Tuesday, January 31, 2006

Bernanke's welcome, and what's up in Minnesota's economy? 

Mark Thoma noticed something interesting about the Fed's statement in raising the Fed funds target to 4.5% today.
Finally, and worthy of attention, Minneapolis did not request an increase in the discount rate potentially signaling the Minneapolis Fed was not in favor of further rate increases. We won't know for sure until the minutes are released.
For the non-economist readers: typically when the Fed funds rate is raised, the Federal Reserve banks will request an increase in the discount rate they charge banks for loans. The president of the Minneapolis Fed, Gary Stern, rotated off the FOMC this meeting so he did not vote on the increase in the Fed funds rate. We saw a broader amount of this behavior in the September meeting, as David Altig noted then.

... this information needs to be interpreted cautiously. All we know for sure is that these Banks did not submit a request for a 25 basis point increase in the discount rate (the rate the Fed charges banks for direct loans). We do not know if the Banks not included in this list wanted less or more. You are, of course, free to draw your own conclusions.
I seem to recall that Stern has, in the past, felt that robust economic growth was a reason to take rates up faster. I see nothing in the Beige Book report from Minneapolis that would indicate that we were somehow outside the experience of the rest of the country. Our own survey up here in St. Cloud would agree with that assessment. On the other hand, it could be concerns over increasing prices, in which case perhaps Stern wants to go faster on increasing interest rates. That would be, by the way, the doomsday scenario for the Bush administration and Republican leadership, since any speedup in the rate of discount rate increases would presage a recession in late 2006 and early 2007 ... just like Bush 41 had.

Lucky for them, though, this seems very unlikely. Given that the Fed's statement removed the famous "measured pace" language, new Chairman Ben Bernanke (swearing him in tomorrow -- the big guy was a little busy today) might have room to go a little slower -- rather than overshoot -- with increasing interest rates. Markets currently bet against going faster. (Go here and here for more statement parsing.)


They don't make book clubs like they used to 

Reader jw sends me a comment on Katherine Kersten's column on addressing the gender gap in education. He notes this paragraph:
Edina High School's all-boys reading club, Guys Quarterly, is another experiment. "Reading is seen as a feminized thing," says teacher Tim Klobuchar, who helped start the club. "Talking about literature sounds suspiciously like talking about feelings." The book club, he says, shows a guy that books are something he can share with his buddies.

Klobuchar acknowledges that reducing the gender gap will take time. For now, though, he's glad to see boys piling into his room to discuss spy novels and the best-selling "Freakonomics: A Rogue Economist Explores the Hidden Side of Everything."
Freakonomics??? When I was a junior high student I was already into war books, particularly Civil War and WW2. My uncle worked at a news and magazine distributor in Dover, NH and gave me copies of any of the Ballantine Illustrated history he could find, and I read these almost as fast. Ball Four was out by the time I reached 8th grade and, along with the Godfather (which I snuck off my parents' bookcase and read in three days), that's how my reading began to expand. My reading was not feminized.

I sincerely doubt I would have been attracted to Freakonomics, and I admit surprise that Kersten reports these boys are.

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College credit for protesting fellow students? 

Once again, DePaul University is in some hot water for silencing student speech on its campus.

DePaul�s latest foray into censorship began on January 17, when the DePaul Conservative Alliance (DCA) held an �affirmative action bake sale� at a table in the student center. Affirmative action bake sales are a widely used form of satirical protest against affirmative action. Organizers display a menu on which black and Hispanic students are charged lower prices than Asian and white students for the same items. The bake sales are intended to spark debate about affirmative action policies, not to raise revenue. At DePaul, the protest did just that, drawing a crowd of people who argued about the issue vehemently but peacefully.

Less than an hour into the sale, DePaul�s dean of students ordered the DCA to shut down the protest. University spokeswoman Denise Mattson told the student newspaper that the location of the protest was inappropriate, even though the university allowed a PETA table protesting the use of fur to be set up in exactly the same place a week later. On January 20, undergraduate Michael O�Shea, who led the protest, was informed that he was under �investigation� for violating DePaul�s �discriminatory harassment� policy. O�Shea met with administrative investigator Cynthia Summers on January 24. In a chilling e-mail exchange, Summers answered O�Shea�s question of exactly why the bake sale was being investigated by saying, �[t]here is no �because� for the investigation that is pre-determined.�

I went to read the article written about this in the DePaul campus newspaper, and I find that one class is using this as a teaching moment:
Megan Wiskiewicz, a junior history student, is currently working on an e-mail along with other members in her class, Women�s and Gender�s Studies 200: Women in Transitional Context, that will call for a few changes within the DCA organization. �We are expressing concern and seriously requesting that the organization put out a public written apology, be placed on probation and agree to take part in a forum on affirmative action,� said Wiskiewicz. The e-mail compiled by her class will be sent to Jim Doyle in Student Affairs, among other faculty members.
I do not know if this is considered part of their coursework, but organizing it within a classroom seems wrong.


Colossus exits 

It would be very difficult to list all the encomiums offered for Alan Greenspan as he leaves the Federal Reserve after today's FOMC meeting (the results of which we'll sift through later). Milton Friedman himself pays homage in today's WSJ, crediting Greenspan with low inflation and low inflation uncertainty, the latter of which may be even more important.

Greater price stability had far-reaching effects. By greatly reducing the uncertainties, enterprises could use their resources more efficiently and steadily. Price stability fostered innovation and supported a high level of productivity. ... Of the 379 months from January 1948 to Volker's accession, 17.4% are months of recession; of the 220 months of Greenspan's tenure, only 7.3% are.

It has long been an open question whether central banks have the technical ability to maintain stable prices. Their repeated failures to do so suggested that they did not -- whence, in part, my preference for rigid rules. Alan Greenspan's great achievement is to have demonstrated that it is possible to maintain stable prices.

A quick look at the reference cycle from NBER, though, would seem to show that expansions were getting longer and contractions shorter even before Greenspan's arrival. One of my credos for macroeconomic crystal ballgazing is "supply shocks suck." There have been two supply shocks during the Greenspan era -- Gulf War I and 9/11 -- and we had recession for both. Mild? Yes, but so too were the shocks relative to those of the 1970s (crop failure, two oil price shocks.)

Barry Ritholz says Greenspan was more lucky than right -- and there's a case to be made for that. But it takes good sense to not screw up a good thing. And in other ways, Greenspan has done some rather amazing things with the Fed. Take, for example, Greg Ip's column from yesterday's WSJ on the increased use of communications from the Fed to financial markets:
As recently as 15 years ago, the Fed said almost nothing about its actions. Beginning in February 1994, the Fed issued a statement when it changed interest rates. It was an ad hoc action to ensure markets didn't misinterpret the move. The first statement was attributed to Mr. Greenspan, not the FOMC.

Over the years, the process became more formal. Before meetings, Mr. Greenspan drafted the statement with a handful of advisers, primarily Donald Kohn, who was the head of the division of monetary affairs and FOMC secretary until becoming a Fed governor in 2002. Governors sometimes discussed the draft the Monday before an FOMC meeting.

...Other FOMC officials were initially unperturbed by their lack of input but that changed as the statement's importance grew. In mid-1999, the Fed began to issue a written statement after every meeting, including the policy "tilt" -- the likely direction of the next interest rate change. In August 2003, it went further and said that its interest-rate target, then 1%, would stay low for a "considerable period." From May 2004 until last November, it said rates would rise at a "measured" pace.
Think of how much more open the process is now. Fedwatching now can be backed by so much more than reporting on gossip you obtained by talking to a primary dealer desk somewhere. We can sift through FOMC statements now and determine what happens to interest rates within hours of a meeting. It used to be several weeks before the minutes of a meeting revealed anything to Fedwatchers.

Economics professors teaching macro are accustomed to saying it's only unexpected changes in the money supply that have real effects on the economy. That was at one time an argument for central bank secrecy (see for example this JEC report, which was an early influence on me to look at the issue; see also this book by my friend Pierre Siklos.) Those arguments have given way to a Fed that uses its reputation to make market signals that are treated as credible.

UPDATE: I should note that I am not saying Greenspan wasn't ambiguous. This is still the man who once said about his Congressional testimony "If you understood me, then I wasn't clear enough."


They know me too well 

Funny and slightly uncomfortable moment this AM: Coming back from a meeting in the student union, I pass by someone familiar-looking in the hallway of my own office and classroom building. She turns and addresses me by name, and sure enough if it isn't Senator Tarryl Clark. We chatted for five or more minutes in the hallway, and she says to me that she reads the blog and that her office intends to send me a pail for the next election. Touche, madam!

I did put to her the question a couple of people asked me -- what is her feeling about the stadium issues? It turns out she and I agree that local voters should have a chance to decide if they want to pay for a stadium in their jurisdiction. I don't think that's a hard position to take, but someone might want to get that message to our governor and the logrolling speaker of the house. I didn't ask her about this morning's Times editorial on eminent domain reform, but I wouldn't be surprised to learn she agrees with it. Overall the conversation was quite agreeable; she has all the people skills others had told me she had.

This woman is everywhere and working groups around town, and is informed about issues. And to prove the point, within an hour I saw her again talking to leaders of a local business group at a coffee shop as I ducked in for one last cup after picking up my car from the garage. Note to Republican leaders: If you want this seat back, you better get serious, soon.

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Causation, correlation, and algebra 

Joanne Jacobs notes the effects of a California rule that students cannot complete high school without passing algebra. Three-quarters of students who fail the course once also fail a repeat attempt. 61% of first-time students took D's or F's in the course. And as a results, students are leaving:
"It triggers dropouts more than any single subject," said Los Angeles schools Supt. Roy Romer. "I think it is a cumulative failure of our ability to teach math adequately in the public school system."

Now one problem seems quite clear to me: Just having students retake the course isn't going to help. If you are serious about math education as giving graduates "a better education and groom more graduates for college and high-level jobs," you need to address the lack of preparation in the first eight grades. That involves both a review of what is being taught in K-8 and something to remediate the students already in the system. Creating a pre-algebra course for students who fail freshman algebra should be a no-brainer ... assuming it is funded. Jacobs:
At Downtown College Prep, the San Jose charter school that's the subject of my book, ninth graders who are more than two years behind in math skills take a "numeracy" course to brush up on the basics while also taking algebra. Most flunk algebra the first time they take it but pass in summer school or 10th grade. ... For LA high schools to keep students in algebra year after year without teaching basic math skills is ludicrous.

Yes. But it seems to me as well that the data on algebra skills and college success (or career success) suffers as well from the old chestnut that "correlation does not mean causation". The lack of algebra skills among these students is not random; failing algebra can be a marker for a whole set of other issues that may make college or career success less likely. While there are plenty of studies that indicate that a students with a rigorous high school curriculum do better in college, that does not mean that it's causative. We know that kids that can hit a 90-mph fastball in high school are more likely to become major league players, but that doesn't mean you make any kid a player by putting him in a batting cage with the machine turned up to 90. It's this failure to distinguish between necessary and sufficient conditions that make for bad policy decisions.


Monday, January 30, 2006

Yes, I'm that guy 

I appear in a Mark Yost story (WSJ subscribers) on the business of the Super Bowl along with people who know a lot more. Thanks to Chad and Phil for noticing. I happen to think, along with Craig Depken, that Detroit is the BEST place for hosting a Super Bowl if what you are after is local economic impact. Still, the NFL oversells the impact -- we're only dickering whethter they are overstating by 300% or 500%.

Also highly recommended is Brad Humphreys' post on Super Bowl ticket prices.

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That's fer shur 

Flash noted late Friday that Patty Wetterling has blown off Mike Hatch's overtures to be his running mate, and that she will run in the Sixth District Congressional race. This means she will break her promise to Ev Tinklenberg that she would not enter that race. I asked some DFL party people about this over the weekend and they confirmed it. They are using a "draft Patty" campaign including a rally here in St. Cloud yesterday afternoon. Theory goes: If she breaks the promise she will receive negative press, but it would fade rather quickly and not be a problem for her by the time the district convention arrives. Makes sense to me.

Same people confirm to me that Ciresi is in.

"Socialist" author set to speak... 

You know, you never see that on notices for campus events. But invite a conservative, and you get a tag.
Student groups are bringing conservative author Dinesh D'Souza to St. John's University.

D'Souza will speak and sign copies of his best seller "What's So Great About America" in an event sponsored by Students Fostering Conservative Thought, the College Republicans and the local chapter of Young America's Foundation.

D'Souza is scheduled to speak at 7 p.m. Tuesday in the Pellegrene Auditorium at St. John's.

D'Souza has been shouted down and out of Columbia University in the past. I will be at the Medved event instead with most of NARN, but I hope some readers will visit D'Souza and report back on his talk. Here's his latest book.

Friday, January 27, 2006

UWEC still missing the point 

so Greg Lukianoff, interim president of FIRE, will be helping them find it.
Lukianoff�s speech, entitled �Liberty in Danger: The All-Too-Frequent Quashing of Student Rights at UWEC and Nationwide,� will take place at 8 p.m. in UWEC�s Schofield Auditorium. In the speech, Lukianoff will discuss UWEC�s nationally notorious RA �Bible study ban,� which FIRE originally brought to light late last year, as well as several other abuses at UWEC and on other campuses.
We've had a speech here by former FIRE president Alan Charles Kors, and if Lukianoff is as good, UWEC is in for a treat ... and some heat.

"Well, King's there, so there's no problem!" 

There are times on campus where I think I'm used as the conservative token. "Oh, King's on that committee, so we've had a diversity of thought on this issue." My eyes roll heavenward. It makes no more sense to me to put a conservative on a committee, say, that hears a discussion of academic freedom than it does to be sure there's a faculty member of color on every search committee.

Another professor here at SCSU, Phyllis VanBuren, has written an editorial on SCSU's debate of academic freedom. After about six months of discussion, we got the faculty senate to agree to the 1940 AAUP "Statement on Academic Freedom and Tenure." That's a good thing, and though there's still much to debate over how we will make the university adhere to the statement, that's a debate worth having. Prof. VanBuren recounts many of the things that this blog has devoted itself to over the last three and a half years. It's a nice piece, well worth the read, and I'm happy to include Prof. VanBuren among my colleagues who want there to be greater intellectual diversity on campuses.

I'm more amused, however, by the SCTimes chatters, one of whom refers to this blog as "enough bias on either "side" to balance out."
My point with the SCSU Scholars site was because most people I talk to assume that college bias is liberal.

I am thinking in business classes, the default is going to be slightly Republican, and in the social services field, it is going to be Democrat, because of people who are attracted to those sorts of fields in the first place. That's just one example.
To Laura of Saint Cloud I say, first, that we're not in the college of business but in the college of social sciences. You're right that social services tend to be Democrat, but so too are economists, unless you want to take refuge in the knowledge that the ratio of Republicans to Democrats is "only" 1 to 3. Of course, maybe it's selection bias -- but that says very little for me!

Prof. VanBuren asks at the end of her article, "Who wrote that sunshine is the best disinfectant?" Long-time readers of the Scholars will know that it used to be in our banner, and that the quote comes from Justice Brandeis. But I am just a flashlight, not the sun.

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1(%) out of 4 ain't good 

Fourth quarter GDP growth fell to 1.1% in the fourth quarter from 4.1% in the third. GDP from an expenditures approach consists of four items: consumption; investment; government expenditures; and net exports. Taking each one in turn with two numbers -- the contribution to growth in the fourth quarter, and in parentheses the third quarter contribution.
Folks will tell you that you shouldn't worry over a single data point, and some even want to average the previous two. But there's no way you can paint this as good news.


Confessions of a gadget geek 

I am known to my friends as one of those "early adopters" of technology who has to have the latest, greatest toys. I have one of my breakfast friends who does the same thing, and his PDA with Bluetooth and a wireless connection typically beats my Treo for finding the name of the new woman on "24". (This one.) But mine grabs my office email and his can't, so there! I had to have the cool looking Vaio Z1 when they first came out, the first Touareg, the first house with wireless, etc. I know it's expensive. Why do I do that?

The answer comes, of all places, from Adam Smith, as Grant McCracken points out. He quotes from the Theory of Moral Sentiments.

A watch, in the same manner, that falls behind above two minutes in a day, is despised by one curious in watches. He sells it perhaps for a couple of guineas, and purchases another at fifty, which will not lose above a minute in a fortnight. The sole use of watches however, is to tell us what o'clock it is, and to hinder us from breaking any engagement, or suffering any other inconveniency by our ignorance in that particular point. But the person so nice with regard to this machine, will not always be found either more scrupulously punctual than other men, or more anxiously concerned upon any other account, to know precisely what time of day it is. What interests him is not so much the attainment of this piece of knowledge, as the perfection of the machine which serves to attain it.

How many people ruin themselves by laying out money on trinkets of frivolous utility? What pleases these lovers of toys is not so much the utility, as the aptness of the machines which are fitted to promote it. All their pockets are stuffed with little conveniencies. They contrive new pockets, unknown in the clothes of other people, in order to carry a greater number.

I'm busted! I have contemplated carpenter pants at work for just this reason (cooler, more metrosexual heads have prevailed) and so instead it seems sometimes my pants are about to fall off because there's four pounds of electronic crap in my pocket. But, McCracken explains, it's not even our fascination with "the perfection of the machine" that causes us to risk a wardrobe malfunction:

It is as if Smith is saying that there is something about the object that serves as an expression of its use, that it works, when we look upon it, as an anticipation of itself, as a kind of prediction of its efficacy. It's as if Smith is saying that we treasure the object, that we take pleasure in the sight of the object, because it is a time machine showing us what it can do.

The view of the object (watch or PDA) treats it as a statement of the owner's enablement or potentiality. And clearly the other Scottish philosopher was on to something. Objects add enablement to the owner. Without apology or hesitation, we claim this enablement as our own. Nice work, Mr. Smith. The utility is not (only) the function. The utility is not (only) the enablement. The utility is (also) that new confidence that in a world of astonishing complexity and dynamism, we are enabled.

Am I a gadget geek out of fear that I need more and more things to prevent the world from going too fast for me? I have a desktop at home and at my office that is cluttered (to be polite), and people often remind me of the phrase "a clean desk is the first sign of a terrified mind." I am never stressed about the desk because I manage paper flow rather well. I seldom miss appointments either. But from where comes the utility, the satisfaction, that we get from things that organize our work? I pay for the service that allows my phone to get my work email, and I do so out of my pocket. Am I just showing off? Or is it because I'm deathly afraid I'll miss that one email that will offer to change my life, but the offer good only for a moment? Or, is it to say to others (or myself?) that I can still master a complex world?

For those microeconomists who draw up utility functions and indifference curves, I wonder, how do you deal with such disparate sources of satisfaction? Your "feh"s invited to comments...


Thursday, January 26, 2006

And bankrupt it is 

I sent a couple of comments this morning to Craig Westover on a piece in the morning paper he had read, and El Capitan Palito de pescado has used it to work over Laura Billings. It concerns her use of a study I find pretty crappy to make a case for single-payer health insurance. You can go read what I said, but first read what Craig said:
Medical bankruptcies hardly justify the call for Universal Health Care. Some quick calculations indicate that the total cost of the bankruptcy problem for individuals ($13,460 average outlay in medical bankruptcy filings times approximately 750,000 medical bankruptcies) means we're looking at about a $10 mbillion bankruptcy problem. That�s a far cry from the billions of dollars that Universal Health Care would cost, not to mention the inflationary effect on medical costs of �free� service.

As a country, we�d be better off cutting checks to seven-tenths of one percent of the population that are (a big leap here for the sake or argument) victims of market failure than we would be to turn everyone�s health care over to the same government implementing a square-wheel rollout of the prescription drug program.
And as I should have noted to Craig before, to get 750,000 bankruptcies requires extrapolating from a non-representative sample. It could be and probably is much less than a $10 mbillion problem. In no small part, it's because those who probably are most harmed by the lack of health insurance options never file bankruptcy anyway, because they have nothing to protect. It's a silly way to make the case for single-payer; a bankrupt idea.

Robert Samuelson hits the nail on the head: For most people, the system really isn't broke.
The reason is that most Americans don't want to fix the system in that sense. Most are satisfied with their care. Most don't see (or directly pay) the vast majority of their costs. Because politicians -- of both parties -- reflect public opinion, they won't do more than tinker.

Unfortunately Samuelson goes down the road of saying "experts know it really is, and our indifference is dangerous." Why? Because he says we want incompatible things: "(1) provide needed care to all people, regardless of income; (2) maintain our freedom to pick doctors and their freedom to recommend the best care for us; and (3) control costs." That idea, too, is bankrupt. I do not really want to provide you with needed care regardess of income, because to do so means I obligate others to take care of you. I don't have that right. I only want it because I don't bear the costs myself. Samuelson is correct in saying that "We need to reconnect people with the public consequences of their private acts." That's exactly right. Himmelstein's idea goes in the opposite, wrong direction.

CORRECTION: Doug S. points out that it should be billion, not million. I didn't review Craig's calculation but just copied it over. My bad, but it doesn't change how I think of this issue at all.

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Your money and banking lesson for today 

Comes from Dave Barry:

The ancient Chinese tried to solve the problem [of what could be used as money--kb] by using seashells as money. The advantage of this system was that seashells were small, durable, clean, and easy to carry. The drawback was that they were, in a word, seashells. This meant that anybody with access to the sea could get them. By the time the ancient Chinese had figured this out, much of their country was the legal property of gulls.

And so the quest continued for a better form of money. Various cultures experimented with a number of commodities, including tea, grains, leather, tobacco, and Pok�mon cards. Then, finally, humanity hit upon a medium of exchange that had no disadvantages�a medium that was durable, portable, beautiful, and universally recognized to have lasting value. That medium, of course, was beer.

I guess that's another book I have to buy. Of course, some places cigarettes were money, and a chess set I still play with today I bought in Romania in 1974 for a carton of Parliaments. (Those were a favorite brand in eastern Europe back then.)


Why Russia might matter more 

Now that we're aware of the situation with gas in Ukraine and the South Caucasus, we might be able to better address the question I raised last Saturday with Captain Ed over whether it's China or Russia that is going to matter more in the West's dispute with Iran over nuclear development.

Russia is being seen as a go-between for Iran through its help developing Iran's nuclear power facilities at Bushehr. This now has expanded to Russia creating a joint enrichment program on Iranian soil, with the apparent blessings of Europe. For their part, the U.S. State Dept. has said that having the Russians involved in affairs is providing some reassurances:
...the history of those discussions is one of frustration on the part of the Russians. They have put forward a proposal that, as I described before, would address Iran's stated desire to have peaceful nuclear energy. And we would question why the need for peaceful nuclear energy, given the fact that Iran is sitting on top of some of the world's largest hydrocarbon reserves, but put that aside, and that would give objective guarantees that would provide the international community some comfort that Iran couldn't use that mechanism to try to obtain a nuclear weapon.
Of course, the Iranians say, if you refer us to the Security Council all this nice cooperation is off. Who would be harmed most by this, and who would intercede in the Council to prevent sanctions? Ed argued for China, but I argue for Russia. The pipelines give us part of the story.

When the pipeline fires left Georgia and Armenia without gas in a very cold winter, the Iranians offered up gas to cover the shortfall until the pipeline could be repaired. The Iranians would love to drive a wedge between Georgia and the west, which has viewed the Rose Revolution as a crowning achievement of Bush's desire to spread democracy. Armenia, not nearly as big on the West's radar, has already been striking deals for Iranian gas. Armenia pays for the gas by bartering its excess nuclear electricity capacity. This of course harms the ability of Gazprom to maintain its power in the region. Why do that, if not because Russia and Iran are cooperating beyond Bushehr?

Russia's Caucasian flank has always been difficult for it to defend, and of course the north Caucasus contains Chechnya, Ossetia and other areas of unrest, much of it connected with Islamic terror. It is in Russia's interest to keep Iran placated to prevent an upsurge of terrorist activities in its 'near abroad'. It therefore has a real interest in Iran's plans for nuclear development, whatever they are, not being seen as dashed by Moscow.

So the question between Ed and me comes to this: Which is the greater motivation to protect Iran? China's never-ending thirst for energy? Or Russia's desires both to protect its soft underbelly and to gain more access to warm-water ports? (Remember, they're not on all that solid a footing in Crimea any more.)

Wednesday, January 25, 2006

The 65 percent solution 

The Christian Science Monitor reports that a new fad in education funding is dedicating a certain share of state spending on education to classroom instruction. They call it the "65-percent solution". Here in Minnesota, Governor Pawlenty has upped the ante to 70%. I had wondered how tightly he was going to define "classroom instruction"; now we know.
Under the proposal, classroom expenditures would include classroom teachers and personnel (salary and benefits), special education, vocational education, classroom instructional supplies, instructional aides and activities. Non-classroom expenditures would include district and school administration and support services, operations and maintenance, staff development, pupil and instructional support services, athletics and co-curricular activities.
Pawlenty's press release says under those definitions, on average Minnesota school districts spend 69.2% on classroom instruction. Here's a spreadsheet showing the calculations for each district. I ask, what's magic about 65% or 70%? Larger districts have scale economies and scale diseconomies. We know that cities tend to have higher per-pupil spending, and since they likely have more special ed students, their share of spending in instruction is likely larger. Sure enough, Minneapolis and St. Paul are comfortably above this line. Duluth and Rochester are a little below; Roseville is the largest metro-area district that is well below.

It seems like a one-size-fits-all solution; as the CSM article points out as well, while we know there's a correlation between state spending shares on classroom instruction and performance, we don't know if that correlation holds up at the local level.

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But Vladi it's cold outside 

It seems like the Russia-Ukraine-Europe gas crunch will not go away. On the back of a cold snap in eastern Europe that is causing a great deal of anguish in Ukraine, the Russians and Ukrainians cannot sign their agreement on Russian shipment of gas to Ukraine. Heat is in such short supply that the Ukrainian prime minister has suggested he may ask industries to halt production to divert gas to residential use; the Russians are accusing Ukraine of siphoning gas again, which the Ukrainians deny. LEvko reports that the Russians are asking the Europeans to help pressure Ukraine to not siphon.

The problem is made worse by explosions on the gas pipelines between Russia and the south Caucasus. It may be Chechen sabotage. Russia may therefore be diverting gas it would have sent through to Europe to the Caucasus instead, greatly complicating matters. I don't have any definitive view of what's happening yet, but I think LEvko makes an interesting case:

In an address to Ukrainians yesterday Yuschenko unequivocally said: "Ukraine is receiving Europe's cheapest fuel, while its gas transportation system remains in state ownership. There can be no discussion of its transfer to some other country or group of countries." PM Yekhanurov, said much the same, more wittily, in a recent TV interview: "He who gives up his gas transport system will have to dance to music played to him on a balalaika". He did however encourage and invite foreign partners to co-operate in developing any new pipelines through Ukraine.

In March 2004 President Yushchenko proposed the creation of an international consortium to build, own, and operate a new large-capacity gas pipeline from Turkmenistan via Kazakhstan and Russia to Ukraine and on to Western Europe, but it came to nothing because, as I wrote in an earlier posting: "this would have challenged Putin's plan of a Eurasian producers' cartel which would enable Russia to monopolize supply and dictate the price of gas delivered to European customers." Any possible foreign co-owners of Russian gas transportation systems would surely insist that Russian domestic consumers also contribute a fair price to system costs too.

So perhaps for Europeans it will be difficult to gain any control of existing pipelines, but for future pipeline projects between Russian gas fields and European markets, [which certainly will be required] they should collectively demand some input and control. A good place to start would be to ask Germany to have a rethink and cancel its planned expensive underwater Baltic pipeline, which bypasses Poland and the Baltic countries. For the same money a shiny new overland pipeline could be constructed direct from the gas fields to end users. Sadly I don't think it will happen, not while every player is just thinking of their own self-interest.

UPDATE: Now this is interesting: Abdymok reports that the "technical reasons" for the delay in signing the gas agreement is that the Ukrainians are balking at buying shares in RosUkrEnergo, the new joint venture to deliver Russian and Central Asian gas to Ukraine, is that the Ukrainians claim not to have the money.


Sometimes you gotta fail to succeed 

I was just reading the transcript of the radio interview of Theo Epstein and Larry Lucchino, who have resolved their differences and brought Epstein back as general manager of the Red Sox. This comes after an 85-day trial separation, when Epstein quit what he called his dream job as Boston GM over differences with Lucchino. When I was in Boston three weeks ago Epstein was already being interviewed in the papers, and you could see hints that he would have some role with the Sox. I won't go into my feelings about this as a Red Sox fan, because if you're not one you most likely don't care. But this answer to the first question really grabbed me.

What it was about was we had a fairly fundamental disconnect about things that are very important in an organization, if you�re going to stay for three years as a GM and be responsible not only for the product on the field but be accountable to your colleagues and the fans as well and where that disconnect was fairly wide ranging. ...

I�m taking a chance by coming back. Larry�s taking a chance by having me back. John [Henry] and Tom [Werner, the owners] are taking a chance by getting involved to help broker this whole thing.

So the disconnect is related to everything from baseball philosophy, simple issues that come up all the time but are very important. How much do you value the long term vs. the short term? What�s your philosophy? How far will you go to retain veteran players? How much do you want to rely on young players?

Everything from baseball philosophy to simple communication issues � How do we communicate internally? What�s our philosophy to communicate with the press? How much must we trust each other to communicate the right way with respect to the media? It was all these issues that may not seem that important on the outside looking in but I can tell you and Larry can tell you, that when you�re in a leadership position with a sports franchise, especially one like the Red Sox, those things are fundamentally important.

That applies to much, much more than a sports franchise. Sometimes, you need to make a clean break to get others in the organization to see wherein lies the breakdown in communication, where the loss of vision is. Particularly if trust is lost. I'm heartened by the story that trust appears to have been restored in my favorite baseball team, but even more heartened that trust can be restored by people passionately discussing their principles and having the courage to stand by them.

Tuesday, January 24, 2006

Bounty no more 

The alumnus of UCLA who we reported last week paying $100 for information on his alma mater's biased professors has withdrawn his offer. The Los Angeles Times reports that several members of his advisory board have resigned since the press coverage of the bounty hunting had begun. The Times' article seems to take great lengths in attacking Andrew Jones (some of it ad hominem), who was successful in raising $24,000 for the project. It was a bad idea, but I doubt even Mr. Jones was prepared for the poopstorm he's experienced this last week.

UPDATE: I hadn't seen Mitch's post when I wrote the paragraph above.

Now, I could hardly care less about the goings-on on the nation's campuses, personally, although since my children are approaching college age, I'm certainly paying attention. Personally, I took a look at the graduate-school paper chase when I was still in college, laughed, and scratched it off my to-do list; I figured life would be more productive running on a Habitrail wheel. Other conservatives see it differently, no doubt.

But I don't see life from the academic's perspective. So someone tell me - why is it a problem to academics if a private group reviews professors' political biases for non-commercial, copyright-law-compliant, critical use?

I commented to Mitch that what UCLAProfs does not appear to be a "non-commercial, copyright-law-compliant, critical use." My lectures are a creative act, paid for by the university. The university may claim rights to that act, or may let me retain rights. The battle over intellectual property on campuses -- particularly for research funded by outside grants -- is replete with stories like this. First, Jones raised money in return for "getting the goods," making the enterprise a form of commerce. Second, he was careful to tell students that they needed to ask permission of the faculty, but it may be that UCLA doesn't give faculty transferable rights. I may be able to give my (paying) student permission to view or even record my lecture for her individual use, but the university may not give me the right to tape it myself and sell it off-campus, and it may not allow students to do likewise. See Steve Bainbridge FMI, because he's a law professor and I'm just an economist. As to other views Mitch would like to see, Bainbridge surveys the Sunday LATimes, which gave a defense of the academy worse than what BAA is doing.


Graph of the day 

From this morning's New York Times:

While the Big Three are visibly shrinking, their combined moves do not spell the end of automotive manufacturing in the United States. But the geographic footprint has largely shifted south, where a new auto industry is flourishing.

Japanese, German and South Korean companies now employ 60,000 people, or about the same number by which Ford and G.M. have said they will shrink. But foreign makers are creating a younger, cheaper work force, sidestepping Detroit's unemployed and the higher pay and benefits packages that Detroit workers were getting.

As you can see from the accompanying graph (source), that isn't exactly true. Most of the automotive industry expanded to reach foreign markets and capture new SUV buyers among boomers in the mid-1990s, a model that worked only for awhile. But it is worthwhile to see that what we've done is just return to the level of employment that existed in 1990. The cuts announced would reduce another 7% of the workforce, assuming none of the automotive companies outside the Big Three expand production.


This logo thing is just getting tiring 

Using a publication that was created by the anti-Semitism settlement of three years ago, the administration has decided to continue its war on the University of North Dakota logo. It includes a peroration by our President Roy Saigo, who has made the logo his cause celebre, and devotes 10 of its twelve pages to the issue. The slogan of the publication is "Encouraging new ways to think how we view each other." I see only claims of victimization, and that ain't new.

Is it any coincidence that this comes after the student newspaper, which had already voted to not use the UND athletic name in its stories, received continuous heat for a picture of a hockey game between the two schools in which a UND player jersey was visible? The Chronicle finds itself having to defend an action shot of a sporting event.

This publication has produced some of the best collegiate photography in the state of Minnesota. It is also our policy to print the best available photographs our talented staff submits. The editorial board decided to continue this tradition of excellent visual arts and will not discard a photograph of the UND logo if it is the best graphic we have available.

...Newspapers are valuable to society because they objectively report the facts, and this staff is not in the habit of placing disclaimers on facts. The fact is the University of North Dakota's athletic team name is Fighting Sioux. The fact is they have a logo with a drawing of a Native American. Until those facts change, we reserve the right to print the news without a sugar coating.

Two points: First, it strikes me as quaint that the newspaper still sees its function as "obhectively reporting the facts, and this staff is not in the habit of placing disclaimers on facts." As "Mayor of the MOB" Doug Williams links today, the teaching of journalism and the work of reporters differs greatly. The newspaper seems to have eschewed the "comfort the afflicted and afflict the comforted" mindset of modern journalism. Photoshopping out the UND logo in the campus newspaper also blurs the distinction between reality and the cosmic world we wish we had. Bully for them for not seeing comforting the afflicted as part of their job.

So why does the campus and its leadership continue to think they should? Part of it ties, in my view, to Shelby Steele's excellent diagnosis of Hillary Clinton's MLK day speech to a largely black audience.
When political pandering goes awry, it calls you a name. On an emotional level, many blacks will hear Hillary's remark as follows: "I say Republicans run the House like a plantation because I am speaking to Negroes--the wretched of the earth, a slave people--who will surely know all about plantations." Is this a tin ear or a Freudian slip, blacks will wonder? Does she really see us as she projects us--as a people so backward that our support can be won with a simple plantation reference, and the implication that Republicans are racist? Quite possibly so, since no apology has been forthcoming.

Think the analogy inapt, when you hear this in our campus diversity publication from the head of the American Indian Center?

Along with other societal abuses and stereotypes, Indian mascots and logos separate, marginalize, confuse, intimidate and harm American Indian children, thereby creating a barrier to learning and making the school an inhospitable place. Schools must be places where children and students are allowed equal opportunity to participate in learning. The use of Indian logo caricatures denies full and welcome participation to American Indian children, while at the same time, teaching all school children to tolerate discrimination against Indian people, their heritage and their cultures.

All this from a picture on a hockey sweater? That's some sweater. Or this, from a Native American student,

When asked to write about my opinions of the mascots, logos and stereotypes presented at a collegiate level, I was very excited. I began preparing by sitting on my floor in my office, engulfed with hundreds of articles and files that I have collected regarding this issue. I started highlighting everything I wanted to represent. I was ready to command an audience and I was ready to show the world the ill effects mascots and logos had on Native Americans and our society. I came to the conclusion, as wonderful as this presentation could have been, to write not from an academic perspective, but from the my perspective as a Native American woman, a college student who is offended, hurt and humiliated by the misuse of Native American mascots and logos.

In other words, at an academic institution, where preparing an academic argument, she chose to become a symbol, to be used by the institution as a means of assuaging its own perceived guilt. Does the institution see Native Americans as injured people too unable to lift themselves up beyond the ill-informed use of one its symbols for an athletic team?

It would seem to me you'd be tired of this by now. It would seem to me that some of our campus leaders run articles and glossy magazines to harvest cheap support from groups that they view as victims, and that their support is only desirable as long as they are victims. They do not attack Native American mascots to give Native Americans power, but to give it to themselves.

UPDATE (6/12/06): Thanks for Hugh Hewitt readers stopping by. Please see this updated post.


Newbie gets a plate at the big table 

In a rather fawning frontpage article this week in the campus newspaper regarding the election of Tarryl Clark to the state senate, we learn that she has some pull as a former DFL state associate chair.
Clark will be on two Senate committees that will have a direct impact on schools in Minnesota: the K-12 Education Policy Division and the Higher Education Policy Division. She will also be on the Jobs, Housing and Community Development Committee.

"It's rather rare for freshman legislators to be granted assignment to finance committees," said State Senate Majority Leader Dean Johnson. "But Tarryl made a strong case that the St. Cloud area, with both a state university and a technical college, needed a voice in the state's higher education budget decisions."Along with education, Clark's agenda will likely fill up with a slew of other perennial issues, such as the building of a new stadium, a balanced budget and economic growth.
Why do you think it is rare? It's because these are committees from which Sen. Clark will be able to dole out pork to her constituencies (which of course includes my employer). It is no accident that the very day her committee assignments were announced, she was seen having lunch with the president and the legislative liaison of SCSU (to which I say, good for you President Saigo!) The return to pork

I would like to know why the stadium issue is in that list, though.

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Party identification shifts towards Democrats, DFL 

Professor Steve Frank, a co-director of the SCSU Survey, sends me a link to a special report by Gallup that shows a shift in party identification towards Democrats nationwide, and towards the DFL in Minnesota. The moving of party ID, Gallup points out, coincides with the decline in Bush's approval rating (the nationwide Democratic advantage in the first quarter, when Bush's approval rating averaged 51.3%, was 0.2%, but in the fourth quarter Bush's approval fell to 40.6% and party ID shows a 6.5% advantage for Democrats.)

Likewise in Minnesota, the state showed itself to be competitive -- leaning less than 5% in the DFL direction -- in 2002 and 2003, but becoming more DFL in 2004 and 2005. Prof. Frank points out to me that the Survey polls in 2002 and 2003 likewise showed party ID at 38D/34R, as opposed to the latest poll at 45D/33R. That is, as Bush and Pawlenty both have declined in the last 12 months, those who had responded independent, apolitical, or don't know, have moved their affiliation to the DFL column. Party ID isn't a fixed point, as Steve pointed out in a comment last month.

My friend Gary Miller and others at KvM have slagged the Survey for suspect polling by oversampling Democrats. I think they need to reconsider.

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Monday, January 23, 2006

I hate the beginning of semesters 

This one has been even more goofy than the usual. So busy that I have trouble getting posts up here. If I may have your patience one more day while I get my last night class launched tonight, I'll be better tomorrow.

So busy that I won't be able to make the Center for the American Experiment's evening with Peter Schweizer. If you heard him on NARN on Saturday, you know this will be fun. Corey Miltimore, a media specialist at the Center, has a new blog and reviews the book as well.

What will I be doing instead? Running a basketball court with Littlest Scholar, except I'll be wearing stripes. For some reason the whole story spilled out of my mouth during the show Saturday, one of my crappier moments of radio. Just a couple of moments of brain freeze from what was otherwise a fun show. Captain Ed and I had a debate about whether China or Russia has Iran's back over the nuclear thing. Unsurprisingly, I'm the Russia guy. We'll lay off that for a day, let Ed soak up the Steelers win, but I'd like to get to a discussion of the Great Game politics between Russia, Iran, and the south Caucasus.

If there's another post today, I'm not as busy as I thought I'd be.

Friday, January 20, 2006

Students lack the skills we don't teach 

My mechanic got rich yesterday when Mrs. S's car came back with a repair bill over $1300. Some of it is because the car is as old as Littlest Scholar, and some is because Mrs. S isn't all that interested in assuring her car's maintenance. I have no useful skills in the manual arts; I believe in specialization and exchange, which means I get to teach an extra course or pick up a consulting contract, and with that money pay my mechanic to specialize in his comparative advantage. But, my mechanic says, how can someone as educated as Mrs. S not pay attention to an oil light or a maintenance schedule?

I say education has little to do with it. And reading this article that college seniors lack literacy skills, I wonder what people think a college degree actually creates.
More than 50 percent of students at four-year schools and more than 75 percent at two-year colleges lacked the skills to perform complex literacy tasks.

That means they could not interpret a table about exercise and blood pressure, understand the arguments of newspaper editorials, compare credit card offers with different interest rates and annual fees or summarize results of a survey about parental involvement in school.

The results cut across three types of literacy: analyzing news stories and other prose, understanding documents and having math skills needed for checkbooks or restaurant tips.
Three of the four tasks on that list are quantitative; it doesn't surprise me much at all in a world where math is de-emphasized in universities' general education program. (I must be geting crotchety in my old age to think students in college should all take college algebra.) The study makes clear that no more than 30% have even basic quantitative literacy, like being able to look at a menu and figure out the cost of a sandwich and a salad sold separately. An older NAS study shows that only 10% of schools surveyed had a math or quantitative general education requirement that had no exemptions by 1993 -- over half had none whatsoever. And the courses taken now as the math requirements are set even below finite math (a precursor to college algebra that was in my high school in the 1970s the course the freshmen got). The same is true with the natural sciences. Most problematic is that students who are not in the sciences or in business often are given options for math-lite.

Note to parents: If you want your children to be in the share of students who are quantitatively literate, send them to schools with rigorous general education requirements in math and natural sciences, particularly if your children intend to major in education or the arts or social sciences. They won't get it otherwise.


Thursday, January 19, 2006

The Ward Churchill people should take note 

Ever-reliable Jim Paine continues to cover the proceedings of the Ward Churchill Investigating Committee. The committee contains faculty with the same ideological biases that Churchill has, Jim says. He may want to notice how a committee that conducts impartial investigations can work. At the University of North Dakota, a music professor and choral director who claimed the university wanted to fire him because he is gay tendered his resignation yesterday after a faculty committee investigating university charges recommended his termination. The Chronicle of Higher Education (subscriber link) provides some pertinent details:
A report the panel issued this month said Mr. Reeves [the faculty member investigated --kb] had focused his recruiting for the music program on top choral students and, in the process, had alienated other students who were not as talented. The report said he had also improperly charged personal purchases on a university credit card, although it noted that he had reimbursed the institution.

Finally, the report said that on a trip to Europe with choral students last summer, Mr. Reeves failed to adequately help a student who had lost her passport or to prepare choral students to sing a cappella.

The report did not mention an earlier allegation that Mr. Reeves had gotten drunk during that trip but said that "all too often," he came "perilously close" to engaging in conduct that impaired the fulfillment of his responsibilities. The panel cited Mr. Reeves's "inability to recognize what is considered acceptable and unacceptable personal behavior for a faculty member of the UND community."

In his resignation letter, Mr. Reeves said that "although I continue to enjoy great support from the majority of my colleagues, from many people in the community, and from an overwhelming majority of my students, the conclusions of my colleagues ... have led me to believe that it would be institutionally divisive ... to attempt to continue at UND."
That's how you do it, people. A professional hearing of his peers (though the CHE article has statements from Reeves' lawyer claiming the hearings were sloppy and did not provide due process, which is for a court to decide) led to a conclusion that had integrity in the eyes of the faculty member accused, and that faculty member did the honorable thing as a result.


Bounty hunting 

A website of conservative UCLA alumni has been created to expose radical professors at UCLA. And it's decided to offer cash to students who help get the goods on liberal faculty. This organization is the brainchild of Andrew Jones, a UCLA graduate who wrote about his own experience with a UCLA professor who was, in another student's words, most close-minded professor I know, which affects the grading a lot!"

We have means already for students to discuss issues of bias, and to have someone independently evaluate the claims. Noindoctrination.org is one such place (and has five entries for UCLA). I certainly support paying someone for providing something of value, but alas the payment in this case will be seen by those who oppose any openness of classrooms to be a bribe to engage in a witchhunt, no matter how many disclaimers this alumni group offers. A Chronicle of Higher Education article (subscriber link) shows the line of attack taken:
The association has already drawn criticism from some UCLA faculty members, including Peter McLaren, a professor of education who ranked No. 1 on the group's "Dirty Thirty: Ranking the Worst of the Worst" list.

"This Web site offers nothing but name-calling," said Mr. McLaren, who insisted that he is tolerant in the classroom. The Web site says that he "teaches the next generation of teachers and professors how to properly indoctrinate students."

"This is a McCarthy-like kind of smear," said the professor. Asking students to "serve as spies," he said, is not only antagonistic and pernicious, it's also "un-American."

Lawrence Lokman, a UCLA spokesman, said the university supported Mr. Jones's right to free expression. However, the university plans to contact Mr. Jones to let him know that students who sell course materials without the consent of both the professor and the campus's chancellor are breaking university policy. UCLA plans to communicate that policy to students as well.

UPDATE: I mostly agree with Kieran Healy and Eugene Volokh. Bainbridge agrees that the payments are unpleasant and unproductive.


Wednesday, January 18, 2006

The cost of "acting white" 

I recall reading papers about how having "white" names was supposed to help the earning power of people of color. But "acting white" in school -- in terms of being in honors or AP classes, speaking proper English or dressing the wrong way -- can cost a high school kid friends.
The resulting popularity indexes demonstrate that "the relationship between social status and achievement is categorically different between racial groups, a difference that is robust to changes in specifications, data sub-samples, and definitions of social status or achievement." At a GPA of roughly 2.5, racial differences begin to emerge, and Hispanic students lose popularity rapidly.
Popularity peaks at a GPA of about 3.5 for black students. Whites continue to gain popularity as their grades increase. The social cost of "acting white" is more severe for black males than for black females. It is larger for blacks in public schools, but nonexistent for blacks in private schools, "a finding that may partially explain why black kids in private schools do especially well." Finally, the burden imposed for "acting white" is greater for students with more interracial contact. Blacks in more segregated schools "incur less of a tradeoff between popularity and achievement." The toll for "acting white" is "particularly salient among high achievers and those in schools with more interracial contact."
Here's the paper if you're interested.


More bang for the public ed buck 

According a new report, there is no correlation between the amount of money spent on public higher education by states and those universities' academic performance.
Discussions about funding in most states usually leave evidence about the overall adequacy of public-institution funding off the table. As a result, in times of decreasing state appropriations, institutions often attempt to offset revenue shortfalls by simply raising tuition and fees. In response to the question of 'how much funding is needed?' the typical answer of 'more' or 'as much as our peers' leaves out all consideration of performance and affordability to students.

There is also no evidence of correlation between spending on higher education and economic growth. Philip Trostel argues that there's a Say's Law of college graduates -- an increase in the number of college degree-holders in the workforce creates demand for more high-skilled workers -- but even then, a 10% increase in state spending on higher education may lead to only a 1% increase in college graduates, because the money isn't targeted to just marginal students (meaning here students who otherwise would not attend and graduate). What this new report adds is that there are systems spending public education dollars inefficiently. Alas, the report declines to identify which states.

(Source: Chronicle of Higher Ed, subscriber link.)

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Your usual semester eve foo 

Within the last twenty four hours we find the intrepid department chair having to (1) sit in two search committee meetings, (2) a dean's advisory council meeting (better known as "dean and dummies"), (3) sign up two majors, (4) cancel a class which was full but has nobody to teach it (expect calls for my head around 9:40am tomorrow) and (5) find out Mrs. S's car needs $1200 worth of repairs. She has my car right now; I'm stuck here unable to get a beer to drown my sorrows.

This guy had a worse day, but he had beer. (Boxers?)

Tuesday, January 17, 2006

A note to Commissioner Hewitt 

Hugh, I need a favor. The next time you interview Governor Bill Owens, please read back to him his state of the state speech:
We also need to make sure that we have outstanding faculty at our taxpayer-funded institutions of higher education. There are currently no statewide standards for the college tenure process-not even recognized minimum standards.

Let's see to it that tenure is given only to those truly qualified professors who deserve such recognition. I plan to work with the Commission on Higher Education to establish a basic threshold for tenure common to all state schools.
Dumb, dumb, dumb. The state has no ability to determine who should get tenure in one department or another. What makes tenure for an economics prof differs from that for a music prof, which differs from that for a historian, which differs... well, you get my point. Governor Owens looks like he's grandstanding on the Ward Churchill controversy. What he needs to do is put the University of Colorado's feet to the fire and have real professionals determine if Churchill committed academic fraud. Have it done with integrity, and let professionals deal with their own profession with the same integrity. Would you be so kind as to question him on this piece? I'll tape it and respond when I get it. Maybe I'll even save Duane's fingers.

Thanks, Hugh. I knew you'd see it my way.



UW policy kicked down the road 

The University of Wisconsin seems intent on picking a fight.

The University of Wisconsin committee charged with making recommendations for a final, system-wide policy on whether RAs should be allowed to lead Bible studies in their dorms put out its Resident Assistant Working Group Final Report late last week. The committee�s recommendation: each school in the UW System should make the decision for itself.

This arises from the UWEC ban on RAs leading Bible studies in their dorm rooms, and while it seems to be a rather evenhanded claim, FIRE says the UW system is acting foolishly:
The Report suggests that UW�Eau Claire and UW-Madison, both of which currently
prohibit RAs from leading Bible studies in their dorms, be able to maintain their unconstitutional, repressive, and highly unpopular practices of intruding upon the personal lives and private domains of religious RAs.

I.e., they punted. If the president of the system thought he was going to get to hide behind a committee, he thought wrong.

MOBster Gary Gross has additional commentary.


How much choice is enough? 

Matt Abe and I were in a discussion about this with Flash and one other blogger whose name I will forget and feel bad for ... until now. Matt reminds me of this again with his post on the Stossel special on education.
It's well worth noting that Minnesota is a national leader in school choice, with charter schools (they were invented here), open enrollment (students are free to enroll outside their district; 30,000 Minnesota students did so in 2004-05), online learning, homeschools, post-secondary enrollment options (PSEO), and more. Stossel should visit Minnesota for a follow-up ...

Matt thanks Craig Westover, who also posts about these issues and distinguishes between varying delivery of public-provided education and public-financed, privately-provided education. Both Craig and Matt oppose No Child Left Behind, but Craig's concern is that it's harming higher achievers:
A voucher system targeting low-income families, allowing them to escape schools not meeting their children�s needs by attending private schools -- secular or religious -- is not an impediment to high achievers. It simply provides choice options to low-income families approximating those of the modestly well-to-do. Closing the achievement gap is important, but it needs to be done by skewing the bell curve to the right, narrowing the deviation about the center of the curve and pushing the �average� student towards the high achievement tail of the curve.

I would be happy to start a voucher program by focusing on low-income families; indeed, that has been the means to successful starts in Milwaukee and Cleveland, but what happens is that it stops there. The poor even fight to keep well-off families from gaining the same rights. The rich, Craig may argue, have always had choice; yes, I reply, but saying that means that school taxes are simply redistribution. I think you want to avoid that suggestion.

But in the list Matt offers we have public school choice -- i.e., pick which flavor of monopoly provision you want -- charter schools, which is a private school only in the sense of having a residual claimant on revenues but is compelled to take any student at a fixed price, mixed with online courses and homeschools. I would dare say that is not enough choice, as it does not provide sufficiently for private provision of publicly funded education.

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Students shopping 

A colleague sends around the university by email today a notice sent at the Univ. of Minnesota that students are being invited to visit Pick-A-Prof to determine who to take for their classes.

Pick-A-Prof has posted the number of A-F's given by professors at University of Minnesota, Twin Cities and lets you compare the grade histories in the courses you are about to register for. That means before you register you can look up the courses you are thinking about taking and see the number of A-F's professors historically give as well as their DROP RATE - straight from the official University of Minnesota, Twin Cities records.

For example, if you are interested in taking a Math course, Pick-A-Prof will tell you who is teaching it next semester at University of Minnesota, Twin Cities and what they historically give in that course.

Pick-A-Prof has tons of reviews from University of Minnesota, Twin Cities students. That means you can learn WHAT IT TAKES to make the grade you want using other student's reviews with information including:

  • Exam Type
  • Homework Load
  • Lecture Style
  • Attendance Policy & More

NEW! - Discussion Boards Pick-A-Prof Discussion Boards are a place online for students to search for an answer, post questions, or answer other student's questions. They are a student-to-student support forum that enables anyone who uses Pick-A-Prof to discuss various class topics, ask questions about homework or projects, and get tips and advice about the courses you are taking. You'll find a wealth of information about courses that will help you get the most out of your classes and help you get the grades you want.

Shopping for professors has been around forever, of course -- in dorms, fraternities and sororities, at nearby coffee shops, etc., there has always been a desire to find out the "gut course" and the "easy A". The thing the internet is supposed to do best is to disseminate information, so it makes sense to me that Pick-A-Prof exists. And I'm not bothered either by someone creating a website, driving eyes to it and selling ads on it, particularly when I do it here myself. And I'm not sure other faculty would be bothered by this search for an easy grade either. (My colleague who sent it to the campus had as his subject line simply "Sigh".) It's discouraging, but it's hardly a surprise.

So why does this bother faculty so much? I suspect the biggest issue faculty have with it, as well as with online professor ratings/evaluations, is the same "gatekeeper" issue that others (such as Saint Paul or the folks at Oh That Liberal Media) are discussing about blogs versus MSM. Does the market for information work well enough in these discussion areas that the one student who had a computer failure cause her to miss a homework assignment, and who blames it all on Prof. X, cannot pillory Prof. X over and over in the discussion area and create the impression that Prof. X is a bad prof?


Monday, January 16, 2006

Online and upward 

I question whether students prefer online classes. I just finished using Aplia with a principles of macroeconomics course and student reaction was about 50-50. Aplia is class management software with two great features to me: First, it provides some cool real-time experimentation. Students loved that. But it also provides a rather substantial set of homework assignments for students to do. Now my students keep complaining that they "want more homework", which my colleagues and I agree is code for "we want some easy points." Not an opportunity for points, just something that says "click here and here and watch your grade go up!" Nationally-normed homework assignments are likely to not do that for students at places like St. Cloud State. The questions are not easy. So while I like it, the students don't.

But the article is correct that online classes and traditional classes with a lecture component are not all that different, which creates a problem for universities:
They are reluctant to fill slots intended for distance students with on-campus ones who are just too lazy to get up for class. On the other hand, if they insist the online courses are just as good, it's hard to tell students they can't take them. And with the student population rising and pressing many colleges for space, they may have little choice.

So universities are trying to manage the flow of students into online classes. In the department's distance offerings we have a GPA minimum that we do not use for the traditional sections, because we find students aren't as motivated naturally by online sections.

Two-thirds of schools responding to a recent survey by The Sloan Consortium agreed that it takes more discipline for students to succeed in an online course than in a face-to-face one.

"It's a little harder to get motivated," said Washington State senior Joel Gragg, who took two classes online last year (including "the psychology of motivation"). But, he said, lectures can be overrated -- he was still able to meet with the professor in person when he had questions -- and class discussions are actually better online than in a college classroom, with a diverse group exchanging thoughtful postings.

"There's young people, there's old people, there's moms, professional people," he said. "You really learn a lot more."

And that's my one suggestion for these courses for next time: If you can give them a chat area or some place to interact with the instructor and each other (I think it should be something other than email), this is a big help. That's been the suggestion I've made to Aplia, which has no chat or bulletin board area.

(h/t: reader jw)


It was no accident 

Crossposted at The Sports Economist:

Was it an accident that Jackie Robinson was picked by the Dodgers to break the color barrier in professional baseball? Reflecting on the new movie Glory Road, about the integration of the basketball team at Texas Western by Don Haskins who won a championship and broke the color line in collegiate basketball in the South, HedgeFundGuy makes a point that discrimination creates an opportunity for those who will not:
...when discrimination is at work, there's an opportunity. If the truth diverges from conventional wisdom, it's better to take advantage than lament. The West likes a winner more than anything else. As unfair as life is, it is still ultimately meritocratic more than ever before, and much more than many believe.

Texas Western at the time Haskins took over was not a collegiate power, and not even a very good team. It was his first job after three good high school programs, and as he says in this interview in November he was just trying to win the game, not to break down barriers. The responses to these three questions are fascinating:
We all look now and see how important that game was. Did you realize it at the time?
We hadn't played in the Deep South, that much ... well, none. We had played teams in the Midwest and in the Southwest that had a black player or two, although not all five. It wasn't that big a deal. Of course, I'm looking at Duke and Kentucky with Moe Iba, my assistant, getting ready to scout the game [at the Final Four]. I had Moe, who was a lot better scout than me, take Kentucky, and I took Duke. We both made comments about it looked kind of funny seeing two teams that were totally white.
Did you have any second thoughts about starting five black players for the title game?
Not really. No. I was trying to win.
Did you get any reaction after the title game?
That's when I first realized that this wasn't just a game. I was young, and I wasn't thinking. The hate mail started coming in by the baskets. One person wasn't enough to open them. Finally, I got really, really frustrated. I doubt that there's anybody that has ever won a national championship was more down than I was two weeks after it was over. ... A lady in our office said we must have gotten 40,000 letters. Of course, they were all from the South. Normally, crudely written [and] all starting with "N-lover." The ones that bothered me the most were from several black leaders that we had in the country in 1966. They were nicely written, but they said I was an exploiter.

So was Branch Rickey an exploiter? In the way I think the letters to Haskins from black leaders put it, yes. They were judging Haskins' motives -- he was just trying to win a game. That it opened up a new frontier for collegiate athletes was immaterial. Branch Rickey put Jackie Robinson on the Dodgers because the Dodgers were a bad team and Rickey saw that Robinson could help his team win. As Gwartney and Haworth showed more than thirty years ago, those baseball teams that integrated first had a competitive advantage in the 1950s over those that did not (the last was my beloved Red Sox, contributing to their 86 years in the wilderness).

The point being this: If you have a taste to discriminate, markets make you pay for your taste. We want people to do not discriminate because they are enlightened, but putting a price on bad behavior doesn't hurt.

CORRECTION: One commenter thinks "bad team" is too strong to describe the wartime Dodgers. I will grant their record was fine, but they didn't win championships, and their attendance wasn't all that good for a team in New York. They wanted to grab headlines, and Jackie helped.

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A football note 

I didn't get to see much football -- my Saturday night choice was watching Denver-New England or going to a reception at the Armenian Embassy. I chose the latter, and the company was good though the wine could have been better. (Why not Armenian wine, I asked?) However, I was checking the score on the Steelers-Colts game as I finished the session mentioned below, went to get my bags from the hotel and headed to my plane home. Like Captain Ed, my brother is a huge Steelers fan. Standing in the bar at Reagan National airport when Peyton Manning was sacked on 4th and 16 I thought it was safe to call him. His daughter answered and said Dean was running to the refrigerator first. Just then Bettis fumbles, and I instinctively hung up. After Vandershank missed the FG (why do I hate that guy? I don't know, but I hate that guy and he deserves a Scott Norwide nickname) I rang back. Dean grabs the phone and says to hang on. Next thing I hear is a champagne cork pop. "I was trying to get it when you first called, but we almost had a Red Sox moment there." Ouch!

(A colleague comes in this AM and says, "Told you Mannings never win. You guys should trade Eli.")

What color is your revolution? 

MLK day in my schedule is the day I begin transition to spring semester. It's also the end of the mid-year conference season. Blogrel notes the conference I was at this weekend. (Blogrel is, in case you didn't know it, the best Armenian blog. Those containers on its banner are two of my favorite foods of Armenia, madzoon and tahn. Can't get them in MN.)

One of the sessions discussed the formation of civil society in Armenia, and I thought it was the most interesting part of the conference (that I saw -- I had to leave before the last two sessions of the afternoon.) Here's one of the papers, presented by Armine Ishkanian of the London School of Economics. One of the points she makes is the relationship between non-governmental organizations that have been formed throughout the xUSSR and the "color" revolutions in Georgia, Ukraine, and the Kyrgyz Republic. At Registan, Nathan points to an article by Mark Katz on central Asia and its revolutions, and provides a useful dose of skepticism about lessons to be learned from these revolutions.

I have a hard time accepting the characterization of the Tulip revolution as being a wholly democratic revolution. It would be much more accurate to say that the fact that the Tulip revolution took place in Kyrgyzstan suggests that the middle class (or whoever it�s most accurate to say carried out the bulk of protesting in Kyrgzstan) would support their patrons, as most of the protesters out in the regions did not seem nearly as interested in carrying the torch of liberty and democracy as they were in making sure their candidate made it into parliament. As much as the apparent increase in the chances for state collapse across Central Asia in the near future gives reason to worry, so should the fact that the Tulip revolution�the outcomes of which should largely be considered a result of state collapse rather than the realization of protesters� wishes�indicates that support for patrimonialism/clientelism in the region is more natural than it is for democracy.

I think one should be skeptical of exporting any revolutions. The opposition in Azerbaijan wanted to jumpstart an "orange revolution" in advance of elections there, but planning for protests post-election may have in fact led to their failure. A vibrant civil society cannot make a revolution happen, but it can provide a network of the middle class able to organize quickly should the opportunity arise. Orange is different than Tulip insofar as it had a broader group of NGOs to work with, but shares the characteristic that a government appeared too illegitimate to continue. It's what happens after that realization becomes part of the national consciousness that makes Orange, Tulip and Rose distinct. While Nathan is right that Kyrgyzstan's revolution was about switching pashas, both of the others had groups already organized around principles of advancing democracy (in Ukraine, freedom of the press was crystalized by the Gongadze killing; in Georgia, a combination of corruption and a leader who was believable in combatting it.) There has to be something that steps in to the vacuum, or that can sustain momentum when an opening arises, but these groups -- which, we were told yesterday, employ many in the middle class who lost work in transition -- are unable to generate a revolution on their own.

Not that Russia is waiting around to test my theory. Andrei Illarionov, the Russian advisor to Putin who quit in the middle of the Ukrainian gas crisis last month after being gagged by Putin, said in a Time interview:

TIME: What is your view of Russia's political scene today? How meaningful or symbolic is the new legislation restricting NGOs?

Illarionov: I see the reduction of the volume of political freedom, more restrictions clamped on political parties, the media, public expression�all this is obvious. The trends that have been long accumulating, found their completion and finally shaped up in 2005. That Freedom House report I mentioned came six months ago�nobody in Russia has even tried to deny it officially. Now that Russia has passed this new law restricting NGOs, I think it will push Russia's next year rating even lower.

Freedom House has its own commentary and a report I recommend.

Saturday, January 14, 2006

Free riding on the road 

I'm sorry to be away again, but I'm in DC for the AIPRG conference and not able to blog very much because I get to see old friends at this one (unlike interviewing last weekend in Boston.) I'll be back to blog on Monday, and still have three more days before the end of break. I bet Doc Palmer wishes he wasn't in class already.

I mean, $100 Canadian? Jeez, I value my hair more than that.

Thursday, January 12, 2006

Costs are always costs to someone 

That title is a line I've used in introductory classes for years (I don't know if I swiped it from Heyne's text, or some flavor of Alchian and Allen, Buchanan, or where. I know I didn't invent it.) One of my training mechanisms for my students is to give them a quote from a news article that says "the costs of X are $YYY" and then ask them "whose costs are these? Why is this article written this way?" Part of it is an appeal to "science" (say it in your Mister Science voice), that we have some objective measure of what X costs, and that enough experts sitting around a room can agree a number that X costs that will be called "the true cost". But costs are actually quite subjective. What is the cost of living in Minnesota? "Whose costs are these?" It depends on tolerance of cold and mosquitoes, love of hockey, preferences for plains or mountains or oceans, one's career choices, origin of spouse, etc. My cost and your cost are not the same.

HedgeFundGuy discusses the Bilmes and Stiglitz paper on the costs of the Iraq war. Referring to the paper as if it was only written by Nobel laureate Joseph Stiglitz,
He ignores any benefits accruing to Iraqis, and in fact proudly notes he did not count the Iraqi's costs. But this is really the crux of the issue. For example, one could also argue this war will lower oil prices in the long run because it has set a limit on how much mischief a wealthy oil state can create.
Why should the U.S. care about the costs to Iraqis, though? Obviously Stiglitz thinks these costs do not count. Were they to count, HFG explains, the U.S. might indeed find the costs not nearly so large.

You fight to protect assets, but you also must align this with some principle, such as liberty or democracy. This may seem a mere pretext, but in fact it is essential. If liberty or democracy is a principle and the malefactor is taking your stuff, you fight because you can sell it to your voters--the long term benefits of principles are generally large, and the short run benefits of protecting one's assets are also large.
This is to say that there is a cost to having democracy not advanced and spread. It dispirits your potential allies and emboldens your enemies. It cuts down on your ability to trade with your neighbors. (For example, see this wonderful story Margaret tells of the coffee wars of Venezuela. I cannot wait for the "no blood for latte!" chants on our campus.) Robust democracies tend towards free trade. You can choose to recognize these costs or not, these benefits but not those depending on what conclusion you wish to draw.

If principles are worth fighting for, surely most of the effects are long-term, large and accrue mainly to whom we are fighting. For example, the net present value of avoiding Nazism was very large, and accrued mainly to Europe, not the US. Thus by ignoring benefits that war proponents articulated (eliminating a threat before it is imminent, humanitarian relief, enforcing UN resolutions, democracy in Iraq, securing Iraq's oil) Stiglitz assumes this war had no valid principles, in which case his conclusion on the cost-benefit axis is preordained.
UPDATE: Tyler Cowen says about as much, and says only the lower end of their estimate is valid. Again, it depends on whose costs you count.


Education Minnesota writes bad surveys 

Andy is a little peeved about Education Minne$ota spending a million bucks to "listen to the people." I see they have a feedback form! I think this is a perfect opportunity to tell EdMN what you really think. I'm no expert on survey writing, but questions on funding having the choices "more than adequate", "adequate", "barely adequate" and "inadequate" would seem to me a little slanted towards finding (surprise!) not enough money. The words "too much" would have been nice.

Or, try this:
Minnesota has had among the highest standards in the nation for individuals to become public school teachers, which include completing a state-approved education program in college and a rigorous licensing process. Should we maintain our current high standards for prospective teachers or lower them?

"Um, gee, let me see here. Yes, I want lower standards." No option to raise standards. No option to say "we need different standards".

The survey's last question asks for biggest challenge facing your local public school. Again, surprise! there's no choice of "arrogant, grasping union". I invite readers to visit the survey: They really want to know what you think, so tell 'em!


Carte Blanche 

This comment from Heather MacDonald's review of law school clinics yesterday would sound perfectly normal in places like the Department of the 3.7 GPA.
Florence Roisman, a housing rights activist at the Indiana University School of Law, has inspired clinicians nationwide with her supremely self-confident call to arms: "If it offends your sense of justice, there's a cause of action."
Of course, this bobo shows up to argue that Sam Alito is out of the judicial mainstream. But to think that anything that offends your sense of justice should be illegal is high on the list of the Visions of the Anointed.


The low cost of intellectual diversity 

A second day of hearings in Pennsylvania on the question of liberal bias in its state universities took place Tuesday. The Chronicle of Higher Education (subscriber link) reports some highlights of a day that went better than the first, and for the second day running manages to miss some key points. FrontPage has a copy of the testimony of Temple English professor Steve Zelnick. In it he describes a political rally disguised as a "forum" titled "Dissent in America", the real purpose of which was to attack anyone that would question, well, the right of these campus radicals to hold their "forum". Having had speakers already pillory NAS President Stephen Balch, a student "asked whether Balch was part of the same movement that asserted intelligent design against real science and was assured by the panel that it was all of one piece." Nothing could be further from the truth, and if anyone had been there to provide intellectual diversity to this "forum", they might have heard as much. Moreover, when a letter writer to a local newspaper supporting the hearings, she was called out by the spokeswoman of the Temple Women's Study Program to identify her husband. Prof. Zelnick writes,

I trust this group would normally find such a demand abhorrent. But perhaps where group advocacy is involved, standards of truth and value are secondary to the end in view. This style of combat represents a powerful problem for an institution of learning and honest inquiry.
None of this made the Chronicle story. The Philadelphia papers, by my Google search, do not report any of the second day of testimony.

Anne Neal, president of the American Council of Trustees and Alumni, provided in my view the best testimony of the day. She emphasized the recent study ACTA published (I reported it here) in which 49% of students at the top 50 schools "said their professors frequently injected political comments into their courses, even if the comments had nothing to do with the subject." See Appendix A of that last link for additional survey questions, 29% strongly or somewhat agreed that "On my campus, some courses present social and political issues in an unfair and one-sided manner" while the same percentage felt "
they have to agree with the professor�s political or social views in order to get a good grade." This from a sample where only 13% of students described themselves as conservative, and only 11% of students were majoring in political science. (10% were in biology and 8% in engineering.)

In comments on Tuesday's post on the first day of the Temple hearings, "Junior Bear", a Temple economics major, related how this matters: He's retaking a class.

I only did about half of the assignments and failed to turn in the other half simply because I could not stomach the topics I was instructed to write about. I was expecting (for some reason) a more traditional final exam to save my grade. I had no such luck.

The final exam was a take-home 12 page take-down of Walmart. In the last class of the semester, the professor played the movie "The High Cost of Low
Prices," to help with the assignment ostensibly.

While I claim that my low grades on a few of the papers I indeed turned in were due to the contentious nature of my writings--I couldn't help myself--there is not much here to hang a charge of restricting my free-speech rights. However, I do accuse the professor of poor taste.

He's too kind. I think the professor is guilty of exactly the bias addressed by Zelnick, Neal, David Horowitz and others. There was every opportunity to provide balance in the form of an alternative film that would have shown WalMart in a more positive light. Why not? How much effort does it really take to provide some balance?

In her full remarks in hearings Tuesday (which ACTA has posted) Neal noted the American Council on Education's statement last September that they were going to do something about intellectual diversity, but that her group's survey of 30 signatories found not one instance of action on the statement.

Why, then, is it so hard for universities to take similar steps when it comes to intellectual diversity? Our colleges and universities are filled with offices and administrators whose entire job is to foster a diversity of backgrounds�on the grounds that a diversity of backgrounds will provide a diversity of viewpoints essential to a strong liberal education. If diversity of views is the educational holy grail, then what is the academy afraid of?

You and I have heard or read the testimony of a number of peakers already in the course of these hearings and, quite frankly, they are simply in denial that there is a problem. They have said, in effect, that they are not going to do anything. Bob O�Neill said yesterday continue to trust us. You have to make it clear that this is not acceptable. It would not be acceptable if they problem were racism; it would not be acceptable if the problem were gender discrimination. It is not acceptable when the problem is political harassment and viewpoint discrimination.

UPDATE: I read that Horowitz' own testimony went poorly. I have never advocated for ABOR, and having watched Horowitz in action I will attest that his methods rely on a good bit of bombast. He's not the best representative for the cause of intellectual diversity, but we already knew that. This cause is too important to have it tarred by Horowitz' inaccuracies in his testimony; he needs to make clean his record by documenting all those stories of liberal bias he claims to be true, or retract them.


Tuesday, January 10, 2006

Slant away 

An aggravating part of reading The Chronicle of Higher Education's coverage of the hearings before the Pennsylvania legislative committee investigating abuses of academic freedom. Shockingly, it's hard to find students and professors on a college campus in January. The Philadelphia Inquirer is also so surprised. Yet the one student that does go is blown off because he didn't file a formal complaint.

Temple senior Logan Fisher, vice chairman of the school's College Republicans chapter, offered several vivid examples of what he considered classroom bias, alleging that a few professors vulgarly insulted President Bush in their lectures. Fisher also said a professor told him, "You're going to have a rough semester in this class," after Fisher disagreed with him over a foreign policy question.

Fisher also said he had spoken with many students who had similar experiences.

Asked why he and the other students never filed a formal complaint, Fisher said they feared retribution and felt their grievance would be ignored.

And what does the Chron lead with as the story? The president of Temple saying he's not heard a complaint. Well, isn't that the reason we're having some hearings? As the student was reported to have testified by Students for Academic Freedom,
my testimony today will not only contain my personal experiences, but that of many students who are afraid to testify, for fear of repercussions to their academic careers. As a vice-chairman of the Temple College Republicans and Vice-President of the Temple Chapter of Students for Academic Freedom, I experienced first hand the apprehension students had to testify today, as they expressed to me concerns of retaliation by professors and fear of being singled out in their classes in the future.
The reporting of this in the Chron was limited to the last point, in the last two paragraphs.
Mr. Fisher, who is vice chairman of the College Republicans and vice president of Temple's chapter of Students for Academic Freedom, a national organization founded by Mr. Horowitz, said he had never filed a grievance against a professor who he believed had mistreated him because of his political beliefs. "I'm usually dismissed by the professor, so I don't feel that lodging a formal complaint would do much good," he said.


Dissertations are for PhDs 

A couple of papers referred to in stories in the Chronicle of Higher Education (both links below are for subscribers only) tell a couple of stories about economists and training of PhDs.

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Overpromising Turkmenbashi, underfulfilling Yekhanurov 

This would be double plus ungood for Ukraine. Upset with the fact that the price of gas has risen, the Ukrainian parliament has sacked the cabinet. It's not clear if the decision is valid, as the constitutional changes agreed after Yushchenko's election have changed the Verkhovna Rada's power to dismiss a government.
Opposition leaders complained the price for gas was too high for its industries and will eventually pinch private consumers. They also said the deal gives Russia too much leverage over gas imports to Ukraine and endangers Kiev's energy security.

...Opposition lawmaker Nestor Shufrych, of the Social Democratic Party (United), acknowledged that the parliament's resolution had no legal power.

"Yes, we know that we cannot dissolve the Cabinet ... we are familiar with the Constitution," Shufrych told reporters.

"We deprived the Cabinet of the opportunity to make decisions," he said.
Yushchenko's press secretary calls the decision politically motivated and Yushchenko calls it unconstitutional, while Prime Minister(?) Yekhanurov says this will harm his ability to finish the contracts negotiated last week.

Meanhile, Daniel Gross notes a story that Turkmenistan may not have the ability to fulfill the contract it agreed with Russia and Ukraine. I don't think it's any accident that this comes out simultaneously to Yushchenko traveling to Kazakstan to seek more gas, and for transit of Turkmen gas to Ukraine (which would have to move in part through Kazak pipelines.) The Moscow Times suggests Kazakstan is part of the mix:
Before Monday, investors were scratching their heads over how the gas from Russia and Central Asia was mixed to give Ukraine an end price of $95 per 1,000 cubic meters.

But the leaked document explains much about the deal. The Gazprom source confirmed the details in the document.

According to the contract, Rosukrenergo is to buy 41 billion cubic meters from Turkmenistan and up to 15 bcm from Kazakhstan and Uzbekistan. Only 17 bcm is to be bought from Gazprom at $230 per 1,000 per cubic meters. In total, Rosukrenergo will have 73 bcm.

While Ukraine consumes about 80 bcm annually, the country produces 18 bcm to 20 bcm, so it needs to import only 60 bcm, ...

Under the current deal, Rosukrenergo will have 10 bcm to 15 bcm to play with, ...
The price in Europe is currently about $280 per 1,000 cm. That's pretty much what they can do with all the Russian gas purchased at $230. And the money is going to "unknown beneficiaries". Perhaps a few Russian or Ukrainian officials?

UPDATE (10:30pm): I finished reading Robert Mayer and think there are two things to be explained. First, as best I can tell the sacking of the cabinet is unconstitutional. The New York Times takes that view in tomorrow morning's paper. With the elections for the parliament (Verkhovna Rada) coming in March as agreed when Yushchenko came to power, there was negotiated a period of standstill (the infamous Law 4180 -- and see the very bottom of this document governing those changes). As we saw in 2004, predicting the behavior of the Constitutional Court is a tough slog. Meanwhile a new report suggests some parliamentarians want Yushchenko to take direct control of the government and dissolve the Rada. That might explain why some of his own party's members sat out the no-confidence vote on Yekhanurov.

Second, it's worth noting as I said before that the present deal upsets the pre-existing equilibrium of bribes and kickbacks. Rosukrenergo is a new player, and using it redistributes the rents involved in this deal. (This is also why, I think, the present deal is really only for six months, as Scott Clark reminds us.) Stefan Korshak notes the presence of Tymoshenko's hand, which sounds plausible. She likely had a stake in the status quo ante January 1.

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Monday, January 09, 2006

What lenses do you wear, and how do they fit? 

I have been thinking about Don Boudreaux's post for four days.
...it's interesting how ambiguous even seemingly unambiguous pictures and charts and graphs and historical anecdotes become if you look at them critically, trying your best to see in them not what you want to see but what someone with a view very different from your own wants to see.

I'll not here allow myself to get sucked into the black hole of methodology, save to express agreement with Deirdre McCloskey (and here I paraphrase) that no one was ever convinced by raw data of the truth of a proposition that he or she did not already hold to be true. Data are important, but the theoretical filters in our minds are no less so.

I think though that economists are less prone to this than others though. This is because economists like to deal in ironic arguments (go ahead and click this and hum away.) I was comparing notes this weekend with an interviewee, an applied econometrician who takes particular pleasure in showing how statistical results presented in published research do not show what they think because they did not understand the estimators they had created. I suggested this person isn't the most loved person in the seminar room, sitting in the back and poking big holes through someone's conclusions. I remark the same thing, though what I do is look at data and how it's generated more than estimators.

So the data on employment last Friday comes out and, like the data on investment that Boudreaux looks at, can be treated as half-empty or half-full depending on who reads the same data. (That last link is a pretty good reading to me.) The answer to me, as always, is that statements about the future are inherently probabilistic. I don't see anything that changes my priors to what I already believed. You might say my Bayesian priors were tightly distributed.

And here's what bothers me: If Boudreaux saying that we all walk around with tight priors -- that we are quite certain of the views we currently hold, so it takes a 2x4 to get us off that dime -- how is it we come to those priors? I believe that's the job of a well-rounded education, to provide each educated person with enough received wisdom so that what we believe is based on roughly the same information set. Reading at the suggestion of my NARN brethren Richard Miniter's Disinformation Wars on the plane today, I questioned whether that was true. Miniter writes discussing the myth that Osama bin Laden has kidney problems:
It is also possible that reports are simply talking to each other. In different foreign locales, I've seen English-speaking reporters gravitate to each other and share their notes over drinks. This is, by and large, a healthy practice -- it helps scribes come up to speed quickly and cross-check what officials have told them.

But it contributes to pack journalism and helps explain why so many news accounts from, say, Islamabad, sound the same.
They sound the same in part because we don't have people educated as well any more. The present practice of universities saying to their students that truth is relative, and facts are contextual, allows them to have prior probabilities reinforced easily by repetition of mistruths.

This connects for me to an answer to this year's question of a "dangerous idea", and the answer that interested me comes from David Gelernter:
If this is indeed the "information age," what exactly are people well-informed about? Video games? Clearly history, literature, philosophy, scholarship in general are not our specialities. This is some sort of technology age � are people better informed about science? Not that I can tell. In previous technology ages, there was interest across the population in the era's leading technology.

In the 1960s, for example, all sorts of people were interested in the space program and rocket technology. Lots of people learned a little about the basics � what a "service module" or "trans-lunar injection" was, why a Redstone-Mercury vehicle was different from an Atlas-Mercury � all sorts of grade-school students, lawyers, housewives, English profs were up on these topics. Today there is no comparable interest in computers & the internet, and no comparable knowledge. "TCP/IP," "Routers," "Ethernet protocol," "cache hits" � these are topics of no interest whatsoever outside the technical community. The contrast is striking.
How much of what we know is wrong? That line from George Stiglitz bears constant reminder.


Travel day 

I'll have more after lunch when I reach MSP. Please come back then.

UPDATE: From Maui Tacos, the best food in MSP airport.
  1. Ed is watching the Alito hearings. I've got CNN Headline News on here in the bar, and it's 2:20, and they are still waiting for Alito to actually speak. I saw swim captain Kennedy a half hour ago. Luckily no sound (they're playing XM 80s here instead.) I read this in the plane this morning, and CNN just shows on TV now a two month old!!! poll asking if one would favor the Senate turning down Alito if he says he would overturn Roe. Of course, it gives the opposite reaction. What a pile of hooey.
  2. Phil asks if the meetings were a buyers market for schools trying to hire new professors. The quality of candidates this year was very good; particularly the first day, when I interviewed nine public finance scholars, I cannot recall having more fun talking to interesting people. I trust search committees to make the final selections, and all I can say this year is that they hard choices if our sample was representative.
  3. Dunkin Donuts!!!! Morning, noon and night, baby!
  4. Nana, forgive me for eating a place that says it serves 'Turkish food', but this was unbelievably good. My sister and her daughter and a colleague of mine went as well. Wicked good, as they say.

Friday, January 06, 2006

Folks in Ukraine ain't happy 

I have meetings until tonight, but want to point readers interested in Ukraine to this piece from this morning. I'll be back to discuss this tonight.

UPDATE (and restamped): OK, tonight is now. Powered by Dewars.

First, I'll pretty much stay away from the Russia-done-bad story. Yes, they harmed themselves with Europe. I think this is priced into the deal, as they got in return almost full control of Turkmen gas as I mentioned Wednesday. As well, doing the math with this deal, they reduced the amount of gas they send to Ukraine from 23 billion cubic meters to 15 bcm. The rest of the gas (and the subsidy) is Turkmen. Reading Tom Warner yesterday, that looks like a savings of $0.5 to $2 billion subsidy to Ukraine per year. The cost is shifted from Ukraine to Turkmenistan, so both Ukraine and Russia look good. A week of bad European press and a negative comment from the U.S. State Dept. might be worth it for a billion bucks a year.

("So what does Turkmenistan get?" I have no idea. Seriously. I've tried thinking about this for almost a week, and I just don't get it. If someone has an idea, you can tell me anytime.)

The Ukrainians were of course able to parlay their strategic position in the gas supply line to get a price for gas that is very good. (The Bulgarians seem to be taking a page from the Ukrainian playbook just now.) The impact on Ukrainian businesses and households is likely to be pretty mute -- residences will continue to pay subsidized prices and continue to be inefficient in the use of gas, while businesses will pay close to the price at which Ukraine gets its gas. But the Ukrainian opposition is, well, pissed.
Former Ukrainian prime minister Yulia Timoshenko yesterday said she would challenge in court the deal which this week ended Ukraine's gas price dispute with Russia.

Ms Timoshenko called for the deal to be annulled and for the officials who signed it to be punished, saying it had "put Ukraine into a situation of unstable gas prices".

My guess is that any deals left over from her time with Gazprom in the mid-90s were just undercut by this deal. And while Russia may have lost, Gazprom has gained some benefits. I wonder whether some day Putin leaves the Kremlin and goes to Gazprom's chairmanship instead.

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Quick note on jobs data 

It will be fun to see how the new employment report is reported in the press. Will people focus on 108,000 jobs created in December and say that's bad? Or will MSM report that November employment was revised from 215k to 350k? If you add the revision to the new number, that's a very solid 248k new jobs created. Here's one blogger for "whoa, big slowdown!" and wondering why he didn't see what's happened to job claims?


Morning shave 

There's nothing like Dunkin Donuts ("cahfee regulah and two honey-dips") and a Globe to put you in a good mood. Which got me to thinking.

The job market for economists this year seems pretty tight for some reason. I'm getting interviews with very good, interesting people. One of the saddest things that happens here is that I interview bright people who take jobs elsewhere and I don't get to talk to them again. What's the courteous thing on calling back on someone who you interviewed and asking to see their research, even if they don't get the job?

If anyone has a recording of the six hours Hugh did with Larry Arnn, a mini-course in western political philosophy over New Year's Day, store that baby. In fact, burn me a copy. I'd like to save that one for the ages. I just had a late breakfast with a former Hillsdale student (he reads here: Hi!) and we both expressed the pleasurable person Arnn is. And a Claremonter to boot, of course.

Before I die, I want to be invited to the Mont Pelerin Society. That's what Hewitt and Arnn's talk reminded me of. Hold it at the Bretton Woods Hotel, too, since I'm just dreaming here.

Thursday, January 05, 2006

Random notes from Boston 

Arrived at 5pm, dumped my bags and went out on the town until 11. (Hey, that's good for me!) I do love Boston. My kid sister is a teaching chef and she recommended this place for dinner tonight. The baked goat cheese was unbelievable. One of my party enjoyed the mojitos very much.

I was shocked to find a Trader Joe's here. I associate it with LA. But where the hell are the fire nuts?

How big a penalty should we charge economists at their national convention when they walk three blocks into a restaurant still wearing their name tags? Mrs. Mojito say "oh, that must be an economist." "Well, he's wearing a tag, that's cheating." And pointless. As I pointed out two years ago, "find the economist" is an easy game for veterans of the AEA meetings.

If you get a room on the elite level of a hotel and are interviewing in your room, how do they get there? The interviewees don't have a passkey. A government economist asked that tonight. Hooboy.

Anyway, that's all from here for tonight.

Wednesday, January 04, 2006

Note to KAR 

Listen, guys. My biggest problem with correcting people getting the Laffer curve wrong is that we've been trying to do this for twenty-five years. Why in the hell would you think they'd get it this time?

Jerry Bowyer disproved the hypothesis three weeks ago. Steven Moore, six months ago. But let's make a couple more points for the Portland Avenue piddlebrains.

First, you assert that the Reagan administration was using the Laffer curve to sell tax cuts. That's not true. Laffer's point is that high tax rates distort the incentives to work, save and invest. (It does not say spend, as you state. That's your confusion of the Keynesian benefit of tax cuts with Laffer.) CBO does understand distortion: Its recent report on corporate income taxes shows that our corporate income taxes are more distortionate than most of Europe.

Second, nobody argued during Reagan, and nobody argued during the 2003 Bush tax cuts, that all of the tax cut would be paid back. This is a canard that the StarTribune continues to toss out, and it's simply wrong. Had you taken the effort to read what was written at the time, it might have helped. Your second pillar of the Laffer theory never existed.
The Laffer Curve itself does not say whether a tax cut will raise or lower revenues. Revenue responses to a tax rate change will depend upon the tax system in place, the time period being considered, the ease of movement into underground activities, the level of tax rates already in place, the prevalence of legal and accounting-driven tax loopholes, and the proclivities of the productive factors.

Third, I don't really care about what lowering taxes does to the budget -- I care what it does to output, and what I get to take home. As the analysis shows, GDP is 1.1% higher under some assumptions in the model. You say so yourself:
Laffer's theory really breaks down into two assertions. The first is that tax relief will stimulate the economy by encouraging people to spend more, work harder and save more, an idea accepted by most economists. In a new study, the CBO modeled a 10 percent cut in federal taxes on all individual income and found that it would raise the nation's economic output over a decade by up to 1 percent, or many billions of dollars.

That would be $120 billion or more a year, every year. Wouldn't that seem good to you, Mr. Boyd? Why are you focused so much on the size of the deficit in what government spends and care so little about what people have to spend? Why is it more important to be sure government collects enough to spend what it desires than to give taxpayers more to spend on what they desire?

I could make other points (there's a rather difficult assumption about how the increased deficit would reduce investment, which I could argue at length about but doesn't fit the spirit of what KAR wants me to do.) But the basic argument has long been over CBO's insistence against dynamic scoring, of recognizing the benefits of tax cuts on work effort and capital formation. Let's give CBO credit for finally trying to get at the question under Douglas Holtz-Eakin. They didn't diss the Laffer curve -- they took it seriously.

Two quotes for the KAR kids:
"It should be known that at the beginning of the dynasty, taxation yields a large revenue from small assessments. At the end of the dynasty, taxation yields a small revenue from large assessments." -- Ibn Khaldun, 14th century.

"...reducing taxes is the best way open to us to increase revenues." --John Kennedy, 1961.

So the StarTribune disses instead a Democrat and a famous Islamic writer. Who'd'a thunk it?


A middleman's middleman 

So who are these guys?

Russia and Ukraine reached agreement Wednesday on restoring natural gas supplies to Ukraine, ending � for now, at least � a dispute that ripped an even larger chasm between the two former Soviet republics, rattled European consumers of Russian gas and called into question Moscow's reputation as a reliable energy provider to the West.

Almost a week after negotiations collapsed amid accusations of blackmail, sabotage and thievery, both Moscow and Kiev claimed victory in the complicated, five-year deal that involves a complex pricing plan, gas from Central Asia and a Russian-Swiss trading business that had been under investigation in Ukraine.

...Analysts had mixed reactions to the deal, which has Ukraine buying gas from the RosUkrEnergo trading company for almost twice what it had been paying, but still lower than the fourfold increase Russia originally sought.

...Under the complex deal, Gazprom will sell gas to RosUkrEnergo for the same price it had demanded Ukraine pay beginning Jan. 1 � $230 per 1,000 cubic meters. Ukraine will then buy gas from the company for $95 � nearly twice what it had previously been paying Gazprom.

The deal also makes RosUkrEnergo the sole provider of gas to Ukraine. Little is known about the company, however, except that it is owned by a Gazprom bank and a Swiss subsidiary of Austria's Raiffeisen Bank. Wolfgang Putschek, a member of the executive board of Raiffeisen Invest, said Centragas was acting as custodian for "a group of international investors in the gas business."

No one answered the repeated phone calls to RosUkrEnergo's offices in Zug, Switzerland.

The two companies also agreed on a 47 percent increase in the transit fee Gazprom pays to Ukraine to send its gas through the pipelines � to $1.60 per thousand cubic meters to travel 100 kilometers. Ukraine will also pay cash for gas deliveries and Russia will pay cash for transit, Gazprom spokesman Sergei Kupriyanov said, ending a barter system that had displeased Russia.

RosUkrEnergo can pay and charge the different prices because it also buys gas from the Central Asian nations of Turkmenistan, Uzbekistan and Kazakhstan that will be added to the mix, Kupriyanov said. According to Ukrainian President Viktor Yushchenko, Turkmen gas sells for about $50 per 1,000 cubic meters.

...RosUkrEnergo last summer was under investigation by Ukraine's state security agency, which was also probing Naftogaz and groups affiliated with Semyon Mogilevich, a Ukrainian-born Russian citizen and reputed organized crime
figure who is wanted by the FBI.

Putschek said "the whole criminal investigation is complete nonsense," and that all claims of wrongdoing were "politically driven" by former Prime Minister Yulia Tymoshenko, now a key opposition leader, and her ally Oleksandr Turchinov,
the former head of the security agency.

Did Russia cave in, as Captain Ed believes? I don't think so. Gazprom gets to buy its own gas through the RosUkrEnergo subsidiary at a high price, then turn around and sell it at a lower price to Ukraine along with the other Central Asian gas feeds that it now can buy. That might turn out to be a pretty good deal for Gazprom. It gets a five-year contract to, at a price it says it can adjust with market changes. Ukraine got to take up the price it charges for transiting gas through its pipelines from $1.09 per 1000 cf to $1.60. But Jerome Guillet thinks that this is built into the $95 price, which means the Turkmen gas to be mixed in is essentially free. (I did note that the two sides said they pay cash to each other -- I don't see that as negating this point.) More to the point, as Levko points out, this gives the Russians a good bit of control over the flow of CenAsian gas. Who's not to say that was the point of the exercise for Russia? I think Putin won, though it appears to be spun as a loss.

And who is RosUkrEnergo, anyway? This is a company that was under investigation in Ukraine under the Tymoshenko premiership. The Kyiv Post had an investigation of the company, which ended when the Tymoshenko cabinet was sacked by Yushchenko in August.

Intermediaries such as RosUkrEnergo and Eural Trans Gas generate billions of dollars in revenues annually transporting gas they don�t own through pipelines, which they also do not own. They are essentially paper companies granted lucrative privileges whose existence has proven difficult to explain for top managers at Gazprom and Naftogaz. Minority shareholders at Gazprom insist that their company could handle the transit itself; some Ukrainian officials insist that Ukraine should also have a share in the business.

Gazprom and Naftogaz announced in July 2004 that Eural Trans Gas would be replaced by the newly established RosUkrEnergo starting 2005. ETG has acted as intermediary in the previous two years...

It remains unclear who the beneficiary shareholders of ETG and and RosUkrEnergo are, and whether Gazprom and Naftogaz Ukrainy control the company. Gazprom and Naftogaz Ukrainy have repeatedly denied owning ETG, but ETG officials say their company does not operate independently of the Ukrainian and Russian gas companies.

Press reports have linked ETG with Ukrainian-born reputed mobster Semion Mogilevich. Mogilevich is wanted by the FBI on money laundering, racketeering and fraud charges.Several of the media outlets that alleged those links were forced to retract their claims after they lost lawsuits brought against them by ETG.

Former U.S. Ambassador to Ukraine Carlos Pascual last year called upon Ukraine and Russia to modify the Turkmen gas supply arrangement, citing reports that Mogilevich has ties to ETG. Pascual said that ETG�s influence over Ukraine�s gas supplies is a serious threat to the country�s energy security.

Here's the FBI warning on Semion Mogilevich. Taras Kuzio reported last August that Mogilevich is living openly in Moscow. And there is some sketchy evidence that RosUkrEnergo was in the middle of the war within the Tymoshenko cabinet that eventually led to her dismissal. Shortly after she left, the investigation into RosUkrEnergo was suspended.

And now they stand in a position to generate large amounts of revenue as the middleman between Central Asian gas and Ukraine, and to provide Russia with control over its flow. Something in this deal smells really bad.

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How not to see an economics convention 

It appears my colleagues Stephen at NIU and Phil at Mankato State Minnesota State U -- Mankato are going to be commiserating with me as people going to the AEA meetings but stuck in hotel rooms interviewing job candidates. This is the fifth year in a row I have done this (it's customary for department chairs in my department to take the job.) Here's what I wrote two years ago about what I look for in interviews. While everyone's different, I find this has been pretty good advice. See also last year's post about reference letters, what faculty at one Ph.D institution tell their job market entrants.

As always I'll see little of the market. Luckily, my parents and sibs live within an hour of Boston, so I'll get one night without having to eat with economists. Particularly in Boston, which still has the best restaurants I know.

P.S. I will try to blog while there, as there's supposed to be wifi in the hotel, again.

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Tuesday, January 03, 2006

We do TOO get to be liberals in class 

It's been sport to take shots at the Modern Language Association (MLA), a meeting of humanities profs that seems to go out of its way to be tone-deaf to the world around them. Critical Mass two years ago even featured a hilarious satire ... go here for the last installment. Best if you read them in order.

So it comes as no suprise to me that MLA has managed to make itself look even sillier with its attempted rollback of academic freedom. Inside Higher Ed begins our review:

There were panels on �Academic Work and the New McCarthyism� and discussions on teaching issues related to war criticism.

At a Friday session, titled �Criticism and Crisis: Twenty-First Century Intellectuals and the Politics of Academic Freedom,� the focus was how to build broader support among the general public for academic freedom.

One professor said that as a �so-called intellectual,� she feels disconnected from the public sphere, which she sees increasingly being influenced by a news media that has little understanding of the principles of academic freedom. A professor from Texas said that some conservative students in his classes �think that we�re brainwashing them.�

...Robert Jensen, an associate professor of journalism at the University of Texas at Austin, said that in defending themselves, a turn to making claims of neutrality is a mistake. �It�s just not true, and it�s not going to work,� he said. �Instead of retreating to neutrality, I think we should explain to the public what we do when teaching � and that teaching is not simply about politics.

�Don�t hide your political observations � describe why you came to view what you do.

�If we take that tact, I�m not saying we�re going to win,� he added, �but at least if we lose, we lose with some principle.�

I think I would like Prof. Jensen, a man who wants to die on a hill he thinks is worth defending, and which I think is worth taking. The reason I believe it is worth taking is because he is using his position to assault academic freedom as understood by the AAUP, as I discussed here yesterday (as it seems I do every day.) That statement includes a statement that faculty members should avoid "teaching controversial matter which has no relation to their subject." Rather than stretch their subjects to make them include controversial matters, the MLA voted yesterday to ask AAUP to remove any references to controversy in the AAUP statement on academic freedom. This does nothing less than give them license to say whatever they damn well please. (This from the Chronicle of Higher Education today, subscriber link here.)

Scott Jaschik from Inside Higher Ed, writing at FrontPage Magazine, has details on the vote.

The original version of the measure from the Radical Caucus suggested that the AAUP alter its policy on academic freedom �to convey approximately the following notion: �The AAUP hereby asserts the freedom of each faculty member, tenured or untenured, part-time or full-time, to determine, according to his or her own professional judgment, what is relevant to the subject matter he or she teaches, and to teach accordingly.�

Cary Nelson and others active in the AAUP urged leaders of the MLA caucus not to so directly tell the professors� group how to conduct its business. So the Radical Caucus resubmitted its motion with language saying that the MLA urges �the AAUP to strengthen its protection of free and critical teaching.�

The ultimate concern, said Barbara Foley, a professor of English at Rutgers University at Newark, is language in the current AAUP policy saying that instructors should generally avoid discussing material that has �no relation to their subject,� which Horowitz and other supporters of the Academic Bill of Rights have cited to discourage, for instance, professors who oppose the Iraq war from discussing their political views in a geology or Spanish course.

What�s important for the AAUP policy to recognize, though, is that such language provides �insufficient protection� for humanities scholars, since �our subjects have porous boundaries� and the best classroom discussions should have few limits in where they can go. It is also important to recognize, Foley said, that fewer professors have the protections of tenure today than they did 40 or more years ago.

Where do I go here? The fact that there's a group that has to call itself the Radical Caucus of the MLA? (Had someone used the word "Maoist" already?) That an English professor thinks it's OK for geology professors to lecture their students on the morality of the Iraq War? Or the imperialism of the claim of "porous boundaries"?

I keep wanting to bury the Academic Bill of Rights, and these muttonheads keep dragging it out of the grave and making the case for it themselves. If you are going to be members of a profession, and claim to be so, have some professional standards and hold each other to them. Sheesh.


You pay your money and they takes their chances 

I admit to being a bit of a jerk with my union. I frequently send email to the St. Paul office asking whether this or that expenditure comes from fair-share dues (what they charge nonmembers for the 'privilege' of having their wages bargained by someone else). It has spent, for example, over $81,000 in the years 1998-2004 in campaign contributions in Minnesota. Its contributions chiefly benefit DFL candidates. (For example, it gave $6800 to DFL candidates and party organs last year, versus $2880 to Republican.) The FY 2005 expenditure on lobbying was $30,113; I do not think this counts the cost of our lobbyist.

In today's WSJ we learn that the IFO is small peanuts compared to the National Education Association.
The NEA gave $15,000 to the Human Rights Campaign, which lobbies for "lesbian, gay, bisexual and transgender equal rights." The National Women's Law Center, whose Web site currently features a "pocket guide" to opposing Supreme Court nominee Sam Alito, received $5,000. And something called the Fund to Protect Social Security got $400,000, presumably to defeat personal investment accounts.

There's been a lot in the news recently about published opinion that parallels donor politics. Well, last year the NEA gave $45,000 to the Economic Policy Institute, which regularly issues reports that claim education is underfunded and teachers are underpaid. The partisans at People for the American Way got a $51,000 NEA contribution; PFAW happens to be vehemently anti-voucher.

The extent to which the NEA sends money to states for political agitation is also revealing. For example, Protect Our Public Schools, an anti-charter-school group backed by the NEA's Washington state affiliate, received $500,000 toward its efforts to block school choice for underprivileged children. (Never mind that charter schools are public schools.) And the Floridians for All Committee, which focuses on "the construction of a permanent progressive infrastructure that will help redirect Florida politics in a more progressive, Democratic direction," received a $249,000 donation from NEA headquarters.
Thank goodness for flashlights to shine on this behavior, which were fought vigorously by the unions. Some readers might be interested in getting information on Education Minnesota. Well, step right up and enter the name of the payer. Bonus points for finding the date when the union gave $5,000 towards the building of the Wellstone Memorial.

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Fooled by seasonality 

I read Mike Meyers' piece on Minnesota jobs while waiting for a haircut appointment yesterday, and I thought to myself it didn't sound right, or at all like our most recent observations on St. Cloud. Yet there are two state economists I respect highly quoted as saying the jobs outlook has looked dismal.

Since July, the state has created a not-so-grand total of 1,100 jobs -- a number that is all but imperceptible in an economy where more than 2.7 million people are employed.

At the rate the job market has been going, the state would be lucky to add 3,000 jobs for this whole year -- a number that state forecasters have been hoping Minnesota could add every month in 2006.

"There's no growth anywhere across the board," said Minnesota state economist Tom Stinson. "This is a concern because if we don't start seeing signs of a little stronger growth in employment, that could lead us to bring down the [economic] forecast in February."

..."The last few months certainly have raised concerns about the vigor and longevity of the current expansion," said Steve Hine, labor market research director at the Minnesota Department of Employment and Economic Development.
I wondered if I remembered the data correctly, so I looked it up. Without waiting for the December number, year-over-year growth in nonfarm employment in Minnesota was a +1.3%, exactly the number Stinson's group forecasts for 2006. So why so gloomy? They say it is because all the growth happened in the first half of the year.

And that's when my light flipped on. The graph draws each year as a separate line, since 2001. That uplift in the first of each year is a normal seasonal effect, and as you can see there's a drop every July. If you pick the end of June as your reference point you will always get that movement, because it's a normal seasonal effect. I'm more used to seeing it in June figures up here in St. Cloud, because that's the month the state lets a number of its seasonal employees go. They come back in October and November. The July drop is almost all local employees, which I think are mostly teachers. About 30,000 go off the payrolls each July.

Suppose we take government out and look only at private sector employment? A very similar pattern will emerge.We will still see the increase in springtime as weather improves -- you cannot get away from weather effects on an economy, even if it has less than 10% employment in manufacturing. In summer, leisure and hospitality employment rise substantially, accounting for perhaps 25,000 jobs across the state.

As you can see by the 2005 line (the top one) we are up for 2005, by 1.4% over 2004 at this time, in private nonfarm employment. We will find a normal seasonal effect as Christmastime hires in retail are laid off this month (it's about 7,000-8,000 jobs -- we get a good bit of that up here in Cloudytown too), which may cause those alarms to go off in St. Paul. They shouldn't. There's sufficient data now to do some seasonal adjustment of the figures -- though I don't necessarily blame Hine and DEED for not doing that yet, since the patterns may change and most government statisticians are leery about using Census seasonality methods on data with a short lifespan (most of the industry-level state employment data start only in 1990.)

My basic message here is that the data that Meyers is suggesting says there is a real slow down in the economy is tainted by seasonal patterns and that in a normal year would see numbers similar to that expressed in the article. I would quibble as well with the notion that we need 3000 jobs as some sort of steady-state calculation. As I noted with the national data last week, an aging baby boomer cohort may be exiting the labor force at such rates, and young enough, that labor force participation is naturally falling. Those increased exits would decrease the net gain in employment. The one thing that argues against that in my view is that productivity gains are still quite large. You would think experienced workers leaving at faster rates would lower productivity, wouldn't you?

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Monday, January 02, 2006

No NCLB renewal left behind 

Dan Lips reviews No Child Left Behind, which will be up for renewal in 2007. Its main strengths are the sunshine provisions that require release of data (cf. this about Minnesota's report cards and how they can be used) and some limited ability to get resources for after-school tutoring.
[NCLB] advanced an important principle: Schools should be accountable to parents, and the best way for parents to exercise that accountability is to give them some freedom and flexibility over their child�s education.

Unfortunately, the law stopped far short of providing real parental choice � one of No Child Left Behind�s key weaknesses. It failed to change the dynamic that public schools operate under because most parents really don�t have control of the money that will be spent on their child�s education.
Worse still, Lips reports, the teaching establishment is lowering standards for the tests in order to make everyone look above average (the Lake Wobegon effect which Chester Finn at the Thomas Fordham Foundation has documented for years) by allowing standards to be set by the states rather than an independent, consistent test. Nobody of course can agree on what should be tested.

NCLB faces a stiff fight for renewal. Lips suggests keeping the reporting requirements and testing in place but freeing up the money from federal control. That makes a good bit of sense, in terms of letting 50 states try 50 different programs and seeing which succeed. This falls far short of providing parents with real choice, but given the battle over vouchers for even victims of Katrina, it may be the best we can hope for.


Academic freedom stalking horse 

Via Joanne Jacobs, I read Charlotte Hays' dissection of the Difficult Dialogues initiative, which is has given away nearly $3 million to 43 schools so they can talk about race, sexual identification and religion. Ms. Hays finds the project dubious.
My own most recent experience with dialogue was a meeting to discuss why there aren't more women working on editorial pages. When I suggested that editorialists aren't hired on the basis of their sex, I learned that if you stake out a heretical position, nobody really listens.
She details the types of projects that are being paid for with this money, such as a role-playing game for the creation of Israel (operated out of the school's Women's Center, for reasons I can't figure out) and
The University of Nebraska, Omaha, has boldly named its initiative "Breaking Silence." It will aim at "open, productive dialogues on issues of religion, sexuality and race." Yes, the silence on all those subjects has been deafening. No doubt the Omaha dialogues will aide participants in "understanding the complex roots of bigotry," as Ford's grant prospectus puts it. And if participants are lucky and someone in the room announces his opposition to gay marriage, students will productively be told that they have real live bigots in their very midst.
Indeed. The Ford Foundation argues that the purpose of its grant is to promote academic freedom. Yet within its request for proposals was this view of what academic freedom means.
University professors enjoy, both as teachers and as citizens, substantial latitude in what they say and what they write�free from institutional constraints or sanctions�save in rare situations. If, however, professors seek to exploit students, coerce the views of students, or display a demonstrable lack of competence in their discipline, their academic colleagues may conclude that their expression exceeds the limits of academic freedom. That is, academic freedom must always be accompanied by academic responsibility. Defending academic freedom also entails sensitivity to those rare cases where it is abused. Indeed, a central mission of academic freedom is to afford students the broadest range of learning opportunities as they prepare to understand and engage in an increasingly heterogeneous and global community.
Now if Difficult Dialogues was committed to that view, it might support proposals that included putting alternative viewpoints in the discussion. But within the RFP itself it limited its proposals to looking only at "religious pluralism or cultural diversity." A discussion of Islam that included the work of Victor Davis Hanson, for example, is probably not among the RFPs selected for funding.

This use of "academic freedom" as a stalking horse for continuing to promote illiberal views of academic discourse is on the increase. Our campus recently passed a statement on adopting the AAUP principles on academic freedom, but the discussion of the campus is leery of any attempt to create an oversight board of faculty that would look into "those rare cases where it is abused." To them, the oversight board investigating Ward Churchill is a chill on academic freedom, not its defense. Do not be fooled by statements that "academic freedom must always be accompanied by academic responsibility." The abusers are already in power, and they will give up that power only with a great fight.


Ukrainian gas: an old story 

Those of us who have watched Ukrainian affairs for a long time will feel a sense of deja vu in the current crisis over Gazprom cutting off gas supplies to Ukraine (and by extension Europe.) It's an annual event -- the Ukrainians fall behind in their payments, Russia tries to cut off gas supplies while continuing to use Ukrainian pipelines to send gas to Europe, Europe complains, the gas comes back on, and some settlement is reached. I saw this when I was there in 1995, and even then it was the third time it had happened. It's the same this time.
Ukraine's national company Naftogaz Ukrainy said Gazprom has cut natural gas supplies to Europe.

"Gas is not being supplied to Europe through transit lines. This may cause the pressure in the pipelines to drop and gas deliveries to Europe and partially to Ukrainian consumers to decrease," Naftogaz said in a release on Sunday.

..."The group has announced that natural gas will be supplied in sufficient amounts to housing utility services and household consumers," Naftogaz said.

...which is Ukrainian for "we'll make sure Ukraine is not left out in the cold." An AP story this morning has the Russians accusing Ukraine of diverting $25m of gas destined for Europe. The picture in yesterday's NYTimes, in which we see the price charged to Ukraine is double that to the south Caucasus (and almost five times that at which it's sold to client state Belarus.) Most observers put the blame squarely on Russia, including the Bush Administration.
The United States regrets the Russian decision to cut off gas from Russia to Ukraine, with potential effects on gas supplies elsewhere in Europe. Such an abrupt step creates insecurity in the energy sector in the region and raises serious questions about the use of energy to exert political pressure. As we have told both Russia and Ukraine, we support a move toward market pricing for energy but believe that such a change should be introduced over time rather than suddenly and unilaterally. Russia and Ukraine have a shared interest in maintaining good reputations as gas supplier and transit countries. The US has encouraged a compromise solution, and we remain hopeful that a resolution will be reached between the two sides that provides energy security and predictability for all concerned.
The best compromise currently offered by Putin is to go to the $230 price and allow Ukraine to get a loan, guaranteed by a western bank. That's not much of a deal, and the Ukrainians have rejected it.

Let me recommend to you an excellent review of the situation by Jerome Guillet, a Kos diarist who did his dissertation on Ukraine-Russian gas issues and at one time worked for Gazprom. (There's a follow-up entry this morning.) Jerome argues that the leverage is with Ukraine and the West. Quoting his three bullet conclusion:
Let's take each of those in turn: First, gas exports are about 40% of Russian export earnings, perhaps more with recent energy price rises. And it is hard to contemplate where else the gas would go if it was not shipped. Warehousing the gas is a short-term solution only. But Jerome's point is probably more political than economic: Kim Murphy argues this morning that the timing of the cutoff, within hours of Russia taking the 'presidency' of the G-8, undermines the whole reason Russia is in the G-8 -- it is a superpower only in energy nowadays.

Second, the value of transport may be quite large. In today's diary, Jerome wonders whether the EU countries might renegotiate their contracts with Russia to take delivery at the Russia-Ukraine border rather than at the Czech border. This would greatly lower the leverage Russia has over Ukraine (and Moldova) and the threat of its removal may give Putin greater pause. Ukraine, for its part, is arguing that it will get the gas it needs from Turkmenstan, (Bizarroland, as Captain Ed points out), but that gas has to ship through Russia to get there, and the relationship between the three countries and the odd little company Itera (see this) makes that a tenuous strategy.

Last, the timing of this, close to the Ukrainian parliamentary elections and less than a year after the Orange Revolution, cuts a couple of ways. The most obvious one is the attempt of Russia to make the Yushchenko government look inept and discredited, so as to push the elections towards Russia's (and Gazprom's) old friends in the country. Already Russian press is pushing the popularity of the Kuchma-Yanukovych forces, and Scott Clark notes Yanukovych is on TV a good bit lately. I think it is also noteworthy that Yulia Tymoshenko, who's party is running neck-and-neck with Yushchenko's, has many connections in the gas industry. She is hitting hard at Yanukovych on the issues and suggested that the prime minister who replaced her should resign if the gas talks fail. The power struggle that began last August hasn't gone away, and it should come as no surprise that it lies behind the scenes of the gas crisis in Ukraine. Twas ever thus.

UPDATE: As if on schedule:

The Russian gas monopoly said tonight that it would restore most of the natural gas that it withheld from a giant pipeline running through Ukraine to Western Europe.

The decision does not resolve the dispute between Russia and Ukraine over price increases for the gas, but is meant to answer European complaints that its fuel supplies were jeopardized.

Officials of the monopoly, Gazprom, said they would pump 95 million of the 125 million cubic meters of natural gas that it withheld from the flow on Sunday. As the Russians described it, this was to make up for gas that was not getting to Europe because Ukraine was siphoning off gas for itself, a charge that Ukraine officials denied.

Many countries of Eastern and Western Europe found their supplies dwindling today, although officials said there was no immediate threat to home heating supplies. Western Europe gets about 25 percent of its natural gas from Russia, much of it through the pipeline in Ukraine.

The Europeans exerted strong pressure on the Russians to work with Ukraine to calm the crisis, which called into question Russia's reliability as a major energy exporter.

Happens every time.

Sunday, January 01, 2006

Roll those Tice 

After the show yesterday our producer said he was going to the Bears-Vikings game yesterday, hoping the Vike would lose and that this would help get Mike Tice fired. Well he was only half right. The Vikings won, but have fired Tice anyway. He was told an hour after the game according to the StarTribune report, and the only quote from owner Zygi Wilf was in the PioneerPress report (who said it was immediately after the game that Tice was told):
"After significant evaluation we feel now is the time to make a coaching change," Wilf said in a statement.
Tony Siragusa, covering the game for Fox today, said he spoke with Tice and Tice told him he had a meeting with Wilf to discuss his future with the team tomorrow morning, and that a decision would and should be made soon. If Siragusa's correct, something made Wilf move up the decision a day. Good for him: He's behaving like an owner.

UPDATE: Didn't notice Tony's post on this this morning, discussing a call he made to another radio station when Tice was on. BTW, another reason why this is good: Since Tice had a very cheap contract, letting him go probably means Wilf will have to pay more for the next coach. That should be good news to Viking fans.

UPDATE 2 (1/2, about noon): I'm just amazed by everyone's vilification of Wilf for his quick trigger on Tice. Besides what I reported earlier, that this was the most likely outcome a day later anyway, it just amazes me that people think Tice is entitled to another day's pay from a man who had decided to let him go. I appreciate the story about Tice helping a fallen soldier's family, but that's not why Wilf signed his paychecks. BTW, you simply must read Gary Gross' takedown of Sid Hartman's column this morning.