There is continued carping from some quarters that Fed chairman nominee Ben Bernanke is an inflation dove. But a WSJ article by Greg Ip (subscribers only, but standby for some quotes) does a nice job of adding some nuance to what has been said. Here are the key grafs with my commentary.

In the 1960s and 1970s, many central bankers thought inflation did little harm and that reducing it was unacceptably painful. That breed of dove is now almost extinct. Today's hawks and doves are distinguished not by their philosophy, but by their forecast. Both believe in the wisdom of keeping inflation low. Doves are more confident it will stay there without wrenching increases in interest rates.

Judging by his public comments, Mr. Bernanke is an old-fashioned hawk but a modern dove. He expects inflation to remain low and, if that forecast proves correct, he probably will keep rates down. If that forecast proves wrong, he will raise them as far and as fast as Mr. Greenspan would have, and perhaps further.

As I pointed out last week, inflation targeting is really inflation forecast targeting. The confusion, I think, stems from one of its more famous expressions, in the rule that operates the Reserve Bank of New Zealand, to wit: if the inflation rate over some period is above 2% on an annual basis, the governor of RBNZ is sacked. That is NOT inflation targeting as Bernanke describes it. That is to say, the RBNZ could operate monetary policy using something other than an inflation target, and as long as the inflation rate stayed below 2% nothing would happen. The 2% limit isn't a target, it's a constraint.

Mr. Bernanke long has advocated setting inflation targets as a way of institutionalizing Mr. Volcker's and Mr. Greenspan's conquest of inflation. A target, he has said, would hold the central bank accountable. Over time, it would make the public more willing to believe low inflation will last, and that will make it easier for the Fed to cut rates when the economy softens without fueling inflation in the process.

He also has argued that inflation targets can prevent Japanese-style deflation. Maintaining "price stability," the mantra of modern central bankers, means being both an inflation hawk and deflation hawk, in the old sense of the term.

So, if inflation were to rise in a particular month because, say, a storm wiped out a significant part of the oil refining capacity of the Gulf Coast, and prices rose, the Fed would have to say what it views those events to mean for inflation six to nine months from now, and to act if the forecast was for higher inflation, and NOT to act if it did not. (This will come as no comfort to those who think inflation has not been at all tamed -- I will deal with those later when I answer a reader's question, "why not a zero target?")

As Mr. Bush's economist, Mr. Bernanke has predicted inflation will stay low. However, that is often the refrain of White House officials, who are supposed to sound optimistic. It isn't clear if he will have the same view at the Fed. After all, in recent months even previously dovish Fed officials have ratcheted up their anti-inflation rhetoric. One of them, San Francisco Federal Reserve Bank President Janet Yellen, recently suggested rates have to go higher than she previously believed to reach neutral.

I think that point is vital -- we cannot assume we know Bernanke's forecast for inflation. And, following with the statements about what Supreme Court justices should and shouldn't say in confirmation hearings, here's one vote that Bernanke not offer a forecast for inflation in his confirmation hearings.

In principle, Mr. Bernanke favors pre-emption. "Policy makers achieve better results when they act in advance to forestall developing problems," he said in 2004. Mr. Sack wonders, will Mr. Bernanke "err on the side of restraint, considering that the transition to a new chairman might make the Fed's credibility more fragile?" Both Mr. Greenspan and Mr. Volcker raised rates after taking office.

I would bet that Mr. Bernanke follows suit. If you're still in the market for a loan or mortgage, you might not have much longer to act.

A student government initiative to support a resolution opposing a definition-of-marriage amendment was voted down by student government after substantial opposition arose in hearings.

The resolution was voted down at Thursday's meeting, with six senators
voting yes, seven voting no and seven abstaining from the vote.

The resolution, Campus Affairs 001, states that the SCSU Student Government Association is a representative body for all students.

This is the statement that caused many to question the passing of the resolution.

Justin Braulick and Nicole Severson were two students that voiced their opinions during open gallery, concerned that if the resolution were to pass, not all students on campus may agree.

"There's no way that you can be representing all students," Severson said. "There's quite a number of students on campus who would like to see marriage defined as one woman and one man."

Severson, along with criminal justice professor Dick Andzenge, wrote an alternative resolution.

She distributed the proposal to members of student government as a means of showing her disapproval of CA 001.

The alternative resolution states: "We oppose the leaders of the association endorsing or opposing political legislative action that does not have any direct bearing on our position in society as students."

I think that makes the point quite well: What is a student government elected to do? Its main function has been to deliberate what is to be done with student activity fees, a function it has had some trouble with in the past. As I asked last spring, cui custodiet custodiens? But the issue here isn't even about money and thus even more divorced from the delegated powers of the student body.

The student government contemplated holding back this resolution pending a referendum. That strikes me as wrong, as it does for student writer Chris Wolf:

I understand that the intention of the resolution is to fight oppression, but taking a stand on such a sensitive issue is bound to oppress somebody.

That statement stands regardless of a referendum, and regardless of the issue at hand. Congratulations to the seven senators with the courage to stand up for the right of conscience for their fellow students.

Or thoughts while shaving (which reminds me, I'm still thinking about this razor):

• if he's really known as Scalito, I'm down with Sam. A libertarian-tinged justice is the guy for me; in fact, I'll have nine of those with a side of fries. And unless there's another public choice seminar, that's the last you'll hear from me on the topic. I'm an economist, so who cares what I think?
• if I get off another week as good as these picks, I may have to set up a one of those 1-900 numbers. Particularly if Pittsburgh covers tonight -- and the line moving to -12 is good news. And in not-news, Flash and Foot were both 1-2 yesterday. BTW, I bet my first football game Saturday; thank you Buckeyes! Hugh, be sure to crow just a little.
• I have a new favorite person to watch football with: Littlest Scholar. We had a nice seat at Granite City yesterday. (Big ups for former student Travis and to the manager there for getting us a great table. The brunch, by the way, is awesome.) Her voice shouting at the Viking game was the funniest thing I have heard in years. Sidenote: If you are the dude who went to brunch and brought his laptop to watch your fantasy team's stats while you ate with who appeared to be your wife, please contact me. I want you in my league, and I need spousal training tips.
• the headline of the local paper today is "Senator Says Rove Should Resign". Not just an article -- the 32-font headline of the paper. No, no liberal bias in the not-ready-for-prime-time-media. I mean, really, Harry Reid wants Rove to quit? No kidding? That's news? Note to editorial staff at Times: The ghostbusters story was better.
• "...the CIA couldn't find its own weenie with both hands and a flashlight..." Score one for Mr. Indeed.

Give a moment and your prayers to Captain Ed's first mate, who is returning to hospital this weekend.

Today's report has third quarter GDP up 3.8% versus 3.3% in the second quarter. Kash, Tufte and Polley all pronounce the data good. There seems to be some surprise that the hurricanes on the Gulf Coast didn't show more of an effect. They do, though, in the personal income data:

Current-dollar personal income increased $71.8 billion (2.8 percent) in the third quarter, compared with an increase of $147.8 billion (6.0 percent) in the second. The slowdown in personal income partlyreflected the impacts of Hurricanes Katrina and Rita. Rental income and proprietors' income werereduced by the property damage caused by the hurricanes, and current transfer receipts were increasedby insurance settlements related to the hurricanes.

Remember, as the BEA points out, that destruction of existing capital does not have an immediate impact on GDP, since GDP counts only present production. We nevertheless feel poorer, and we can thus expect reinvestment, additional savings and work, and probably less consumption. A neoclassical view, therefore, would suggest perhaps a pickup in production over the next six months or so.

As promised Wednesday, I am creating a sidebar on the Footflash Football Follies, particularly with Flash busily thanking the special prosecutor for his single Hot Wheel. Vincent is invited to join in the festivities.

Bankroll $1000. Betting $11 to win $10 on each game. Lines via Sportsbook. Only playing spreads here. If you're stupid enough to actually put money based on what I wrote, please send email at sellmeswampland@scsuscholars.com

How bad are the Ravens? Bad enough to get this question-and-answer with Baltimore coach Brian Billick and the Pittsburgh press:

Have you thought at all about giving Kordell (Stewart) a shot?

No, we are anxious to get Kyle Boller back.

I think I broke a rib laughing. Let's have some of that. $55 on the Steelers, -10 on Monday night versus Baltimore.

Next, calling out LF on his pick of the Arizona-Dallas game. In case he hasn't noticed, which apparently he hasn't, Drew Bledsoe has put up OK numbers with fellow former Patriot Terry Glenn. Dallas at home is a very difficult team to beat, and I see the Cardinals laying a big egg without Kurt Warner yet back. $44 on the Cowboys, -9 versus the Cardinals.

We'll go lightly on the third game. Cincinnati, after being the trendy pick the first six weeks, gets dope-slapped to reality by the Steelers last week. They're home this weekend again agains the lowly Packers, before they go next week to Baltimore and then the bye. This could be a game they overlook, and they may feel a little underconfident. They've mostly won by getting massive turnovers from weak teams like ... the Vikings. I have a feeling this is the week Favre bears down and doesn't throw interceptions. I'm not saying the Packers win this name, but we'll put $22 on the Packers +9 at the Bengals.

Total wagered: $121. Left in bankroll: $879.

Because handsome men have edge in election wins:

Handsome male candidates had a 56 percent chance of winning an election while their less dashing counterparts had a 44 percent chance, according Daniel Hamermesh, the study's author and an economics professor at the University of Texas.

Hamermesh studied the election of officers for the American Economic Association, a professional group, from 1996 through 2004.

However, he would be the most handsome economist. Here's his competition.

Enrollment at many schools, including SCSU, has been down this year, and the biggest explanation you hear from admissions and enrollment officials is demographics. Yet we continue to hear about rising tuitions, and Congressional action to control runaway college costs.

At least until one state university system has changed direction.

The South Dakota Board of Regents announced last week that, starting next fall, it was slashing tuition for all new out-of-state students by slightly more than half. The change affects prospective students mostly in the eastern half of the United States, since those from neighboring and western states have been paying the lower rate for several years.

The reason for the change is demographics. Like many Plains states, South Dakota faces a dwindling number of children and, thus, high school graduates.

A committee charged with surveying high school enrollment recently told the state's Board of Regents that high school graduation enrollments could drop by as much as 13 percent over the next decade. That, in turn, could reduce the number of South Dakotans entering the state's universities and other post-secondary institutions, which currently have 31,000 students enrolled.

Many public universities, alas, are addicted to tuition dollars. State aid to public higher ed in Minnesota has fallen in percentage terms, so that at SCSU less than half of our budget comes from state appropriations. Yet if the university wants to retain its status as the largest MnSCU school, it may be well advised to look into holding tuition increases below, say, that of the second largest school, whose enrollment is gaining on ours.

Economics question of the day: Could students have elastic demand, so that a cut in tuition rates may increase our budget?

A few years ago, as I was driving toward downtown Chicago from the SOUTHSIDE as I approach 35th Street I noticed a billboard advertisement for the Southtown Newspaper (formerly called the Southtown Economist Newspaper). The headline was:

Sox Win!
Cubs Lose!
Another Great Day in Chicago!

Enough said. I will enjoy the first (and privately gloat about the utter failure of the latter).

On behalf of the other Sox redeemed, congratulations to the White Sox.

UPDATE: Brother Palmer reminds me that during the World Series podcast last week he was the only one who picked the White Sox. Phil and I both said Astros in six.

UPDATE 2: Stephen's happy there's no Bartman in Houston. Let me just say that if Uribe had done this in Fenway, somebody'd've gone Gamboa on his ass.

I was going to write something else about Miers and public choice, but today's withdrawal moots that thought. As Kash an Orin Kerr note, it appears that the Bush team took the Krauthammer option, to wit:

It is clear that Senators would not be satisfied until they gained access to internal documents concerning advice provided during her tenure at the White House - disclosures that would undermine a President's ability to receive candid counsel.

Not everyone gets a do-over, Mr. President, and damned few of us get two.

An advertisement on our email list this PM from a HURL department member:

Not One More Death, Not One More Dollar
College of St Benedict Flagpole, St Joseph MN
Wednesday, October 26th, 9:00 PM

A coalition of campus organizations are sponsoring a candlelight vigil at 9p.m. on Wednesday, October 26 at the CSB flagpole. We will gather to mark the heartbreaking milestone of the 2000th U.S. soldier's death and to call attention to the appalling human and economic costs of the war in Iraq and to call for immediate withdrawal of U.S. military forces.

For three points: What will be run up the flagpole?

a. the new Iraqi constitution?
b. the Sunni electoral slate for December?
c. the Mehlis report?
d. the white flag?

There will be one more death, even if we spend no more dollars. It just will be more Iraqis and fewer Americans, and this seems to be the wish of this faculty member who sends it, from the Department of the 3.7 GPA.

For this:

President Johnson's famous Howard University speech, which launched the Great Society in 1965, outlined this balance of power by explicitly spelling out white responsibility without a single reference to black responsibility. In the 40 years since that speech no American president has dared correct this oversight.

The problem here is obvious: The black shame of inferiority (the result of oppression, not genetics) cannot be overcome with anything less than a heroic assumption of responsibility on the part of black Americans. In fact, true equality--an actual parity of wealth and ability between the races--is now largely a black responsibility. This may not be fair, but historical fairness--of the sort that resolves history's injustices--is an idealism that now plagues black America by making black responsibility seem an injustice.

And yet, despite the fact that greater responsibility is the only transforming power that can take blacks to true equality, this is an idea that deeply threatens the 40-year balance of power between the races. Bill Cosby's recent demand that poor blacks hold up "their end of the bargain" and do a better job of raising their children was explosive because it threatened this balance. Mr. Cosby not only implied that black responsibility was the great transforming power; he also implied that there was a limit to what white responsibility could do. He said, in effect, that white responsibility cannot overcome black inferiority. This is a truth so obvious as to be mundane. Yet whites won't say it in the interest of their redemption and blacks won't say it in the interest of historical justice. It is left to hurricanes to make such
statements.

RTWT.

Two positive things, in fact:

• Viktor Yushchenko scored an important victory in reselling the Kryvorizhstal steel plant. The first sale of this plant was at the heart of the debate over corruption in the previous government of Leonid Kuchma. Yushchenko showed some political acumen by getting the auction onto television across the country; that it earned six times the price Kuchma sold it to his cronies solidifies Yushchenko's case that the times are changing. He's after the national telecom next, and this is making the old oligarchs very uncomfortable. Remember that Yushchenko loses some power after the parliamentary elections next March, so this may be a sign that he's finally realized he's under the gun. In the case of Ukrtelekom, privatization has only been debated for the last ten years.
  
  UPDATE: Worth noting is this report from Adrian Karatnycky in the WSJ Europe (subscriber link), indicating that Yulya Tymoshenko appears ready to throw back in with Yushchenko in a parliamentary coalition for the March elections. Had she done what Yushchenko has done with Kryvorizhstal, she'd probably still be prime minister. But the power struggle that lead to her dismissal may take a new turn. Developing...
• Yushchenko will get a boost from the U.S., but not necessarily from the government. PBS' Frontline is running a story, A Murder in Kyiv, about the Gongadze case. I highly recommend this website, and look forward to the airing of the show next Tuesday night. Perhaps it will help with a recently launched probe into Kuchma's role in Gongadze's murder.

Even though Flash appears hopelessly behind, I suppose we'd best continue with this event. You never know when the worm might turn. And regarding my observation Monday that Learned the Greek needs to step up to the big leagues and bet against me, well, his choice. Starting Friday, King's Kicks, a place for you to kick away your hard-earned money. $1000 to start, as if you're in Vegas, with vig assessed on each bet.

Meanwhile, here in the kiddy pool are this week's selections.

1. Arizona @ Dallas (-9). OK, explain to me why you want either side of this bet. Josh McCown has hung onto the starting job because either a) he has a picture of Dennis Green in corpus flagrante with a goat on a boat on Lake Minnetonka or b) Mrs. Kurt Warner is lobbying to keep her husband home to take out the trash. Meanwhile, Tuna changes kickers and wonders if Quincy Carter would have thrown that duck at the end of the Seahawk game. People still think these teams are contenders. In the NFC, alas, they are.
2. Miami "@" San AntonioNew Orleans (-2). I thought at first -2 was the over-under number for yards gained by Ricky Williams. New Orleans beat Buffalo at "home" well and now gets the Fish. Paul Prudhomme must be contemplating jambalaya with this group.
3. Jacksonville (-2.5) @ St. Louis. Am I the only person who's going to miss Mike Martz calling timeouts on 2nd and 6 from the Ram 24 because he just had a great idea/brain fart? Psst, St. Louis: Fisher DeBerry might be available. Am I the only person who thinks Bryan Leftwich is football's answer to the Black Knight? Stop telling me to feel sorry for David Carr -- the Jags seem to enjoy watching Leftwich get smacked like Curly Howard. This game's fun for two reasons -- you really need to pay attention to the Ram injury report, and these teams have never played each other.

In other news, I'm shocked to find out a WNBA star is lesbian. Just shocked. Next thing you know, someone will tell me Bill Romanowski used steroids. Now wouldn't that just be the berries!?!

I'm not speaking abouth whether I support or oppose Harriet Miers. I still don't know enough about her, and I have the hope that the confirmation hearings will give me enough insight to decide whether the president has made a good choice -- dashed in part by Captain Ed's pessimism over the nature of modern confirmation hearings (as expressed on NARN last Saturday). So requests of me from NZ Bear or Watchman's Words, frankly, to take a stand must be held in abeyance. Judgment is premature. If the question is "should Miers' name be withdrawn before the hearings?", my vote would be "no, we must give the president's candidate her chance, just as we've demanded for every judicial nominee in the past." But that's trust in the process, not the nominee.

Hugh Hewitt, in his vigorous defense of Miers, however, makes a statement about which I can say something. From a post yesterday:

Public choice theory holds that electeds do what is in their self-interest. It is not in the self-interest of any GOP senator to vote against Miers. I look forward to reading any post that argues the opposite.

Paul Musgrave tries to correct Hugh's brief description of public choice theory, an explanation which Hugh dismisses. But Musgrave is right and Hugh is wrong on this, and since unlike Musgrave I do work in public choice, let me take another try at getting the message to Hugh.

Public choice theory does not view elections as the goal of politicians but as a constraint on their behavior. What is in their self-interest may be simply power, or may be a desire to make certain legislation into law, or to spread government largesse on friends, or ... it's hard to enumerate all the items that are in one's self-interest, since that is unknowable. But the point is that election is just a means to an end, not an end in itself. Preserving status as "the party in power" is a means to an end, not an end in itself. Hugh's discussion of the public choice explanation for GOP unity on Miers is based on the senators having as a goal some monolith party structure. It is not. Each politician takes a party identification for the purpose of advertising her- or himself to voters.

Hugh couches everything in reference to election and party in power, for example here:

The upside of voting against Miers for a senator is so limited as to be almost non-existent in the real world of politics. The promises of glorious battles with the Dems and the break-up of the Gang of 14 means to them shattering their comfortable worlds and opening themselves up again to the enormous pressures that built throughout the spring. To those who, like Senators Graham and DeWine, took the most heat for the Gang of 14 deal, or like Senators Chafee and Snowe, facing re-election with restive conservative bases, or even stalwart Jon Kyl, facing a deep pockets opponent in Arizona, smashing up the president nominee just doesn't figure to be a good move. Try explaining to the Arizona Pro-life Network why Miers wasn't good enough.

And then there is the prospective trauma of losing, again as in 2001, the majority from which all their influence over legislation and hearings flow.

The italics are mine. Jon Kyl will view the lost pro-life voters as a constraint on his behavior, but only to be balanced both against the gained voters from those who oppose Miers and the value to Kyl of voting for his own principles. It strikes me odd that pro-life voters, who often launch quixotic campaigns in the name of preferring being right to winning, are now making a public choice case.

One preserves majority status by moving towards a center, by trimming one's own desires. That is the nature of the median-voter model that simple public choice theory says. But a more sophisticated view of congressional behavior (consider this paper I co-authored in 1991 for example, or just about anything Sam Peltzman ever wrote on the subject) says that not only constituent preference but the senators' ideologies count as well. What we have found in the Miers nomination is that the GOP Senate caucus has multiple ideologies, and that the Miers nomination cuts across these ideologies differently. Hugh may argue well that voting against Miers hurts the chances of a GOP majority in 2006; public choice theory teaches that the caucus is not monolith.

During the first year of marriage, Mrs. Scholar called me at the office one day to report a lizard in the back porch of our rented house next to campus in Claremont.

Well, it was more like this: King, there's a lizard in the porch!!!!! Come home now and get rid of it!!!!! Immediately!!!!!< click]

Never wanting to miss an opportunity to burnish my credentials as a man -- remember, I'm an academic economist, which does no burnishing around women, alas -- I ran down to the house and disposed of it. I don't think it was a lizard, really, just a damned big bug.

I can only imagine how JB Doubtless would have answered.

Didn't he just get married? And has anyone noticed he's blogging more now?

My colleague Dan Gallagher has been using this word around the department the last few days to refer to what's happened as gas prices have fallen.

Yet I hear today that Scott Adams is running a Weaseliest Behavior poll in which "gas price gouging" is listed as an option. So why not gas price degouging?

Out, out, you demons of stupidity!


(graph source)

(Crossposted at The Sports Economist)

I had breakfast this morning, as I do many mornings, with some people associated with our university's athletics department. This morning we were talking about the voluntary training sessions for our football players. We are a D-II program (a pretty good one, though last week's loss at Omaha hurt our chances for the playoffs), and we're amazed by the size of our players. One fellow said that this was because of year-round conditioning programs, all of which are voluntary. Quarterbacks organize skill player sessions to catch footballs and run routes in the spring; lifting and running are year-round, with some groups meeting in the morning and others in the afternoon. All of this NOT under the watchful eye of a coach, because that would be formal training.

That we can't have, because the NCAA says this is unfair. And so the University of Memphis was sanctioned on Friday for having too much formal training of its women's volleyball team.

In the volleyball case, the committee investigated reports in seasons from 2000 to 2003 that the women's team was required to participate in individual skill instruction during the spring. Only voluntary instruction is allowed under NCAA rules.

Under the probation, the volleyball program must reduce its number of practices and hours spent conditioning.

From the team's website:

The Tiger volleyball team was cited for a series of secondary violations that occurred over a three-year period that, when taken together, constitute a major violation. The violations were inadvertent but the coaching staff agreed with the NCAA that the staff had knowledge of legislation on playing and practice sessions and had a responsibility to ensure the volleyball program complied with the legislation limiting athletically related activities.

The volleyball program will receive two years probation, as well as a public reprimand and censure. The team will have its preseason practice opportunities shortened from 29 practices to 26 and spring conditioning will be reduced by one-week. The head coach is required to attend an NCAA Compliance Seminar at her own expense and will not attend one-week of spring conditioning. The coach will also have a letter of reprimand placed in her personnel file.

So who benefits from this? Obviously, the teams that compete against Memphis. Anyone care to guess who turned them in? What do you want to bet that the Tigers' volleyball team's success increased right around the 2000-03 seasons? Sure enough

1999 11-22
2000 13-20
2001 22-10
2002 19-15
2003 30-6
2004 27-10

Just as predicted years ago by Fleisher, Goff and Tollison, teams that suddenly become more successful are much more likely to face NCAA scrutiny. The story then was about money sports like football and basketball. Has it reached even women's volleyball now?

First, my thanks to William Polley for the nice link this morning.

Second: I read this in the Wall Street Journal's editorial this morning on the Bernanke nomination.

The modern Fed Chairman is also in a sense the nation's chief economist, so Mr. Bernanke will be heard from on everything from fiscal policy to Fannie Mae.

If that is true, it certainly is something arising from Greenspan. I doubt many people thought of Volcker per se as an economist. And its history with Federal Reserve chairmen that were academic economists, most notably Arthur Burns, isn't that wonderful -- Burns, after all, gave us the inflation of the Nixon-Ford era. But in another sense this is true: The Federal Reserve keeps on staff, both in Washington and at the twelve regional Federal Reserve Banks, a highly skilled group of researchers. This is true in many central banks. When I work overseas and need economic insight from locals, the first place I stop is with the central bank's research department. The Bank of Italy, for example, long held the reputation of having a group of independent researchers able to give objective policy advice in a very partisan Rome.

That reputation in the U.S. has continued and prospered under Greenspan, who more than most previous chairmen engaged the Board staff in discussions of economic indicators and research into alternative monetary policy rules (including the inflation targeting as Bernanke has favored.) Donald Kohn, who was a short list candidate for the chairmanship himself, has been both on the staff, been its head, and is a governor. He spoke last year about the role of the Fed staff:

When the Federal Reserve started its operations in 1914, aggregate data for the United States were virtually non-existent. Early research efforts at the Federal Reserve included the pathbreaking compilation of statistical indexes that permitted policymakers, for the first time in the nation's history, to monitor macroeconomic developments with some degree of accuracy. Besides measures of credit and indexes of industrial production that the Federal Reserve still produces today, during those early years the Board staff developed and published various other indexes for such critical concepts as aggregate sales, employment, payrolls, and prices.

This is still true in the countries in transition that I visit today. (Some of the advice they receive from advisors like me relates to data quality and dissemination.) And one of the things Greenspan did, Kohn notes, is to get the people who did operational research -- if we buy $X million of bonds on the open market today, what happens to the Fed funds rate tomorrow -- together with the longer-range researchers. The result, Kohn says, is positive.

This move not only improved morale [by eliminating some jealousies], it also led to a cross-fertilization of ideas that improved the quality of both research and policy analysis. Researchers actively engaging in policy analysis and participating in Federal Open Market Committee preparations better understand the issues facing policymakers and can target their efforts. On occasion--rare, I suspect--research economists actually benefit from the ideas of the policymakers. They also come to appreciate that policymakers need to hear sensible stories in clear English about the concepts being presented so that the policymakers in turn can explain understandably to the public why they are following a particular strategy. Getting some researchers to write in English has proved daunting, and too often, the policymakers themselves have not lived up to their side of the bargain.

One of the reasons I thought Martin Feldstein would have made an excellent choice is that he strikes me as the guy whose experience as a policymaker, a research director (at NBER) and a principles teacher at Harvard would have allowed for more benefits of cross-fertilization than other candidates.

So the role of research at the Fed has evolved over time, but it should be stressed that Bernanke will not present simply his own views on economics. He represents an institution that has a large group of researchers and a Board staff that helps influence what comes out in the Fed's public statements.

Those who think the Fed has been too inflationary of late, agreeing with the rest of the WSJ editorial this morning, may also wish to read Frank Shostak this morning. Here's the nub of my disagreement with Shostak's view: We can agree that the inflation would be stopped by a cessation of printing money. I.e., stopping money creation is a necessary and sufficent condition for stopping inflation. But that does not mean that starting money creation is a necessary and sufficient condition for starting inflation.

I haven't written yet about the "global savings glut" issue that Bernanke is known for; I'll come to that tomorrow.

Having found their efforts flagging on campuses -- and facing the Solomon Amendment case in the Supreme Court -- the neverwuzzers are now taking their act to our high schools. Mitch has coverage. Examples from our university here and here, which includes this message from Scholar Jack.

If you truly feel strongly about an issue, invest in it. Don't be half-hearted. Try civil disobedience. History has shown that it works pretty well.

None of this "we protest that you're upset we're protesting." It just shows you're not ready for prime time.

Should we make any big deal of the fact that the bond market sold off today, with Ben Bernanke replacing Alan Greenspan at the Fed? No, because looking at the inflation-indexed bond market shows that both indexed and non-indexed bonds fell by roughly the same amount. Were the concern about Bernanke that he would be softer on inflation, the non-indexed bond should have fallen more than the indexed bond. That link also includes a reminder that the bond market sold off when Alan Greenspan replaced Paul Volcker in 1987.

There was similar nervousness in the early months of 1987, as investors, analysts and other market participants realized that Volcker's term as chairman would expire in August, [economist Stuart] Hoffman recalled. It was unknown early in the year whether Volcker wanted a third term or if President Reagan wanted him to stay. Volcker had been chairman since August 1979, and was credited with leading the Fed drive that ended double-digit inflation.

"There was talk in the markets" about whether Volcker would leave, and some apprehension at the thought that "this guy, who since '79 had guided them through a lot of turmoil, would be leaving and someone new would be coming in," Hoffman said.

Everyone wants things to stay as they are with monetary policy, and the market prices uncertainty by asking for a higher real yield. Thus today's bond market.

So what would a Bernanke presidency do? The economists discussing Bernanke on the WSJ public econoblogger are generally upbeat; Mark Thoma is concerned that Bernanke will not speak with as much authority as Greenspan about budget deficits. It's worth remembering that Greenspan didn't do much of that either through the Bush 41 presidency -- his deficit hawkishness was also made effective by his interaction with Bob Rubin in influencing the first Clinton presidency. Having heard Bernanke speak more than a few times (including a visit here to SCSU a couple of years ago) I believe he'll grow into that role just fine. Given that, I believe, he is taking the next Greenspan term, he'll have potentially fourteen years to grow.

Much is made about his views on inflation targeting, the strategy of operating monetary policy with direct reference to a goal for the inflation rate. On this, I think Nouriel Roubini makes an excellent point.

[Bernanke] will have to move carefully as any attempt to formally change the framework of US monetary policy towards "inflation targeting" may lead Congress to try to interfere and impose politically damaging conditions on monetary policy: for example, Congress may argue that, if we move to a formal inflation target, we should also have a formal "high GDP growth" target, a political interference that would undermine the appropriate conduct and flexibility of monetary policy. So, I am not sure that inflation targeting will ever be adopted by the Fed, even during a Bernanke Chairmanship, as such a move would be fraught with many congressional interference obstacles. More likely, the Fed, like it is doing now will make its inflation forecast - an implicit inflation target - even more explicit to the public as an indirect
signaling of an implicit - but not formally explicit - inflation target.

This indirect signal has been there for years. Marvin Goodfriend (NBER paper #9981 subscribers link -- I haven't found an unprotected version of this paper) reminded us a couple years ago that Alan Greenspan made a qualitative case for an inflation target as early as 1989, when he said to Congress he wanted an inflation rate such that "the expected rate of change of the general level of prices ceases to be a factor in individual and business decisionmaking." Whether that's zero, one, or two percent is a debate worth having, and it appears that the Fed has been debating it. Chicago Fed President Michael Moskow said a few weeks ago that the issue was as much to do with communication as anything. That is likely to be the thinking for awhile -- there isn't an exact number that works, there isn't agreement about which measure of inflation you use, there isn't an easy way to say which shocks you'd tolerate and which you wouldn't.

I'm working on a couple of papers on inflation targeting in transition economies right now, and I would add one more thing to this -- what typically is meant by inflation targeting, particularly when Bernanke discusses it, is really inflation forecast targeting. That is, you are not going to determine policy by what has happened in the past to some measure of inflation, but you are going to forecast inflation explicitly, compare it to some reference of what is a good rate, and then announce how policy moves you from the forecast rate towards the good rate if those aren't the same. (See, for example, the discussion on page two of this article by Ben McCallum, discussing Goodfriend.) And here is where Roubini's point is excellent -- can you imagine this discussion of inflation forecasts occurring during Humphrey-Hawkins testimony before the Senate Banking Committee? Econometrics and Chuck Schumer don't mix.

As Goodfriend argues, though, it's as if we've already had inflation targeting; it's hard to believe Greenspan could evoke a rule like that in 1989 without having the Fed aim at a rate like this. Was it the only Fed goal? Certainly not, but the "measured pace" language of Federal Reserve directives to its operations desk (which provides the guidance for daily operation of monetary policy) has contained sufficient reference to inflation to act as an informal guide. And some within the Fed, like William Poole, have been uncomfortable with even that amount of hand-tying, of which more would come with more formal rules. I suspect, in the final analysis, the discussion of inflation targeting in the U.S. will remain academic.

Douglas Bass, I mean, back as Crossword Bebop. Missed you, buddy!

Phil Miller's blog is one. I think we're the only two MnSCU economists blogging right now. Stop by and say hi to Phil, and then look around. It's quickly become an excellent economics blog.

The news services say so. This should be interesting; the boards have moved strongly to Bernanke, but I'm still thinking it could be Martin Feldstein. Chances are it won't be Harriet Miers.

UPDATE: 'Tis Bernanke.

UPDATE 2: They didn't ask me, but here are a number of other economist/bloggers' reactions to Bernanke's nomination. (I'll have a separate response late this afternoon.)

One of those mornings with lots of little things on my mind.

Sightings over the weekend and this morning:

• purple shirts. "Yay! We're 2-4! We're contenders!" You also still have a PR problem.
• the Missus looks good dressed up as an Iowan.
• no leaves obscure my office view of Munsinger Gardens this morning. Time to switch to Lileks lockdown .sig.

Other observations:

• Mr. Lidge, I'd like you to meet Messrs. Stanley and Liebrandt (with no comment from Mrs. Bachmann, why?!?) Calvin Schiraldi, call your office!
• the Head of Learned Foot is officially now too large. OK, Foot. You and me, $1000, bet $11 to win $10, just like Vegas. Any game between now and year end. As much or as little as you like.
• NARN was a great show Saturday, and this followup by Chad on the Marcus Winters interview is well worth reading. Chad for SLP school board! I wish he'd move here, rather than have to vote from this slate. Three candidates hand out each other's literature? A pox on all their houses!

Administrivia darkens my afternoon. Bis spater.

Mrs. Scholar just came home from her opening night as a Pick-a-Little lady in the Music Man at the Paramount. I'm going twice, so it's at least worth one trip for you.

NARN is on the air tomorrow, and as Chad has been blogging all week we'll have Marcus Winter, contributor to Education Myths. If you are with Education Minnesota, please don't listen. Spontaneous combustion is possible.

UPDATE: Music Man was absolutely the best show G.R.E.A.T. has put on in a few years. The supporting cast was fantastic (even you, Powderpuff!) Another weekend to run, so if you're in the St. Cloud area, get to it!

(Full disclosure: Mrs and I are longtime supporters of G.R.E.A.T.)

It's been pretty clear for awhile that more females were going to college, but now the gender gap is getting wider, leading some to wonder if there should be affirmative action to get more males onto campus.

In May, the Minnesota Office of Higher Education posted the inevitable culmination of a trend: Last year for the first time, women earned more than half the degrees granted statewide in every category, be it associate, bachelor, master, doctoral or professional.

Cause for celebration — or for concern?

Before you answer, consider the perspective of Jim McCorkell, founder of Admission Possible, a St. Paul program to help low-income high school kids prepare for college. Last year, 30% of the students were boys. This fall, that has inched up to 34%, but only because "we actually did a little affirmative action," McCorkell says. "If we had a tie (between a male and a female applicant), we gave it to a boy."

It's hardly a surprise that female students are more numerous, given the general observation from econometric studies that the rate of return on higher education for females is 2% higher than for males. (There's a summary table of research in this paper as Table 1.) But it is interesting to see how colleges are handling this problem. My curiosity -- do female students prefer to have gender balance or do they prefer a majority of female students around them?

Source.

Related news.

So maybe Social Security reform is by the boards right now, but this could be a big part of Congressional activity in 2006.

John Bruce, a blogchild of the Scholars and a frequent critic of the tenure system in academia, thinks he's found another chink in the armor of those like me who defend it. I have argued that tenure is compensation for an income differential. John looks at annual salaries of academics and of nonacademics in related fields and finds they are not that far apart, which he believes is a refutation of my compensation claim.

According to this site the average salary for a computer programmer in California is $65,352. Application systems analyst? $57,209. Systems and programming manager? $79,143. Information systems manager? $78,977. Director of information systems? (typically a corporate VP) $92,191. These are well within the range of salaries for tenure-track professor jobs I cited from AAUP statistics in my last post. So where is the hypothetical difference King Banaian cites, where a full prof makes 65K and needs tenure to keep from leaving for a 90K job? In California, anyhow, all these jobs pay about the same. In fact, if you’re a tenured prof at USC (let’s not even whisper about Cal Tech), you’d be taking a cut in pay to go to a 90K private sector job. Doesn’t this change King’s example? Given King's suggestion that tenure is there to overcome a pay differential, aren’t universities now overpaying their faculty if they’re throwing in tenure with this deal?

Tenure is more than just compensation for a pay differential -- I'll get to that in a minute -- but it is a compensation. The mistake John makes is looking at an annual salary and comparing across job categories. This cross-sectional or latitudinal analysis takes into account only a single year of income and treats all workers within a job class as having the same other characteristics. But cross-sectional analysis to be done right must be done under the assumption of ceteris paribus -- all other things held equal. There's no correction for age, for example, and there's a fair chance that full professors are on average older than most of the job classes cited here.

I could go on, but that misses the broader point about tenure: It's all about assuring a lifetime stream of income, not a one-year event. And it's also about assuring a return on a risky investment called graduate school. Consider a 22-year-old graduate of a good physics program, given the choice between going into academia and into the business world. Academics usually do not receive tenure until their mid- to late-thirties (I was 32 when I got tenure, and that was considered quite young by most of my academic friends.) Grad school is of course a lesson in penury; a physics major entering the engineering world will have bumps in the road as s/he must change jobs, but typically fares better. At the point the grad student gains his doctorate and a tenurable job, income begins to rise. Once achieving tenure, the expected stream of income is greater still because of a decreased probability of being out of work vis-a-vis the worker in the private sector. It looks a little like this graph you see on the left. Tenure is part of the mechanism that allows for area B to compensate for area A. What John has done is to take a point on each line and compare them. It's not informative. For some people, area B must be greater than area A to induce them into academia -- these people will probably be patient in earning income and saving wealth, and perhaps more risk averse (though I don't believe risk aversion is necessary to make the story work, it's certainly sufficient.) That area B, by the way, is the basis for the expectations damages paid by universities to tenured faculty that are fired. They get only B, not the whole lost income stream, since they are required to mitigate damages by finding work elsewhere, perhaps in the private sector.

While on this point, let me add something on the nature of tenure. Tenure has been found in law to create a property right in jobs to faculty, which of course creates some perverse incentives. Many writers have argued that if you simply paid the tenured faculty off and created a different incentive structure you could get better behavior in terms of continued research output and faculty governance. But Li and Ou-Yang show that tenure doesn't seem to lead to reduced research. And there's a new paper in Economic Inquiry by Antony Dnes and Nuno Garoupa that shows how tenure may provide the correct incentives for the faculty to hire and monitor the university. Hiring new faculty often leads to an increased attention to their research over the older faculty member's research. They fall out of favor. If you do not provide them with some guarantee against falling out of favor, will they continue to hire good new faculty? And who is in a better position to decide which new PhD has a chance to do something pathbreaking -- the faculty or the administration? In essence, they argue, tenure might be a means of compensating senior faculty to incentivize monitoring honestly the talent of potential new hires.

The important point to remember is that a property right doesn't mean necessarily that a faculty member has a job for life. It simply establishes a price to buy out a lifetime contract. Faculty that misbehave in either "becoming deadwood" or in sabotaging younger faculty research can always be put out to pasture. It's simply a matter of getting the price right.

The Economics of the World Series podcast NARN, it's harder to do radio discussions over the phone than in person, but it worked pretty well. And yes, I predicted Astros in six, which will elate Skip Sauer. More on that tomorrow.

Or, "if I had two dollars for every cow..."

The story of Europe's pampered cows is a familiar one but always worth retelling. Each head of cattle in Europe gets a subsidy from the taxpayer worth $2.20 a day at a time when half the world's population - 3 billion people in all - scrapes by on an income of less that that. Rightly, the comparison has been a cause of outrage, and is one of the reasons why the European Union has been under pressure in the current round of global trade talks to make deep inroads into its absurd protectionist regime for agriculture.

Well, here's the stop press: the cows have had a pay rise. Calculations by Oxfam's Duncan Green for 2003 show that the average cow in the Dordogne or Lower Saxony can expect to have $2.62 a day lavished on it. The latest figures for 2003 show that the number of cows is down by 2 million but the total support for producers is up by $1bn to almost $19bn (10.7bn pounds).

(h/t: PSD Blog)

The campus newspaper was not put on the web lately, but last week it reappeared (with no explanation for its disappearance.) I had not seen the articles its reporter Tia VanVeldhuizen says caused her to receive requests from her editor to not write so much about God, but she says she is being told that it's too much. Apparently, the newspaper is continuing a pattern on campus of compensating for a Judeo-Christian society. She writes:

SCSU student Kathy Brickey said she heard in an ethnic studies class that since Judeo-Christian beliefs are commonly understood in St. Cloud, other beliefs should be emphasized.

Was this a university policy? To find out, I visited Les Green, director of the cultural diversity office in the education building. He disagreed with censoring my columns, and confirmed what I suspected of the university.

'It's not a policy, in my understanding. It's an atmospheric condition,' he said. 'Since everybody is aware of this (Judeo-Christian beliefs), why don't we talk about others?'

It's worth noting that Dr. Green is a candidate for the local school board. Again, respect the box.

How ironic is it that a campus newspaper that declaims censorship from student government puts its own reporters in this position!

The new Index of Leading Economic Indicators is out, and while the headline number will be a fall of 0.7% in September, the news isn't nearly as bad as it seems. The index is sharply influenced this month by two measurements: consumer confidence and weekly initial claims for unemployment insurance. We've already looked at the consumer confidence measurement, and there's not much evidence that these things matter for predicting a recession. As to unemployment insurance, there was a large jump in claims due to Katrina: for the week of Sept. 10, initial claims were up 49,665 in Louisiana, 5,177 in Mississippi, 3,506 in Texas and 2,719 in Alabama. The unemployment rate in Louisiana is now over 11%. Does this portend a recession? I think not. Nor is an expansion predicted by the one indicator offsetting about half of the decline in claims and confidence: Vendor performance (measured as slower deliveries received by shipping managers) was up a good bit, but that is too due to the strains on transportation from shipping relief supplies to the Gulf Coast. All told, the report is not much news.

It is easy to caterwaul about the liberal bias on American campuses, brought forward by John Tierney. I could provide you with a hundred links on this site to examples of it, and of the condescension that liberal faculty treat the claim of bias (as exemplified by the list of reasons for the lack of conservatives on campus that Tierney distills from email from defensive leftists.) But the last two paragraphs of Tierney make a damn good point.

Conservatives complain about this imbalance in academia, but in some ways they've benefited from being outcasts. They've been toughened by confronting skeptics on campus and working at think tanks in Washington involved in the political fray. They've come up with ideas -- welfare reform, school vouchers, all kinds of privatization schemes -- that have been adopted around the country and the world. But how many big ideas from liberal academics are on anyone's agenda? Democratic politicians are desperately trying to find something newer than the New Deal to run on next year. They're glad to take campaign contributions from professors, but they're leery of ideas from intellectuals who've been talking to themselves for so long.

There are certainly several center-left think tanks out there, but few that seem to get the notice that places like AEI, Heritage or Cato get. And it has been my experience that conservative policy analysts get influence in government, and did so during the Clinton years. Larry Summers may be a Democrat but his views are quite mainstream among economists and would be considered conservative by noneconomists.

But more to the point of the rest of Tierney's op-ed: Conservatives find it necessary to read liberal articles in their scholarship in order to gain publication in mainstream journals. There are options for economists who simply wish to avoid it all -- I think of the strong Austrian types here -- but these are limited and have difficulty gaining traction.

If you want to gain influence in the world, you must form arguments that withstand the liberal academy's reviews for publication. That only makes a conservative's work stronger. Liberal faculty often attend conferences which brook no conservative participation. Within that echo chamber bad ideas perpetuate and indeed multiply.

Be sure to come over to Phil Miller and John Palmer on the economics of the World Series. It's all baseball, all the time. You can get into how to break up the BosNY Axis of AL Domination.

It's that time again.

Time for Foot to gloat.

Time for Flash to mope.

Time for me to pick some games that give Flash some hope.

Let's get to it.

Current records: Foot 13-2, Flash 4-11.

1. Kansas City at Miami (-2). The line opened with KC a 2.5 favorite in some places, and moved quickly to Miami at 1.5. The Chefs whipped up on the Redskins last weekend with some trickery, but still allowed an anemic offense to score 21 points against them. The Fish now have Ricky Williams back to catch footballs rather than rays and doobies, but he only got 8 yards rushing. It's eh vs. eh in this one, but not nearly as much as...
2. San Francisco at Washington (-12.5). Wasn't so long ago that nobody thought the Redskins could even score 12 points in a game. Now they're favored by 12.5 on the basis of a rejuvenated Mark Brunell and a highly underrated Santana Moss. The defense figures to pin their ears back and have at rookie QB Alex Smith, who now knows he won't get pulled for Tim Rattay. If Smith can find the two young receivers Battle and Lloyd twice in this game, can the Redskins score more than three touchdowns to cover this line? Let's ask the gents.
3. Pittsburgh at Cincinnati (-1). Now that Sargeant Slaughter has Tommy Maddox out of his system, can the Steelers get back to business with Rothliesbanaaaiaaaiaaaiiiian and the Bus? Time to find out how for real Carson Palmer really is, and if Chad Johnson will ever shut up.

What, you say? No Vikes/Pack? Well, somebody thought I couldn't resist that game; I think it will be utterly unwatchable. And Flash is in enough agony already.

I have already confessed my discomfiture over the size of governmenet spending on relief from Katrina. But it appears some in Congress are using this as an opportunity for some real experiments in conservative ideas. The House Education and Workforce Committee yesterday proposed direct payments of education relief money to families.

For one year, the proposal creates Family Education Reimbursement Accounts to allow families and schools to bypass existing bureaucracies and provide direct reimbursement to schools on behalf of children displaced by the storms.

“The hurricanes have put a strain on schools across the nation, yet public, private, and charter schools have all risen to the challenge, opening their doors and welcoming displaced students as their own,” said [committee chair John] Boehner (R-Ohio). “Our hurricane recovery efforts must be focused on empowering individuals, and that’s why this proposal provides direct aid to parents and families rather than simply writing a blank check to existing government bureaucracies.”

The accounts provide $6700 per child to an account set up over the Internet or an 800 number, and parents would direct the money to the school where the child was enrolled. Since most displaced children are already enrolled, this avoids the cost of re-enrollment at a school the education bureaucracy decided could have the money.

The teachers unions have all been lined up against the idea since it was offered in Bush's speech in New Orleans last month. They are trying to force Louisianans, many of whom were choosing private schools before Katrina, into government schools. Let's hope the Republicans in the House persist in this battle.

I believe there's a misunderstanding of economics in James Taranto's latest Best of the Web. In the third item he takes on the issue of "energy independence", by which he takes it people mean to stop importing oil from the Saudis.

...our understanding of the liberal conception of [energy independence] is as follows:

• The government should establish policies aimed at reducing the use of oil (fuel-economy standards, higher gasoline taxes, incentives or coercive measures
  to encourage use of public transit, etc.).
  
• This in turn is would reduce our dependence on foreign oil, helping to starve the Arabs and thus reduce terrorism.

For the sake of argument, let's take the first part of this argument--that the government could reduce oil consumption, effectively a reduction in demand--as a given. Basic economics tells us that a reduction in the demand for a commodity will lower the price.

What happens when the price of oil goes down? High-cost oil production becomes uneconomical, which means that low-cost producers end up accounting for a greater share of the market. The lowest-cost producer of all is our friends the Saudis. Thus "energy independence," if effective at all, would actually make America more dependent on "foreign" (Arab) oil.

Not every action taken to reduce use of oil is a reduction in demand, though. While CAFE standards and incentives to public transit might indeed reduce demand for oil from private autos, taxes typically work to reduce the quantity supplied. And CAFE standards do have the effect of reducing family income, though it doesn't appear to be a large cost. Coercing people out of their cars to public transit by its very nature, destroys wealth. If it was better to take public transit, people would have gotten out of their cars already.

There's a way in which we could in fact do exactly as the "energy independence" people wish, which would be to impose an import quota or tariff on oil. Of course, the problem with this is twofold: first, the oil that would be imported would be Saudi oil, since as Taranto claims the low-cost oil is still that from the Arabian peninsula. Increasing the price of oil increases profits to firms. The US left has been hostile to increasing oil profits. Second and relatedly, a tariff on oil diverts funds from oil companies for exploration to government. I am not sanguine that those funds would be used efficiently in research and development of alternative energy sources.

(Side note: I showed this interview between Neil Cavuto on Fox's Your Money show with Lee Raymond of ExxonMobil to my class yesterday. I thought it was one of the best interviews I'd seen in a long time. One can learn a great deal about the oil business from it, and Cavuto, though sympathetic to Raymond, was thorough in his questioning.)

People naturally are led by prices to choose the most efficient method of transportation. As prices rise for oil and gasoline, individuals and firms are led to find other means of transportation, or to create more efficient automobiles. (As pointed out here, firms are already looking into cars that burn hybrid fuels that are efficient when the price of gasoline reaches $4-5 per barrel.) But politicians fear the electoral consequences of rising prices for staple goods; telling others to wear a sweater sounds so much better.

There is a deliberate and malicious attempt of DePaul University to gag its campus' College Republicans from any protest of an appearance there by Ward Churchill. Andrew Marcus has been tracking the case and reports two distinct attacks on the CRs: a change in the rules on flyers which allowed its student life office to reject a set of questioning flyers to be posted around the campus; and a change by its Cultural Center to exclude the CRs from a separate meeting time for student groups with Churchill.

This is a brazen attempt to chill dissent on the DePaul campus to avoid any conflict over Churchill's visit to the campus. What kind of campus does one run when one invites controversial speakers and then attempts to squelch controversy? To understand the outrageousness of these acts, imagine if someone had banned, say, College Democrats at the University of Hawaii from a presentation by David Horowitz.

(h/t: PowerLine.)

This morning's Chronicle of Higher Education contains an article (subscriber link) reporting on the College Board's 2005 editions of Trends in College Pricing and Trends in Student Aid. (Those reports are freely available.) One highlight of the latter report is the increasing use of merit-based student aid.

At the news conference, many higher-education officials criticized institutions that offer merit-based aid because, they said, the incentive tends to benefit students who would make it through college anyway.

By essentially paying smart students to attend a particular college, those institutions waste money that could be used to help students who really need it, said Amy Gutmann, president of the University of Pennsylvania.

William E. Kirwan, chancellor of the University System of Maryland, agreed.

"We have reached an indefensible point where a low-income, high-ability student is no more likely to attend college than a low-ability, high-income student," he said. "Institutions need to get their houses in order."

Is there any reason to pay smart students to attend your college? Sure, since the revenue the school receives from a student continues through the alumni-university relationship. This matters in two ways. First, the parents of wealthy students become a source of contributions, either directly or indirectly through the student's inheritance. Secondly, there is evidence in the economics of education literature (for example, see Baade and Sundberg) that the quality of the institution matters for gaining donations from alums. So if you have attracted better students through a merit-based scholarship, you can advertise that to your alums to get more gifts.

The other aspect of this discussion is that benefits accrue to middle- and higher-income families through the tax system (for education tax credits and deductions, and the tax-preferred status of 529 plans) because they pay the taxes. I find it highly unlikely that universities want these tax preferences ended; they simply want more of the federal budget thrown into Pell grants and other federal need-based aid, which allows them to increase headline tuition prices further.

A job candidate for a position in ethnic studies at a university gets an education:

Earlier that evening, I had met with undergraduates in the humanities program sponsoring the fellowship. My faculty guide led me into a comfortable room in the Multicultural/LGBT Student Center, where about 12 students were gathered around open boxes of pizza and bottles of soda on a coffee table. A few looked up and smiled at me, and my faculty escort called one of them over and introduced her.

"Leslie, this is Dr. Haladay from the University of California. I'll leave her to speak with all of you until around 7:30, then I'll come and take her over to the job talk."

"OK," said Leslie, a pale young woman with short black hair and Buddy Holly glasses. "Nice to meet you, Dr. Haladay. Should we start off by introducing ourselves?"

Leslie asked the students to assemble in a circle and told them what was happening. "OK, we're starting with introductions, everybody, so why don't we all say our name, our year in school, our major, and our pronoun. I'll start."

Emphasis added. The writer -- who is a she -- goes on to describe the bathroom.

After meeting with the students, I had a short break before my job talk. I asked Leslie, "Is there a restroom I might use?" She pointed me around the corner. There was only one door so I knew it had to be the bathroom. But there was no universal icon of a male with two stick legs or a female with a triangle dress demarcating the water closet here. No words announcing "Men," "Women," "Unisex," "Other," or "All of the Above." Nothing as simple, even, as the words "Restroom," "Toilet," "Facilities," or "Loo."

Instead, there was a plaque inscribed with a block of prose in rather small writing explaining the gendered politics of the public toilet. I wish I had written down the exact wording, although that might have looked a little strange. It said something about antiquated iconography, dialectical challenges embedded in the politics of public spaces, and the matrix of gay, lesbian, trans- and cross-gendered, intersex, and otherly abled identities. It also said something about washing your hands thoroughly and limiting your use of paper towels.

And as a he, I'd've simply walked outside and looked for a shrub.

Yesterday's First Person column in the Chronicle of Higher Education by a younger faculty member who wonders if he wants too much to indoctrinate his students.

Most of the time, there is nothing wrong with using our power to influence students' judgments -- after all, we need to get students to learn the truth. But we all know that this power gets abused. There is a continuum that runs from cultivating in students a healthy desire to know, through instilling certain cultural and intellectual tastes, to taking advantage of their openmindedness by feeding them the ideological catchphrases that rest like foam atop our considered opinions. It's easy to slide along that continuum, as the line separating education from indoctrination is poorly defined.

But we should learn to recognize indoctrination when we see it. In graduate school, I once overheard one teaching assistant tell another that she wanted to try to make her students into liberals before it was too late. Now, I think that having a few more liberals around, especially if they were strategically placed in swing states, would be a great thing for the republic. So in one sense, I sympathize with that TA. But I also know that to make students into liberals is an essentially illiberal act.

It is hard to get students to read current affairs; I have for years assigned my students daily reading of financial papers. Because of the editorial page slant of the WSJ I don't force that choice on students -- though it has the best coverage and a good educational discount price -- and I do put current event questions on exams that probably come from WSJ because that's what I read. What part of that is "influencing students' judgment"?

Recognizing that making students into liberals or conservatives is an illiberal act is the first step in recognizing the obligation that comes with the opportunity to "influence students' judgments". I don't see that obligation taken seriously very often.

We have parking permits on campus. You would think that means you have a right to park in your designated parking spot, especially when it's busy around here. I guess not. From today's campus email:

In order to accommodate the many prospective students and their families who will be visiting our campus on Thursday, October 20th and Friday, October 21st, Public Safety will not enforce parking on these two days.

We've had "Year of the Student" and I guess now it's "Year of the Parents Who Can Afford A Day Off to Drive to Campus and Give Us Tuition Money." I can't wait until the university declares "Year of the Employee".

UPDATE: A couple of loyal readers think giving away parking spaces paid for by employees is part of customer service. The university notoriously has done a lousy job providing parking to visitors. But the fee for students, faculty and staff, at $200+, is supposed to pay completely for parking lot maintenance and improvement, per MnSCU regulation (see here, for example). So the university, at its discretion, is putting a cost of its student recruitment program onto present students and employees. Does your boss ask you to help pay for advertising?

We hear from the newspaper, but not from our union until later in the day, that our faculty union and the state have agreed to the contract. If we could just find out what the hell they agreed to. I saw a dean with a markup copy this afternoon before I went to the doctor, but I was in no mood or condition to ask for a peek.

It could be worse: You could be a mechanic for Northwest. The American Mechanics Fraternal Association may insist it's not a sellout, but as Monty's Bluff notes, they've gone from saving 2300 jobs and