our unity, our future, the future of the country. I think this step is absolutely illogical."
Scott Clark wonders if she's going to go populist on Yushchenko. I think there's no doubt she will: This is what got her to spot 1A in the Orange Revolution. Scott's prognosis is spot on.
If she did force some kind of showdown pitting her directly against Yuschenko, it would be scorched earth and I don't think it is all that clear she would win. ... People like her decisiveness, but I think they trust Yuschenko more or at least they want to trust him.
But Tymoshenko is not coming out quite so forcefully yet.

In a final attempt at reconciliation, Ms. Tymoshenko said, the president asked her to reach out to her antagonists in the administration. "How could I reach out my hand to them when their hands were busy stealing from the country?" she said.

Now, she said, using the president's name and patronymic: "I and Viktor Andriyovych will go to the elections in parallel ways. It does not mean it is a war. There will be two different teams, with absolutely different people."


Ms. Tymoshenko made it clear that she blamed Mr. Yushchenko's advisers, not the president himself.

"I will not go to the elections with those people who have discredited Ukraine so much," she said. "I do not mean the president but those in his closest circle."

In other words, there's an olive branch here. This may provide context for the earlier comments that Yushchenko thought there was a deal to reconstitute the government with Tymoshenko remaining PM. It would have been better for him, but it appears there was a struggle over posts, and in the end analysis Yushchenko has the upper hand in that decision and used it. If he convinces Ukrainians that he is both clean and decisive, he may be able yet to win a majority in the Parliament next year and then have the prime minister he really wants. Remember: Yulia was a candidate in the elections last year for president, but withdrew and joined forces with Yushchenko when it was pretty clear that they would lose running separately, putting him at the head.

Contra this article from the Times of London, I do not rule out the possibility that they will hold hands in the Maidan next year.

P.S. OK, need to go to bed, but before I do I'm reading Veronica Khokhlova at Neeka's Backlog and Dan McMinn at Orange Ukraine. If you still want more, go there and just scroll...

Negative supply shocks require contractionary fiscal policy? 

That's macroeconomic-ese for the New Clintonomics. Indyjonz at The Attic sees a pattern. The actual shock is probably not as large as we think; is that because we spend more on disaster relief?

Federal government response to Katrina 

From an email list on which I get information from the Treasury Department:
Lives Saved (rescues performed) 47,300
Shelters 750
People housed in shelters 235,200

FEMA responders 7,500
U.S. Coast Guard personnel 4,000
National Guard personnel 45,000
Active Duty Military 19,000
MREs provided (meals) 17 million
Water provided (liters) 37.4 million

When I've heard people say they think the federal government hasn't done enough, I ask them what would be "enough". How many lives "should have" been saved? How many MREs "should have" been provided?

We can always do more, but at what cost? Coordination failures will always exist, but coordination failures of government are usually overcome with more centralization. As I heard Britt Hume ask on FNC the other night, do we really want that much more centralization? The Fox All-Stars sputtered at that point. Hume was evoking marginal analysis.

Risk is part of our tragic world, and systemic risk like once-in-a-lifetime hurricanes cannot be avoided. It's only a question of who bears the risk.

Cf. Bobby Jindal, Thomas Lipscomb

The best available alternative 

I agree with Sean Hackbarth about the oddity of a comment made by Professor Walter Block of Loyola University of New Orleans, who suggests that charitable donations for relief of the victims of Hurricane Katrina should go to the Libertarian Party. Block argues that tax money is reducing weather control.
The point is, if we the people had vastly more money at our disposal than we do now, thanks to government profligacy with our funds, we would be able to donate some of it to the not-for-profit sector to engage in research and development for weather control.
If I take a dollar away from the government and give it back to the private sector, it is free to spend it as it wishes. Neoclassical economics, as opposed to the Austrian school to which Professor Block belongs, would argue that all the private alternatives would be ranked by each taxpayer receiving a tax cut and the highest ranked alternative would be taken. Is there any reason to believe that controlling the weather would bubble up to the top of the list? I doubt it. Taxes would need to be relevant at the margin to have any practical effect.

Thursday, September 08, 2005

No boogie-woogie for you 

I saw just before class this afternoon a recent graduate of ours who had taken a job at the Hard Rock Casino in Biloxi. He got there only three weeks before Katrina and had just taken delivery of his furnishings the week before the storm. He made it out eventually to Houston. When we first contacted him here, he knew the place was severely damaged, but had been told by Hard Rock that they were going to hold on to their jobs and give them 90 days full pay while they sorted out what they were going to do. He said to me today that, contrary to this report, he says he was told he would not receive his 90 days pay. And this report from Tuesday and another today suggests others may not know their situation either. I do not know which story is correct, but if others can help get to the bottom of it, please let me know and I can contact the student. Meanwhile, a little feedback to the Mirage may be in order too.

You know you're effective when your enemies lose their camoflage 

Almost three years ago, in the initial stages of this blog, a case of liberal bias and denial of academic freedom came about at Brooklyn College, where Robert KC Johnson was recommended to be denied tenure for being uncollegial. Publicity earned reconsideration and he remains on the faculty now. But those that oppose him remain; it was only a matter of time before they came around. As she did the first time, Erin O'Connor is covering this case too. seems that some people at Brooklyn have had just about enough of the whole free speech thing and are seeking to have Johnson punished--ironically for
threatening "academic freedom." The occasion? Johnson's criticisms of the BC School of Education, which has instituted a restrictive and intrusive "social justice" curriculum that evaluates students according to how well they conform to the school's highly politicized definition of what social justice is, and that punishes those who complain that this system of evaluation amounts to a political litmus test. The manner of attack? A threat: if Johnson fails to cease his "attacks," an "integrity committee" may subject him to an entirely unwarranted investigation. FIRE has the
Readers should follow the FIRE link for more details. Here is the article that apparently drew the College of Education's ire. If they're willing to make such a blatant attack on Johnson's academic freedom, it can only mean that he's effective.

Further Ukraine analysis 

Jeremy Page discusses the conflicts between Ukrainian President Viktor Yushchenko, former PM Yulia Tymoshenko, and former security chief Petro Poroshenko -- the latter two sacked by Yushchenko earlier today.
"Once Mr Yushchenko was in power there was a lot of squabbling about who was going to get what position. Mr Poroshenko wanted to be prime minister, but Mr Tymoshenko, a rich businesswoman, won that battle, and Mr Poroshenko became head of the National Security Council, but with greatly enhanced powers.

"Since then there's been a whole series of disputes, particularly over the issue of reprivatisation. Mr Yushchneko promised to reverse some of the fraudulent deals done in the 1990s and at first the Government was very gung-ho - hundreds of deals were going to be reviewed. But they soon hit legal problems and, of course, the potential for corruption was enormous.

"And Ms Tymoshenko, who made her money in the energy business, was trying to reform oil policy, which is very complicated and involves all sorts of complex deals, mainly with Russia. That was another source of squabbles.
Squabbles that, of course, can be cured by side payments or bribes paid to those in a position to reveal them. This is what led to Zinchenko's resignation that triggered the crisis.

Page points out that Yushchenko's choice was to have the taint of scandal fall upon him or sack the government. Now that he's taken the latter course, Tymoshenko will be a powerful opponent. But remember she could not clear the first round of the elections last time versus Yushchenko and Viktor Yanukovych. She may not be able to create a majority in the parliamentary elections next March either. She may find, instead, that she still has to work with Yushchenko if she wants to return to government.

Didn't see this coming 

So yesterday I post a note on the resignation of Zinchenko and the deepening crisis in Ukraine, and a short while ago today word comes that Viktor Yushchenko has sacked the Tymoshenko government.
Yushchenko appointed Yuriy Yekhanurov, governor of eastern Dnipropetrovsk Oblast, as acting prime minister.

Yekhanurov says a key priority will be to ensure stability. Yekhanurov worked from 1994-97 under President Leonid Kuchma as head of the State Property Fund, which oversaw the initial period of privatization in Ukraine.

Yushchenko blamed the absence of what he called "team spirit" for dismissing the government of Prime Minister Yuliya
Tymoshenko. He said interdepartmental conflicts were damaging the government.

"Every day I witnessed more and more confrontations among these institutions at first, then serious conflicts on various
issues, then backstage intrigues, which already started to affect the fundamentals of state policies," he said.
As I have said, the government formed after the Orange Revolution was a coalition, almost a unity government that included many disparate parties. This has obviously worked badly for Yushchenko over the summer. It takes some courage to put a powerful person like Tymoshenko into opposition, but this will no doubt burnish Yushchenko's credentials as the one with clean hands.

In fact, the sacking was overdue. Nonetheless, I can't say I saw it coming on this fast.

UPDATE: Dobre din, Instapundit readers! And dyakyu, Glenn!

Stuffing the standard box 

Since our friend Michael is back visiting, may I call his attention to this article, in which other states are imposing more content requirements on public schools? Lots of discussion of Amistad Commissions in NY and NJ. I was also intrigued by this entry from a sidebar.
In 2004, California passed a law in part to ensure that the history/social science framework would include six documents: The Declaration of Independence; the Constitution, including the Bill of Rights; The Federalist Papers; The Emancipation Proclamation; The Gettysburg Address; and George Washington's farewell address.
Sounds like a good debate question for gubernatorial candidate Steve Kelley.

Wednesday, September 07, 2005

Fallout in Ukraine 

The Orange Revolution has hit a bump. And it might be big.

Viktor Yushchenko's chief of staff Oleksandr Zinchenko quit, and quit noisily, claiming that members of the Yushchenko government are corrupt.

"With my resignation I am trying... to make both the president and his team understand the grave danger of the current situation," Mr Zinchenko told a news conference in the capital, Kiev.

"Now corruption and bribe-taking are growing in force," he said.

Mr Zinchenko specifically named Ukraine's National Defence and Security Council head Petro Poroshenko and senior presidential advisor Olexandr Tretyakov.

He accused the two men of nepotism and also pressure on the judiciary.

He warned that the president could face a "counter-revolution" if he did not fire Mr Poroshenko and Mr Tretyakov.

Yushchenko thought enough of this action that he cancelled his trip to Poland this week, and circled the wagons by bringing his long-time trusted aide Oleh Rybachuk to replace Zinchenko.

The Ukrainian president's hands are tied because, if he sacked any of the officials at the heart of the corruption allegations, he would risk upsetting the delicate balance of power inside his administration, said analyst [Yuri] Yakimenko.

"Those who are already in power are likely to remain in their jobs. For a month or two the situation will remain unchanged," he said.

The delicate balance, which I described last spring, emboldens prime minister Yulia Tymoshenko, who is trying to keep the prime minister's post past the March elections, when it will have far more power than it currently does. There is discussion now that Tymoshenko has prepared a list of candidates for the parliament in case Yushchenko does not back her further from here. She would probably be difficult to beat.

She may well join forces with Poroshenko, who is often referred to as the "Chocolate King" and has a pretty fat bank account that would help with the campaign. The result could be a weakened presidency for the final three years of Yushchenko's term.

All this probably probably wish they had a journey of their own.

Transfers versus tax breaks for Katrina 

As I've been thinking about rebuilding the Gulf area blown down by Katrina, I've also been working both on starting classes and getting some research projects down the road, and one of them might be instructive. I was led to The Globalist (by PSD Blog) for an article on the Millennium Challenge Corporation. MCC is designed to hand out foreign aid money outside the usual process with the State Department (via USAID), or the IMF or the World Bank. (Full disclosure: I have worked as a contractor on several USAID projects.) MCC has been the subject of a lot of carping from Congress, which continually underfunds the Administration's requests, but it uses a set of objective criteria to determine who gets funding for their projects, has loads of accountability and much less red tape.

The problem is that it has funded very few countries; three weeks ago Georgia was announced to become the fifth country to gain a Challenge Grant for an anti-poverty program. Looking at the Globalist article, drawn from this Brookings Institute paper, I wondered if the the Gulf areas now seeking aid from the federal government should be required to use a set of guidelines (like these from MCC) to justify receiving money from the government? Would it make more sense than handing out tax breaks as suggested before?

I'm thinking about this. I think the answer is no -- no matter how much accountability you put into a program, nothing gets resources to their highest-valued use better than the market unfettered by distortionary taxes. But it would be a lot better than massive transfer to state and local agencies, particularly when they don't seem to understand their own jobs. The only reason we use transfers for foreign aid is that we don't control their tax systems (though cutting tariffs on goods from countries we're trying to help would be a better idea.)

Looking at Glenn Reynolds' list of lessons from Katrina, the overwhelming impression I take is that people need to be self-responsible, and government's function is chiefly law enforcement. Too bad it takes a disaster to remember that.

Ex-dean takes on the student paper 

The St. Cloud Times reports that former dean Dick Lewis has decided to go back to suing the campus newspaper that libeled him. Obviously there are no deep pockets, and the students who wrote or supervised the article are gone. The faculty advisor remains, but he would not lose money from this. But that's not the point. As I said then, if he can show the campus paper libeled him, and then show that the libel was part of the reason he was fired later, it strengthens his eventual discrimination case against the university.

Christmas in September comes with an arrest record 

When we said there was a hot time in the old town Monday night, we weren't kidding.

Almost 125 people were booked into Stearns County Jail for offenses related to move-in day at St. Cloud State University, likely the most booked into the jail from any one event.

Most of the 235 offenses cited by police were related to the use of alcohol during the weekend, Capt. Dave Johnson said.

It's believed that the 90 arrests made two years ago during move-in day was the most people booked into the jail before this year's enforcement.

Wow, 125! Think we can make the list again? Most got busted for underage drinking or open containers, but twelve for public urination. Remember, there were over a hundred cops in the neighborhood. You can't find a john?

Tuesday, September 06, 2005

Quote of the day 

Alex Tabarrok, discussing the wrongheaded conclusions of Jonathan Kozol,
Barricading parents into the poor schools their government offers them is like barricading people into communist East Germany.

That pretty well sums up Kozol and many of the voucher opponents. If they can't persuade you to stay in their crappy schools, they'll coerce enough tax dollars out of you to compel you to stay.

Jiffy Pop elbow 

Speaking of James, he mentions in his last BackFence:
Who was responsible for keeping secrets in the popcorn trade; how did the secret get out, and what are the repercussions now that the popcorn has been outed? (Robert Novak did not return phone calls by press time.) If this goes all the way to the top, and the rumors about the super-secret nature of the popcorn industry are true -- you know, midnight induction ceremonies where the novitiates wear aluminum Jiffy Pop hats, smear themselves with coconut oil and bow to the mummified body of Orville Redenbacher -- then we can expect purges, assassinations and power struggles that will roil the popcorn world. Or rather, shake it from side to side in a continual motion.
I recall a year when Mrs and I visited at Pitzer College in Claremont, we lived in a studio in the back of a woman's house in the downtown area. We were at that time fully into the vegan lifestyle, which is damned difficult when you have a studio refrigerator and no more than a hotplate for your cooking. Doing dishes with a sink the size of your glove compartment further dampens the experience. During this year all our popcorn was JiffyPop -- natural flavor of course, because we're vegans dammit! -- cooked on the hotplate. We are very lucky not to have burned down the studio. But I'm more disturbed by two things. First, this ad.
Jiffy Pop is the family fun treat! No other brand of popcorn offers Jiffy Pop's self-contained popping pan. It can even be used outdoors. And it offers a fresh, homemade taste that no microwave popcorn can match. Jiffy Pop is as much fun to make as it is to eat!
When you have to move the thing "side to side in a continual motion" on a low enough heat to not burn down your studio, you realize while standing there that this is wrong. If you move side to side you must stop to go from one side to another. This motion is not good longterm on your arm, I can attest. I can't snap off the curveball quite like I used to.

And as anyone who's camped will tell you, cooking it outside usually comes to ruin. And the realization that the little metal handle gets really hot when the pan is on fire.

Oh, and one more thing? We bought a couple of containers two weeks ago when we went to The Lake (tm). The pan is now black, which is new! and improved! and wrong! wrong! wrong!

Maybe that's how the back went out.

Worse yet, The Cabin at The Lake had a microwave.

The best of MOB 

I was there, and in fact Lileks sits down next to me (a great honor probably deflated by the fact that mine is the easiest name to remember). It was as he says,

The best conversations, as ever, were with the autodidacts, the people who�ve made their own eclectic connections between this and that and the other thing, and keep adding to their storehouse. I can�t imagine what my brain would feel like if I�d gone to grad school, spent half my time trying to screw small wet chunks of literature into the ears of undergrads and the other half researching some misbegotten thesis whose impenetrability was matched only by its utter uselessness in the world beyond. In the real realm it�s different. It�s always amazing to learn what people do for a living, and what they know. Has nothing to do with money or class; it has to do with that fortuitous combination of intellectual hunger, a large supply of tinder that catches fire when two odd things rub together and cast sparks, and a mindset nearly identical to mine in values and fascinations.
Thank God James didn't go to graduate school. Given his early ideological leanings, he might have become another disingenuous Jim Sleeper.

But apparently, according to Mitch, after I left -- which was early due to lack of sleep and muscle relaxants for my back -- the conversation turned to Blondie.

Blondie was to New Wave what Billy Idol (and before that, Generation X) were to punk, or Creed was to grunge; a face and a voice in the right place at the right time; technically the "real thing", but just a bit...too...perfect.

I'm sorry I missed that. My zenith in radio was 1980-81, and Blondie was always 'A' bin material, stuff we had to play for sure at :00 or :30 -- you set your breaks to end 90 seconds before the top of the hour, quickly hit the cart (yes, tape!) for the ID, and release the vinyl just as it feels like it's threatening to slice the finger I needed to go type my grad micro II final, just to hear "duhduhduhduhduh-dMINOR!!!geeefdMINOR!!!efcee", a chord progression I could teach my son in five minutes, and he's a bassist. (So am I, and the bass line is even lamer.)

Actually, the Giorgio Moroder period didn't bother me that much, given by this time my show sounded like I was playing straight out of Gary Numan's tape collection. But this did it.

I never looked at her the same again.

Anyway, sorry I had to leave. I would have had to vent about that album cover, and I don't think it would have been pretty.

We'll have a fine time in the old town tonight 

Students returned to campus on the traditional Labor Day move-in, and the normal amount of revelry and disorderliness ensued. I love this one quote.

Some partiers, such as St. Cloud State student Kirk Pauley, began drinking as
early as 9 a.m.

"Move-in day is kind of like Christmas, you're so excited you can't sleep the night before," Pauley said. "When you wake up in the morning, the present is beer."

Momma Pauley, you done good. (Kirk, btw, has been in one of my classes; he did OK, Momma.)

I'll be busy with student advising, so posting will be sporadic until evening.

UPDATE: A retired faculty member who lives where the partying occurs has a photo gallery. I drove through the area this morning and confirm that it looks like that.

Monday, September 05, 2005

Blogging for Katrina: We be Lutherans edition 

(UPDATED AND PLACED AT TOP: We're continuing this appeal through Labor Day. Posting will occur through the weekend to drive traffic, and appears two posts down. Thankee.)

I have much to write on the economic effects of Katrina -- I'll have some forecasts on a model I've built over the last five years that has an oil price effect -- and if I finish it before the weekend you'll see it below. But before you go there, Hugh Hewitt has been calling for blogging for Katrina, and there's a real need for relief supplies there and people to participate in rescue efforts. We need the same outpouring of people who went to New York to help after 9/11 to go to the Gulf Coast now.

I've chosen to send my visitors who wish to contribute to the ELCA Domestic and International Disaster Response. They are organizing teams of "retired military officials, firefighters and others with search and rescue skills" to go to affected areas and provide the help needed. You can give by check, phone or online -- be sure to designate "Hurricane Katrina" on your check or on the webpage for donations. If you are a member of Thrivent Financial, go here and get a form to get your money matched. (h/t: Ah, Shoot!)

If you prefer to give through a non-religious organization, you can send money as well through the Red Cross. Or look at lists put together by Instapundit or NZBear. If you are a blogger finding this and haven't done so yet, send links to those two and to Hugh.

Please give generously, or, as Hugh says, keep your checkbook near your computer.

UPDATE: Moved to the top, through Sept. 5, as asked by Hugh and Bear.

Technorati tags: flood aid, hurricane katrina

Academics rush to the Katrina Komission 

Academia, even over the long Labor Day weekend and with preparation for their coursework, could not resist hopping on the blame Bush bandwagon. Our faculty announce list, the place where one announces things of general interest to the university that "are unlikely to cause controversy", we've had four posts about Katrina, two of which were outright attacks on the Bush Administration. I have to admire the latest one sent tonight: The sender included an RFP from the NSF for projects that would help deal with the aftermath of Katrina, and then a "call for action" (that is identical to the one here.)

At least one faculty member -- herself a quite-left-of-center type -- has decided actions speak louder than words. The contrast could not be greater.

Give, people!

We'll take students too 

The campus just received this notice from Provost Michael Spitzer:
The concern many of you have expressed this week makes it clear that our entire campus community is eager to help any students whose own universities cannot accommodate them as a result of damage from Hurricane Katrina.

We are announcing today that we are opening our arms to as many as 150 students from those institutions that are now closed indefinitely. These students will be offered spaces in our residence halls and will receive in-state tuition. Our Financial Aid Office is making plans to work with each student on a case-by-case basis.
This is the result of many faculty and campus staff hearing about efforts of other schools to take students in. I heard this mentioned by Glenn Reynolds and NZ Bear on the Hugh Hewitt show last night. I'm delighted we're taking part, and proud to be part of the campus today.

Affected students should contact our financial aid office (320-308-2047) or the admissions office (320-308-2244 or 1-877-654-7278) FMI.

Alums of SCSU reading this: This will cost some money, and we could use your help. Provost Spitzer indicates in his letter that any excess money we receive that isn't needed for these students will be sent on to the relief efforts. Please give.

Names of other schools taking in students are being taken at this site.

UPDATE: The Chronicle of Higher Education has a blog regarding Katrina, and at the top presently (1945 CT) has an announcement from President Scott Cowen of Tulane indicating that the school will not operate this fall. All credits from regionally accredited universities will be accepted in transfer back to Tulane.

Now you've gone too far 

Dear Intelligent Design supporters,

You need to stop people from doing stupid things like this, or else you'll make me agree with PZ (and Lord knows neither of could stand that.) Academic freedom permits the university and its faculty to decide what meets its admissions criteria, as long as it is applied equally.

Butt out.

That is all.

Textbook time again 

The NYTimes is covering textbook costs again. I noted back in July that renting textbooks was becoming more common, and that students were quite sophisticated in their puchasing decisions. Citing the same study we cited then, and this article follows that vein. John Whitehead looks at it from a faculty member's point of view, though, and thinks the rental game is a bad deal. For him.
ASU has a textbook rental system for textbooks are "free." At least this is the answer when you ask students how much their books cost. Then you help them figure out that that the cost is in their fees. Still, a rental system is cheaper than the typical textbook system at most schools. Also, book choices are locked in for three years reducing demand and resale uncertainty. The students love the system.

Which explains why professors hate the rental system and are trying to get rid of it. Actually, professors hate it for two reasons:

  • Book choices are locked in for 3 years, we are lazy, and we don't actually read the book we choose until we teach out of it and find out we hate it. Then we're stuck with the book for two more years.
  • Common textbooks across multiple sections/professors of a course reduces our choice. For example, I have to choose between Mankiw's and somebody else's micro book. I had no choice on the international textbook that I used last year (i.e., academic free, and all that nonsense).
I am surprised by faculty members who change their texts for courses frequently. Macroeconomics being a relatively young field, textbooks do change relatively more often, but microeconomic principles still teaches the same materials it did 25 years ago. Both areas are prone to fad or hot topic areas, and texts veer heavily into and out of each fad. But that's because faculty get caught up in the fads and want the textbook with the hot topic.

I will join Whitehead in my distaste for common textbook adoptions ... but this was happening well before the advent of renting texts.

Wal-Mart and Katrina 

I hadn't seen this before, but it's worth noting here as well.
For the Katrina Fund established by former Presidents Bush and Clinton, Wal-Mart committed $15 million in cash assistance. Thus far, Wal-Mart has contributed $17 million in cash donations to relief efforts.

Separately, the Walton Family Foundation is providing $8 million to the Bush-Clinton Katrina Fund. The Walton Family Foundation has provided an additional $7 million to help organizations such as The Salvation Army, America's Second Harvest, and Foundation for the Mid-South.

Notes Walter Block of Loyola of New Orleans (who's had to relocate to Vancouver):
As part of this commitment, Wal-Mart will �establish mini-Wal-Mart stores in areas impacted by the hurricane. Items such as clothing, diapers, baby wipes, food, formula, toothbrushes, bedding and water will be given out free of charge to those with a demonstrated need.�
Block's entire piece is worth reading for a negative view of government assistance at this time, even while he's in exile. Much more at WalMart watchblog, Always Low Prices.

Why we grade output rather than input 

Efforts by Hollywood actor Sean Penn to aid New Orleans victims stranded by Hurricane Katrina foundered badly yesterday, when the boat he was piloting to launch a rescue attempt sprang a leak.

Penn had planned to rescue children waylaid by Katrina's flood waters, but apparently forgot to plug a hole in the bottom of the vessel, which began taking water within seconds of its launch.
I'd like to give him some credit for trying to help. Really I would. But,
With the boat loaded with members of Penn's entourage, including a personal photographer, one bystander taunted the actor: "How are you going to get any people in that thing?"
Source. Emphasis mine. (h/t: Reader pg)

Saturday, September 03, 2005

Today "gouging", tomorrow "rent control" 

The Eclectic Econoclast wonders if agitation for rent control could be coming in Katrina's wake.
I was interested in the impact that this massive flood of refugees will have on short-term housing prices throughout the southern US. The refugees will not be able to return to their homes for months, if ever. Many of them will find their homes destroyed or impossible to salvage. They will have to find alternative housing, and it cannot be at The Astrodome forever.
I mentioned yesterday that there doesn't appear to have been a housing shortage after the 1906 SF earthquake. Rick Brady, a city planner who's worked with FEMA on disaster housing criteria -- and whose scenario was a Category V hurricane in New Orleans -- works through how FEMA would look at the housing crisis John discusses. It will strike you as triage, but it has a market component.
FEMA should already have people surveying rental housing markets in surrounding unaffected areas and placing deposits vacant apartment and home units. As units are held for victims, these data should be loaded into the GIS and an inventory compiled. The database should also include information on citizens who have expressed a willingness to share their home for some period.
Rick makes a convincing point that temporary encampments -- sure to be called "refugee camps" in the media -- will be unavoidable. And then he poses the greatest challenge:
How many mobile homes and structures are currently available? How much treated lumber will be required? Aggregate for concrete? Glass for windows? Roofing materials? How much labor will be required to rebuild the devastated areas? How many engineers and inspectors will be required to review and approve all the redevelopment applications? The government cannot simply allow a �free for all� by developers.
The last sentence, frankly, must be wrong. Why can developers and evacuees/residents not simply come to a bargain? Gouging! you say. There would only be gouging if there were only a few bidders to build new homes or if there is collusion. By allowing the market to work, though, developers would compete against other developers to gain the relief dollars and insurance of the homeless. That much money in the hands of people who want new homes would, in a free market, sound the clarion for all kinds of developers to set up offices in the affected areas and begin advertising for business.

The alternative, to have the government prevent a "free for all", is an invitation for the same kind of graft and regulatory nightmare that has hampered Louisiana's development for the last 75 years. (Read the post just below for why.) If you want to rebuild it, and fast, you should let individuals negotiate with each other through a competitive process.

UPDATE: Think anyone from FEMA is monitoring Craig's List for temp housing? (Thanks, John!)

Why keep New Orleans? 

The boys on NARN discussed with Rep. Mark Kennedy the notion that perhaps we should not rebuild New Orleans after Hurricane Katrina. It sits below sea level and prone to flooding, and we cannot afford to keep rebuilding it, the story goes. (Greg Ransom has a roundup.)

Ari Kelman writes that the purpose of New Orleans has always been business.
In 1718, when the French first settled New Orleans, the city's earliest European inhabitants saw riches inscribed by the hand of God into the landscape of the vast Mississippi valley. The Mississippi river system takes the shape of a huge funnel, covering nearly two-thirds of the United States from the Alleghenies to the Rockies. The funnel's spout lies at the river's outlet at the Gulf of Mexico, less than 100 miles downstream from New Orleans. In an era before railways, good highways, and long before air travel, much of the interior of the nation's commerce flowed along the Mississippi, fronting New Orleans. The river system's inexorable downstream current swept cotton, grain, sugar, and an array of other commodities to New Orleans' door. Because of the region's geography and topography, many 19th-century observers believed that God�working through nature, His favorite medium�would see to it that anyone shrewd enough to build and live in New Orleans would be made rich.
Adam Smith in the Wealth of Nations points out how important navigable waterways are as well.
As by means of water-carriage a more extensive market is opened to every sort of industry than what land-carriage alone can afford it, so it is upon sea-coast, and along the banks of navigable rivers, that industry of every kind naturally begins to subdivide and improve itself, and it is frequently not till a long time after that those improvements extend themselves to the inland part of the country. (p. 25)
The quote appears at the start of a paper by Jeffrey Sachs and Steven Radelet in 1998 on the advantages countries have when they have access to navigable rivers.
The basic conclusion of this analysis is that geographic isolation and higher shipping costs may make it much more difficult if not impossible for relatively isolated developing countries to succeed in promoting manufactured exports. Firms from such countries will likely have to pay lower wages to workers and accept smaller returns on capital to compensate for higher shipping costs. For some production processes with a high import content and small profit margins, such as electronics, high shipping costs can essentially eliminate more remote countries from international competition.
That certainly applied to New Orleans of the 18th century, but does it continue to apply in the 21st? Does a post-industrial economy require port access still? I think that has to be answered positively. You could look at input-output tables and see that even for our economy today manufactured goods and transportation services have an impact on each other sector of the economy. And add to this the fact that a whole architecture of fossil fuel delivery centers on the place, and you can see that people will move there for business regardless.

But there should be some thought given to what policymakers can do to enhance and speed up the process. Hugh Hewitt is proposing sweeping tax breaks for the area, including a $500 tax credit for tourists who go visit the area. That last idea sounds bad to me: This just pushes up prices even further in an area where vacations are going to be expensive for awhile (there are fewer tourist spots to visit now, alas) and make Bourbon Street unaffordable to the middle class tourists it has always catered to. And enterprise zones generally have mixed results (cf. this legislative analysis from Minnesota, or this Mackinac study on "renaissance zones" in Michigan). The short of it is: Cities get built and rebuilt because it's profitable individually for people to (re)build there. Tax preference zones are most often not the deciding factor in an investment and tend therefore to waste a good deal of money that might be better put towards, say, better levees.

The thing that will make New Orleans most vibrant would be for Mayor Ray Nagin to fulfill the promise of cleaning out the corruption for which his city is notorious. Fred Smith of the Competitive Enterprise Institute -- a Louisiana native -- tells of the state's longtime status as a regulatory welfare state.
Louisiana and New Orleans were at one time prosperous�the leading communities in the South. Louisiana�s natural advantages made it a major port and that role stimulated the growth of regional banking and other financial services. Oil and other natural resources were plentiful, and, of course, tourism and hunting and fishing were added assets. As a result, Louisiana prospered for some time, even though its politics and its policies were increasingly destructive.

However, over the past 50 years, industries have sought to shift their operations to more favorable climes. Houston became the nation�s oil capital and grew far more rapidly. Indeed, Houston is now sheltering refugees from New Orleans. Atlanta became the South�s commercial capital and Charlotte its financial capital. Even Louisiana�s natural advantages faded as shipping firms�finding corruption rampant�sought to move their goods through other ports wherever possible. Populist policies have consequences: A politicized economy becomes too often a corrupt one. Louisianians sometimes joke: �We�re a state that does not tolerate corruption; we insist on it!� Amusing, but tragically true.
The goal should be to build a new New Orleans, not rebuild the old one.

Friday, September 02, 2005

Weekend update 

NARN at the Fair again this weekend. We're on both Saturday and Sunday, 12-3, at the Patriot booth on Judson Ave, across from the Horticulture Building and nearby the International Food court. It's shady and usually quite pleasant there, unless you have to watch Chumley eat. There will be another eating contest tomorrow; I don't believe there's one on Sunday, but there's a music contest instead that should be a howler. (And Chad will be the one howling.)

I've been battling a muscle spasm in my neck and left shoulder for two days and I'm not inclined to get in the car to drive. $3.12 gas is a deterrent too. If it loosens up by Sunday I'll probably come to the Fair and then to the MOB gathering at Town Hall Brewery in Minneapolis at 5pm, but if it feels like it did this morning that just isn't in the cards. There will be blogging here tomorrow and Monday, so please stop back.

Listen to new music and give 

I buy lots of new music, and a service I use to find new music is CDBaby. CDBaby uses the web and its own distribution facility to allow thousands of independent bands, who have access to recording technology I could only dream of when I played in the 1970s, to direct market their music to listeners. I've found much good alt and chillout on their site, along with Gor Mkhtarian, a fabulous Armenian guitarist who used the site to help launch his own label. Their service is good; I'm sure I've bought a few hundred bucks of stuff.

Anyway, the service has arranged for many of the artists selling through this site to donate proceeds of their CDs to the Red Cross for hurricane relief. It's a great opportunity to listen to new artists -- they provide two minute clips, much better than an Amazon or Tower -- read about them, and pick up some new beats. All the music linked on this page is eligible. After one more post, I'm spending the rest of the night there.

Combining the best of two education systems 

Richard Vedder makes some interesting points on how public school systems could learn from private and public universities. More university students go to private schools than do K-12 students. And we regularly teach classes much larger than those in a public school system.
Moreover, even public universities are far more independent of the political process than K-12 schools. Public universities have greater ability to hire and fire staff, pay people on the basis of merit, change curricula, and face far less interference from obstructionist labor unions.
Well, Vedder hasn't been to SCSU, or else he'd at least pause before typing that last point. But the point he's getting at is accountability, and putting pain to the decision of parents to ignore what's happening in their schools.
[U]niversities are far more subject to the discipline of the market, meaning they face financial consequences for displeasing students or parents. Nearly every American college student has to pay tuition covering a significant percentage of the cost. If colleges fail to serve the students well, they may lose tuition revenues or fall in rankings issued by organizations. Top spots in the US News & World Report list are particularly coveted.

By contrast, very few public schools charge anything for attendance. Because parents "pay" for schools only indirectly through property taxes, they demand expensive but inefficient features like small classes. While classes of over 30 are rare for high school seniors, many college kids learn quite well a year later as college freshman in lectures of 200 -- and the parents rarely complain because they are now paying the bill.
So could states and municipalities change the system by capping per-pupil aid and allowing public schools to charge tuition -- roughly what is done for financing public higher education? Yes, Vedder says, but with caveats:
A move toward the college model for K-12 schools should avoid the morass of government student loan programs that have contributed to the tuition rise. Moreover, accountability at many colleges is limited, allowing administrators to waste resources on pet projects that would not be approved by customers if spending were more transparent.
Perhaps by putting teeth into the school's PTA -- which would become a board of trustees with parents on it -- and by not allowing a loan program that incentivizes tuition inflation, perhaps efficiencies can be gained.

At the same time, schools might be able to learn something from how faculty are evaluated. Currently, most testing programs test the quality of schools, not teachers, yet there is a substantial degree of within-school variability in student test scores. We would never do this in a university. Aggregating testing and determining achievement and pay, as a recent NBER study points out, "weakens the incentives for good teachers to enter and remain in teaching, for ineffective teachers to leave, and for all teachers to put forth greater effort." (Thanks to Jim for catching my omission of the italicized word.)

Let's hope that was a slip 

Count me among the multitudes that hopes President Bush misspoke when he said this.

"I think there ought to be zero tolerance of people breaking the law during an emergency such as this, whether it be looting, or price-gouging at the gasoline pump or taking advantage or charitable giving, or insurance fraud," Bush said in an interview on ABC's "Good Morning America."
What does one mean by price-gouging? I'm probably not Ed Lotterman's biggest fan ("probably" only because I have not done scientific polling on the question), but in one of his better columns he shows all the ways people misuse the term.

While we may not like it when a particular set of sellers charge what we think is a high price for a product we want, requiring government approval of a fair price for any particular transaction opens up a Pandora�s box of complications. Price controls lead to wasted resources and even greater unfairness than the market.
And Mark Kleiman, writing on Bush's comment, finds his way to the right conclusion as well.
The natural result of that situation is that the price of gasoline goes up. In the short run, that doesn't result in any additional supply, but it does reduce the quantity demanded, allowing the market to clear. Unfortunately, the short-run price-elasticity of demand for gasoline is low, so even a modest-sized supply crunch will naturally cause big price increases.

In economics, this is called "market clearing." In politics, it's called "price gouging." Of course, it's possible by law to keep prices below their market-clearing levels. In politics and law, that's called "price control."

In economics, the result of that policy is called "shortage." At any price below the market-clearing level, buyers will want to buy more gasoline than sellers have to sell. The result is either waiting in line, which is a very inefficient means of rationing compared to letting the price rise, or some sort of legal rationing system.

If you go back to my notes from my introductory class early this summer, you'll note I said all scarce goods get rationed somehow ("scarce good" meaning you must sacrifice some other action to obtain it. Remember, things don't have a cost; actions do.) The price gouging charge, as Lotterman and Kleiman point out, is a claim that in a situation of a negative shock to the supply of a good, price no longer is the best method for dealing with (increasing) scarcity.

That begs two questions: What's wrong with price, and what would be better? And what would be the mechanism that determines when we switch away from the normal use of price in our market economy?
What do prices do? They not only allow sellers to recover their costs, they force buyers to restrict how much they demand. More generally, prices cause goods and the resources that produce goods to flow in one direction through the economy rather than in a different direction.
Or consider this example of recovery from the 1906 earthquake in San Francisco, from his
Basic Economics.
When the San Francisco Chronicle resumed publicatioin a month after the earthquake, its first issue contained 64 advertisements of apartments or homes to rent, compared to only 5 ads from people seeking apartments to live in. Of the 200,000 people suddenly made homeless by the earthquake, temporary
shelters housed 30,000 and an estimated 75,000 left the city. Still, that left nearly 100,000 people to be absorbed into the local housing market. Yet neither the newspapers nor onther documents of that time mention any housing shortages, such as lengthy searches or bribes paid to landlords. Rising prices not only allocated the existing housing shortage, the provided incentives for rebuilding. (p. 31, from first edition)
So too with gasoline. Someone at my breakfast group this morning said that he had talked to a gas station owner yesterday and was told no gas came to us from Louisiana but from Canada. Another said it did come from Louisiana. I said, that doesn't matter. If supply is plentiful here but short elsewhere, prices will encourage distributors to send it to the places where gas is dear and not to where gas is cheap. Particularly since the EPA suspended clear air rules that turned the gas market into a series of islands with gas usable in one place but not another, the law of one price reigns. And David Brown points out,
If we expect customers to be able to get what they need in an emergency, when demand zooms vendors must be allowed and encouraged to increase their prices.
Supplies are then more likely to be sustained, and the people who most urgently need a particular good will more likely be able to get it. That is especially important during an emergency. Price gouging saves lives.
What other allocation system will provide for this result?
Thus legislators and presidents who want to view some prices as unconscionable may be doing greater harm than good, in diverting resources away from the places they are demanded most. Walter Williams makes this point discussing a Virginia anti-gouging law passed after the first of the big hurricanes of last year.
The Virginia Senate has provided a defense for sellers against charges of selling goods at an "unconscionable" price, saying, "Proof that the supplier incurred such additional costs during the time of disaster shall be prima facie evidence that the price increase was not unconscionable." That vision reflects gross economic ignorance on the part of the Senate. Costs alone do not determine price; demand plays a role as well. When there's a disaster, demand is likely to be the major element driving prices up.
And this is important: price is not determined by cost, but by the interaction of supply and demand. Let's hope that President Bush was just having an early-morning sleepy moment and that wiser heads prevail. Prices will allocate needed supplies for hurricane relief better than any government agency.
UPDATE: Would cutting gas taxes help? No, as James Hamilton explains. It's only obvious after you read it.
UPDATE 2: William Polley points out this post from Russell Roberts. It's harder to use the cool logic of economics when one's emotional about what's happening in New Orleans, but cooler heads will give us better policy.

Thursday, September 01, 2005

Putting my mouth where my money ain't 

The StarTribune finally picks up the local angle of a story covered by Scott Johnson over the weekend.
Most University of Minnesota law professors who contributed to political campaigns in recent years gave to Democrats, according to a new study, but some teachers doubted Wednesday whether that influences what is taught in the classroom.

...U of M law professors reacted Wednesday to the study, conducted by the Georgetown University Law Journal and reported last weekend by the New York Times. It analyzed 11 years of federal campaign contributions by professors at 21 top law schools. It found that on average nearly one-third of the professors at the schools contributed to campaigns, and 81 percent of those contributors gave wholly or mostly to Democrats.

The U of M ranked eighth out of 18 law schools where 15 percent or more of the professors made contributions of some kind. Of those U of M professors who contributed, 85 percent gave mostly or exclusively to Democrats.
But would this come at all into play in the classroom? Most assuredly not! say the faculty.
"While I think law school has an effect on people, I don't think it necessarily changes a lot of their values and viewpoints that they came in with," said Beverly Balos, a clinical professor at the Law School who gave hundreds of dollars to the Paul Wellstone campaign. "Law students are coming into law school already adults."

Prof. Fred Morrison, who teaches constitutional law, has given hundreds of dollars to the state House Republican campaign committee.

"Probably there are more liberals than conservatives, but it isn't numbers so much as the representation of the point of view," Morrison said of the university faculty. "And we certainly have some people with a relatively conservative point of view and who are really quite outspoken."
Interesting that they find 85% of the faculty give to Democrats, yet they give more ink to the one guy who gives to Republicans and plays down the distinction.

Sometimes the marginal rate of technical substitution is zero 

Reader jw sent this story from the Chronicle of Higher Education, discussing the US Naval Academy's attitude towards underachieving students. Says one of its faculty, the school's collective head is in the sand on learning problems.
At the U.S. Naval Academy, as I discovered by serving a year as a faculty member on the admissions board, we go out of our way to take in a surprising number of weak students in preference to stronger ones in the pursuit of our various ideological hobbyhorses: affirmative action for sports, selected racial minorities, and blatantly pro-military activities in high school. The academy also seems to be ideologically committed to the power of the individual to overcome all odds. In the academy's conservative, military mind-set, everything is a "choice," and motivation alone decides whether you succeed or fail. The only reason the Naval Academy can accept to explain why a student is failing is that he or she isn't trying hard enough. Any other factors are irrelevant, and in any case are ruled out of court. The academy just doesn't want to hear about them.
Professor Bruce Fleming, who teaches English at the school, talks about students who pass because they get lots of extra instruction from readily available faculty.

There are two potential problems with the Naval Academy's reasoning. First, Fleming points out that lesser talent can always be offset by greater effort. That's not always true, he says. This reminded my reader of the point Charles Murray raises in group differences in intelligence. Even if you find them statistically, critics suggest, you can offset those inherent disadvantages by making allowances on the other side. This is couched in terms of "cultural competence" or "global understanding", but what it often comes down to is either creating separate scales for each group or devoting much more attention to the disadvantaged group. Setting aside the question of fairness, the fact may be that you can't make the substitution. In Prof. Fleming's story, he gets the learning-challenged student through the class by adding scads of his own extra instruction, getting the student to memorize. But no actual learning has occured; the student graduating becomes an officer in the Navy who can't rely on memorization in the heat of battle or when an emergency occurs, say, on a submarine. We can change the rules of college football to help the 175# player, but this will accord him no advantage in the pros. We can add tutorial after tutorial for inner-city students who have perhaps a combination of group and environmental disadvantages, but we cannot pass on the ability needed to perform opera, brain surgery, or flying an airplane.

The other is that many of the students I see with learning disabilities are often treatable. I'm at a state university, not a service academy, so I feel a greater need to provide for the students that Prof. Fleming's administrators pretend don't exist because I think the public wants that. But there's nothing worse for these students than an undiagnosed physical explanation for poor learning. Faculty have difficulty dealing with angry students, but good faculty can pick out the ones who are angry out of frustration with their own problems from the ones who are angry someone told them they stink (either due to lack of motivation or lack of talent.) I have some cases of students with these disabilities who have gone on to be quite successful -- and you'd probably find those stories with a majority of the faculty here.

The point is, education is a retail venture, and usually involves customization. Thinking everyone's problem is a lack of motivation makes no more sense than thinking everyone can draw that fawn on the back of the matchbook just as well as the next guy.

I want to buy my own paper 

A graduate student finds that a paper she wrote appears on three term-paper websites, and is suing. What is weird is her school's reaction:
Ms. Macellari contends that she owns the paper. She further states that she never gave the sites permission to publish the paper (on South Africa, written when she was a junior year abroad student at Mount Holyoke College), and that she never had any communication with the company or Mr. Carroll.

Her attorney does state that she did post the paper to a university Web site briefly as part of her course work. Although that fact does not resolve the issues in this case, it does serve as a reminder (as the chief information officer for Mount Holyoke College is quoted in the Chronicle) that �professors should not require students to post papers to the Internet, unless they do so using password-protected areas of a college�s Web site.�
Why do faculty encourage publication of their students' work? One reason could be to get feedback on the work from people off campus as well as on campus. Putting the information in a password-protected web means it is only to be shared with other students in the classroom; there is no reason why that's the best pedagogy for teaching, say, research methods or a research seminar. Maybe Mt. Holyoke is trying to deflect criticism; I don't see how they could have prevented online theft. But what then to do except have faculty be more vigilant in accepting papers that may have been bought?

I have faith that technology will solve this problem.

And the score is Jimmy 3 effenheimers, Johnny 2 

As one thinks about looting and broken windows in the Gulf after Katrina, this sort of story seems really silly. But it shows more of continued degradation of discipline in our schools. From England, a story of a school where youcan use the f-word in class (but only five times).
A running tally of how many times the f-word has been used will be kept on the board. If a class goes over the limit, they will be 'spoken' to at the end of the lesson.

The astonishing policy, which the school says will improve the behaviour of pupils, was condemned by parents' groups and MPs yesterday. They warned it would backfire.

Parents were advised of the plan, which comes into effect when term starts next week, in a letter from the Weavers School in Wellingborough, Northamptonshire.

..."Within each lesson the teacher will initially tolerate (although not condone) the use of the f-word (or derivatives) five times and these will be tallied on the board so all students can see the running score," he wrote in the letter.
Think of the many number of times on our campus that someone says something insensitive about a protected class, and the persecution that goes after them. Yet we should tolerate teen boys who can't figure out that the mother of all cursewords should be held in abeyance in a high school classroom?

Via John Ray.