Saturday, April 29, 2006

Oil discussion available 

Per request of both interviewees Heading Out and Prof. James Hamilton, I have an mp3 of the here, (15.9 MB, 22:42 time). My thanks to both gentlemen for their insights and to Mitch, Ed and the Patriot for the discussion.

Friday, April 28, 2006

Aren't you sick of me talking about gas? 

Probably. And you might be sick of me tomorrow too, when we get to host James Hamilton of EconBrowser at 2pm CT on the Northern Alliance Radio Network. I'm still working on getting one of the folks at the group petro-blog The Oil Drum to join us, though it appears Prof. Goose is busy tomorrow.

UPDATE (11pm): Heading Out from The Oil Drum has indicated s/he will be available as well, so the discussion should be lively! Do tune in or listen to the stream.

Craig Westover tries his hand at a little economic analysis of Minnesota senatorial gas plans. Both DFLer Klobuchar and GOPer Kennedy, he finds, have some flaws in their plans. Kennedy's plan to temporarily suspend the gas tax -- an idea that originates in fact from a Democratic senator in New Jersey -- and crowing about "provid[ing] the deciding vote last fall to ... make price gouging a federal offense" is little more than the very publicity stunts he decries in the next paragraph. The reaction to a temporary tax cut is to encourage more spending on gas now. If I can use the period to top up my First Fuel Banks card, I am on it! But if we all do it, what happens to gas supplies? Craig correctly points out (though I will need to have the demand-vs.-quantity-demanded talk with him):

Now lets look on the price and supply sides. The price of gas suddenly drops 18 cents a gallon. Demand goes up and, duh, so do prices. Perhaps not 18 cents a gallon, but they will rise. If they don�t, stations are going to start running out of gas because the supply pipeline is stocked for the higher price/lower demand level. It�s ironic that someone on the bandwagon of investigating oil company profits is making a proposal that will effectively increase oil company profits.

But won�t the oil companies increase supply to meet the new, higher demand? No, because the demand is temporary.

So you won't save the 18 cents. Since the tax burden is shared between buyer and seller, cutting the gas tax in fact increases profits for the oil industry. (Maybe we should pass it just to watch Chuck Schumer's head explode.)

As the Oil Drum writers point out, this only serves to "worsen our dependence on oil by disincentivizing the innovation of oil alternatives and oil conservation efforts." The Klobuchar proposal does far worse by increasing oil companies' cost of capital just at the time when we want them to invest more in exploration and refining. The only way someone invests is when they can be sure government will not rapaciously seize the return on that investment. Talking about "holding oil companies accountable" is little more than asking "where's my sugar, sugar?"

Tune in tomorrow to see if we can make some sense out of all the hot air. If you can't catch us on radio, streaming audio is here.

GDP's strong 1st quarter -- is it a portent? 

We don't yet know the effects of oil prices, but first quarter consumption spending drove GDP to a 4.8% increase. Personal outlays ran ahead at a very high rate, so high that personal savings was a negative $50 billion. But has saving come to an end? In a boom we expect savings to rise with the business cycle. That's not happening right now. But that may also indicate that workers expect those nice productivity gains to continue, so it will be easier to save later.

William Polley thinks the inflation data in the report means the Fed will slow down the pace of Fed funds rate increases. I'm still favoring an increase in May, an increase in June, and then a holiday until 2nd quarter data come in. David Altig's analysis of the futures markets concurs. Since I think the next quarter will not be this good, I expect the holiday to be extended.

Why will it be extended? One word: housing. Bernanke thinks so. When even the industry people are saying "soft landing", there is only one direction it can go.

We mock chickens for lunch 

Reader Nathan and others chide me for wanting my own brigade of vegetarians in the 101st Fighting Keyboardists.
Everybody has to be the leader of their own band, nobody is willing to subordinate their pet interest and play along to create something bigger, better.
Upon reflection, perhaps he's right. I've been a vegetarian for 19 years, but haven't been pure at every meal. Twice it was to be polite on a business venture, and once in a 24 hour day travelling ten time zones and the only meal the plane offered me was salmon. If I can sacrifice in real life for the sake of relatively small matters, there's nothing that should prevent me from being able to say "We eat chickens for lunch", even when it's mock chicken.

Probably the only thing we have in common with PowerLine our server. Sorry we were down earlier; Hosting Matters says the coast is clear. My guess is the scene was a little like this. PL is still down at this moment, making me think their server was the one the attacked.

Thursday, April 27, 2006

We be elephants 

Earlier tonight Captain Ed asked me to join his initiative (with Frank at IMAO and Derek at Freedom Dogs) to create the 101st Fighting Keyboardists. I just wrote back to him:
Ed, I was with you until the motto. As a vegetarian for 18 years, I cannot say "We Eat Chickens for Lunch". I suppose tofu wouldn't have quite the same bite, so to speak. So I propose a 1st Vegetarian Brigade of the 101st ("We're elephants, and we're vegetarian.") I need a ruling from the founders for this subdivision.
I await their decision, and I'll update this post when it arrives.

Maybe heffalumps instead.

Hewitt show prep 

Since Sean does this for Sykes, I thought I'd let Hugh Hewitt know of two pieces he needs to read, and try to get their authors on the air.

I've got grading to do, but I'll listen and if you don't call these guys, Generalissimo, I'll be grabbing them this weekend.

Bad syllogism 

Smartie misses an ECON 101 lesson. Trying to take down analyses by Mayor Doug and Pat Cleary, he correctly summarizes Pat's argument -- oil prices rise because of supply and demand forces beyond the control of oil companies and thus cannot be held accountable for massive profits (however defined) -- Smartie starts his attack with this logical statement:
If it were true that gas prices reflected the price of crude oil then oil company profits should remain relatively stable- just like those of most blue chip industries.
That would get marked wrong in my principles course. A change in the demand for crude oil, whether for use in heavy SUVs or just out of fear of future supply disruptions, will necessarily increase profits. Take this presentation as your instruction. Then assume demand shifts and ask, what happens to the size of the profits rectangle?
The fact that oil companies are reaping record profits as oil prices increase indicates that they are raising gas prices faster than can be accounted for by the price of oil alone.
The equilibrium price in an imperfect market like the oil refining business is going to be set by not just how much demand shifts but also by the cost of increasing output. That cost is very high right now because firms are still changing over from MTBE to ethanol blending, dropping inventories like a stone.

If you've got the last case of bottled water in a drought area, your profits on that will appear high. But that's only because you are counting current revenue against sunk costs. The relevant cost to the water seller is the cost of the next case. So too with gas -- the relevant price for economic profit (vs. accounting profit) is the opportunity cost of bringing it to market today.

Categories: ,

They'll drink anything 

Ran across a very humorous story starting out of something serious. About a month ago the Russian government imposed a ban on Georgian and Moldovan wines. Both former Soviet republics make very good wine that you can buy here in the States. (I have a bottle of Georgian on the rack here at the Scholars' library.) Being close neighbors, the ban really hurts the two countries; Georgia exported 60% of its wine to Russia last year.

The Georgians have taken this very seriously and put a former defense minister, Irakli Okruashvili, in charge of negotiating with Russia and finding new markets for their wine. But the Russians have been busy imposing embargos around many goods, in part thinking the rest of the world was pawning off their bad products on Russians too new to open markets to know they're buying dreck. Okruashvili arrived in Kyiv, Ukraine, trying to sell his wine there with new tests of the wine's quality run in France. Across the border in Moscow, on a TV station that reaches Kyiv, a story was run that went like this (thanks to Johnson's Russia List for the translation):
[Okruashvili] made public what was known a long time ago - the majority of producers were sending bootlegged beverages to Russia, which was in fact the reason for imposing a ban on the import of Georgian wines [into Russia]. By saying this, the military commander did not mince his words.

[Irakli Okruashvili, Georgian defence minister shown speaking on Georgian TV, Russian voice-over] By cheating, the majority of Georgian winemakers tried to conquer the Russian market and bring in wine that could not be sold in Europe, because in Russia one could even sell - excuse me for this expression - excrement. We will now have to export better quality wine to Europe.

[Presenter] Okruashvili is currently in Kiev promoting Georgian wine.
Not saying which side is true, but the timing of that to his trip to Ukraine is priceless.

If you want my sympathy 

I was excoriated on the air by at least one caller a couple of weeks ago for not being in favor of just shipping out all illegal immigrants. (Captain Ed correctly identified this as a boondoggle for Greyhound. My position isn't to legalize everyone but to approach immigrants as providing us with both benefits and costs and treat them as such.) But Tony Garcia points to a letter from an AFSCME local at the U of M that is helping support another march by immigrants seeking rights ... to be held on May Day. If you want my support, dear immigrant, you will do well not to associate with communists.

Your answers interested me 

Eighteen readers here (about five percent of average daily readership) responded to a political survey here last month hosted by BlogAds. I thought you'd be interested in the results. Most of the readers who answered are middle-aged males with average earnings around $100k. I am surprised only four respondents called themselves educators, and that only three were bloggers. That's quite interesting. Readers seem more interested in economics than in education, as evidenced by high number of readers of the Economist and the WSJ, as well as National Review. As you can see lately I am moving in that direction -- though I must admit when I see outbreaks of stupidity in higher education I can scarcely contain myself from blogging about them. Thanks to the 18 for your input.

Wednesday, April 26, 2006

A quick reminder to Hewitt 

Just reading Hugh's post while he's on the air,
The key to our conversation (with Energy Secretary Bodman) was that pricing is out of the hands of the oil companies, and has been for some time.

That kind of misunderstanding creates problems: The market process doesn't put "pricing" in the hands of any person or group. From David Boaz' libertarianism primer:
Businesses try to find out what you want and offer it to you. People who are trying to make money by selling groceries, or cars, or computers, or machines that make cars and computers, need to know what consumers want and how much they would be willing to pay. Where do they get the information? It's not in a massive book. ...

This vitally important information about other people's wants is embodied in prices. Prices don't just tell us how much something costs at the store. The price system pulls together all the information available in the economy about what each person wants, how much he values it, and how it can best be produced. Prices make that information usable to producer and consumer. Each price contains within it information about consumer demands and about costs of production, ranging from the amount of labor needed to produce the item to the cost of labor to the bad weather on the other side of the world that is raising the price of the raw materials needed to produce the good. Rather than having to know all the details, one is presented with a simple number: the price.

Notice each price. Each trade generates in its execution a by-product which is the rate at which goods exchanged. Each trade involves both a buyer and a seller, expressing alternately a willingness to pay to the seller and a willingness to produce and deliver to the buyer. Pricing is in the hands of the oil companies at the time they have something to produce and deliver (converting crude to gas and piping or trucking it to a distributor.) But it isn't either, because there's no price without a trade, and there are millions of trades. When the market closes at a price of $71.85 as it did today, all you know is the rate of exchange of the last trade of dollars for oil.

What is great about the market economy is how informative that by-product is.

It only costs a penny and two fifths 

(That title should catch the Fraters' attention...)

Over the last six months, the cost of producing a penny and the material costs of the metal contained therein (97.6% zinc, the rest is the copper coating) has risen to a total cost of $.014, including production and record-high metal costs but not transportation. It's worth remembering that in 1943 the U.S. Mint, facing a shortage of copper and zinc from munitions demand, switched to a zinc-covered steel penny. People hated them -- they corrode when exposed to enough moisture -- but you still find collectors of them. If prices on zinc and copper continue to climb, you can expect some change in the composition of the penny.

Pennies used to be profitable -- according to an old Minneapolis Fed article, the Treasury netted seigniorage revenues of $42.4 million from producing pennies in 1989. But now it appears you and I can make money from melting down pre-1982 pennies (when the ratio of copper and zinc in the penny was reversed).

When that last article was written, a pre-1982 penny was worth $.0154, a 54% premium over the face value based on a $2.42/# price for copper and a $1.31/# price for zinc. Today those prices are $3.24 and $1.52. If I ran a local smelter, I'd head on down to Keegan's tomorrow night -- you'll find some bloggers there who will be looking to cash in to cover their bar tabs.

Another point to make about this is that it's part of the same story that transfixes us about gas and oil. Steel producer stocks are up 50% this year. Most metals are up quite a bit:

The increase in metals isn't quite as strong as the increase in energy prices, but still very significant for the price of a penny or anything else made of metal. Can you say, China?


Would you sell me a barrel now or next fall? 

Suppose I own ten rookie baseball cards of Cal Ripken, who is eligible for the Hall of Fame in 2007, and whose card trades for $60. We do not know if he will be elected; it seems a shoo-in, but things can happen that might tarnish his reputation between now and then (remember Pete Rose). Suppose I could guarantee now that I could sell the card for $70 next September to someone, and than that card would be worth probably $75 after election to the HOF. Do I sell now at $60, in September at $70, or January '07 for $75? What if there was a futures market that lets me guarantee?

Arnold Kling makes the same point about oil futures: The market is saying right now, hoard the stuff. The near contract (delivery of oil for June, is $72.45, $75.20 for October. If storage for six months is less than $3/barrel, wouldn't I save the oil to sell later? And why would I save? James Hamilton ticks off Nigeria, Iran, Iraq, Saudi Arabia, Venezuela, Russia, ...

The baseball analogy, by the way, is apt.

So I'm told... 

...that the letter Karen Murdock sent to the list owner of Progressive Calendar never showed up on the calendar. I take it then that it's fine for Green mayoral candidates to attack someone's character but not "suitable" to defend oneself against such attacks. Only in Green-land...

Tuesday, April 25, 2006

I should eat out less 

An economic study says more restaurants around you put more pounds around your middle.

They note that technological change has reduced the amount of physical effort that people expend in their jobs, and that "the ready availability of inexpensive restaurants has not only caused people to consume more, but has made them less active - less likely to prepare food at home or travel further distances to obtain a healthy meal." The cigarette tax and smoking prohibition laws are included to account for the possibility that the increase in U.S. BMI may be related to the success of public health efforts to decrease smoking. When people quit smoking they often gain weight.

... As the number of restaurants per capita increases so does BMI. The average BMI will rise by 0.09 percent if the per capita number of restaurants increases by one percent. The authors note that the rapid increase in obesity in the 1980s is partly an "unintended consequence of the campaign to reduce smoking." On balance, however, they conclude that "the increase in the per capita number of restaurants makes the largest contribution to the BMI outcome, accounting for 54 percent of the growth" in a pooled sample of men and women.

I remember my father-in-law saying the key to his keeping weight off was the fact his wife couldn't cook. In my case, Mrs. S is an excellent cook yet I am not home enough to enjoy. Maybe I should take up smoking...

The downside of initiative-and-referendum 

I largely favor it -- for one, it would get the state Senate out of the business of obstructing constitutional amendments -- but ACTA points out a case where it's being used by a Department of the 3.7 GPA to create an opportunity of leftist activism for college credit. Not that it's ever stopped them here.


The second law of supply 

If the first law of supply is that there is a direct relationship between the price of a good and the quantity producers are willing to supply, the second law of supply states that the elasticity of supply is greater in the long run than the short run. That is, an increase in price of a good resulting from a change in demand will increase price more in the short-run. Quantities produced cannot change as fast.

We are seeing an example of this in gas prices today, as the editorial board of the Wall Street Journal makes clear.
A decent portion of the latest run-up in gas prices--and the entire cause of recent spot shortages--is the direct result of the energy bill Congress passed last summer. That self-serving legislation handed Congress's friends in the ethanol lobby a mandate that forces drivers to use 7.5 billion gallons annually of that oxygenate by 2012.

At the same time, Congress refused to provide liability protection to the makers of MTBE, a rival oxygenate getting hit with lawsuits. So MTBE makers are leaving the market in a rush, while overstretched ethanol producers (despite their promises) are in no way equipped to compensate for the loss of MTBE in the fuel supply. Ethanol is also difficult to ship and store outside of the Midwest, which is causing supply headaches and spot gas shortages along the East Coast and Texas.
Many of the items in the WSJ's list of possible cures appears in the White House's announcement today of changes in energy policy to deal with the increase in prices. But these should have been done long ago, and statements that the president "will not tolerate" "fraud or manipulation of the market" are unhelpful. These were illegal before today, and if they were tolerated before one must wonder why.

And if this story that the Democrats will offer a temporary suspension of gas taxes is true, Bush's statement is going to look like half-a-loaf in comparison in the press. Note, though, they are robbing the Highway Trust Fund to pay for the tax relief, and replacing it with a cut in tax breaks to the oil companies that is triple the size of the take-back Bush has proposed.

And yet we continue to subsidize ethanol. Take a look at this chart for the price of E-85 fuel, from a local gas distributor. And remember, Phil and I live in the place where the stuff is made, so there are no transportation costs included.

UPDATE: Deacon attempts to define price gouging. The proper definition, Tom DiLorenzo tells us, is "allowing market forces to set prices". The alternative is to plan gas consumption. DiLorenzo tells us of one guy who tried it, and reported it was a failure:
Your America is doing many things in the economic field which we found out caused us so much trouble. You are trying to control peoples' wages and prices � peoples' work. If you do that you must control peoples' lives. And no country can do that part way. I tried and it failed. Nor can any country do it all the way either. I tried that too and it failed. You are no better planners than we. I should think your economists would read what happened here.

Ms. Klobuchar, Rep. Kennedy? Meet Hermann Goering. (h/t: Craig Westover.)


Monday, April 24, 2006

Remembering the first one of the century 

I heard today from someone who has a friend who's department has blocked her from finishing her PhD dissertation on the Ukrainian terror-famine because they didn't like the conclusions regarding communism. I will investigate that. It came up after I noted that today is Armenian Martyr's Day. OneWorld has some pictures of Indian students visiting the memorial in Yerevan, while Radio Liberty -- Armenia service notes a march of 2000 (?) in the streets of Yerevan Sunday night.

I'm stuffed 

Stuffed up with the politics as sausage analogies.

Enough already. Thanks.

Take an inch, and they'll take a mile 

No, that's not a misprint. This is my description of what happens on college campuses when administrators get any chance to impose mandatory diversity training. History repeats itself at Bellevue Community College, where David Beito reports that a Michelle Malkin-inspired protest of an insensitive faculty member there has led to MDT. But, in a new twist, the fellow who was insensitive was so by making a joke against Condoleeza Rice. And the fellow brought to do MDT is probably a fellow traveller of the insensitive faculty member.
In response to Malkin�s campaign, Bellevue College not only has given the diversity police more monitoring authority over the curriculum and personnel evaluations, but will hire the notorious Glenn Singleton to conduct ideologically one-sided training for faculty and staff. Apparently, it will be mandatory. For more on Singleton, see here and here.

A self-described �diversity expert,� Singleton is an accomplished race baiter who is often able to persuade colleges and schools to pay him hefty fees for his services. Critics on both the left and right have condemned his �Maoist� style "training" methods.
Malkin has not acknowledged the claim. We know there's bias on campus, and we do well to point it out whenever and wherever we can. But Beito is right that the cure is worse than the disease when you let the sickness write the prescription.

Maybe we let THEM handicap the race... 

While the GOP SD15 convention was a rather bland affair, it appears the DFL had themselves a bit of a donnybrook at their convention. While endorsing the two incumbents for re-election, nobody got the endorsement yet for the potentially vacant 15A House seat. For my non-St. Cloud readers, a little background. District 15A is Jim Knoblach's district, which he last won in 2004 against Anne Nolan. Nolan wishes to run again, but apparently the DFLers in attendance were not interested in picking someone just yet, waiting as the GOP is to see if Knoblach should vacate the seat to run for the Congressional seat. Nolan knows that a vacant seat would bring more interest in the DFL nomination and of course wanted to foreclose that possibility by nomination yesterday. Alas it was not to be for her. Most of the posters on this board -- and indeed many of the Times chats -- were at the DFL convention and one writes,
First they attempted to postpone the vote for endorsement all together, which failed. Then to further the insult to both Anne and the 15A delegates, they marched out 3 other "candidates" at the last minute. I'm dissapointed to say that the second effort succeeded in throwing off the whole endorsement process. I've never been so disgraced by the DFL.
The several references to Ms. Stealth would seem to indicate the candidate-in-the-wings is female. Someone has even named a school board member as the candidate-in-waiting.

But what interests me is that the DFL takes seriously enough Knoblach's potential to win that they risk dissension over the possibility of his seat opening. That such efforts were taken should indicate an informed forecast of Knoblach's chances at winning the nomination.

Saturday, April 22, 2006


At the SD15 GOP convention, and the process of watching the resolutions debated is like death. But heck, we did get the motion to pull opposition of state funded light rail and commuter rail from the 2004 platform defeated. I hated having to disagree with businesspeople I like here, but St. Cloud will always end up on the short-end of that stick if we start the process of funding rail. Fellow blogger Psycmeistr is here and is waiting to blog his own. Back after the SD15 endorsing meeting.

5pm: No, I wasn't pushing Pscymeistr aside, I just wanted a bagel before we had to go back. Turns out we only spent one more hour, some of which I spent on the phone to the show. There wasn't much to report, so we kept it short.

My impressions:

First, the BPOU leadership decided to create its own slate of delegates and alternates the previous Wednesday. Psyc will have to comment on that, since he was apparently at the meeting the slate was decided. I asked Rep. Krinkie about this arrangement and he thought it was fine. I am an alternate, so I do get a seat at the big dance in two weeks. That's really all I wanted. From what one person who was in a position to know told me, the Wright County process was much more a train-wreck, but it was difficult for many who came to the convention to understand that their ability to get on the delegate slate for their candidate was quite restricted. A few tried, some succeeded, but the process was unclear.

I missed Sen. Bachmann because I was slowed by some bad food from my trip yesterday. I also missed Esmay, but Psyc has reviews of both of them up already. ("June-Cleaver-on-steroids-smile" needs to be trademarked.) From the delegates I spoke to she had nice things to say about everyone.

I arrived as Knoblach was speaking. Jim's kept the same message time after time: He's the "electable conservative who gets things done." He had by far the biggest contingent there, as you might expect, but I didn't sense huge enthusiasm. Most of the slate of party regulars are old friends of both Knoblach and Esmay, but it's excepted most will vote for Jim unless and until he's out. The plan all along has been to finish second on the first ballot and collect support as he goes along, and talking to him after the convention it sounded like he believes he's exactly where he wants to be.

Krinkie was last, and he showed some emotion and a little anger. He's obviously upset about the Twins vote and wonders how Republican legislators can forget who voted them to office and why. I share his disappointment and anger that the same party that wants a vote on the definition of marriage can't allow taxpayers to decide if $2000 of their money should go to a stadium for a guy who's worth billions. But I doubt that anger played well.

I did get an answer from Rep. Krinkie on yesterday's signing of the pledge -- the Bachmann people handed out immediately a copy of the pledge. (Way to keep it positive, Mrs. B!) I was pretty sure he had a meeting at that time, but he instead is handing out this press release, fairly represented in the news reports. He obviously changed his mind, since he's now signed the pledge at the Wright County convention.

I spoke to Jay Esmay last and I thought he did a good job handicapping the race. (He's also developing a blogging addiction, I see.) I see four possibilities, listed in no particular order:

  1. Bachmann wins on first ballot. If anyone is going to throw a shutout, it's Mrs. Cleaver. She's been able to rely on a shadow campaign with her students and her church supporters out in front. She has managed to keep her apron on, and most importantly, the other three candidates have acted like she's the frontrunner and trying to get out ahead of her isn't important. She's slamming Krinkie but kissing up to Knoblach and Esmay supporters hoping to convince a few she's going to win anyway and perhaps snag that first ballot 60%. Probability of this outcome: 20%.
  2. Esmay hangs around. This is really a nightmare for Krinkie and Knoblach, because it will be easy for support to build around Jay. He's done well by being personable -- a quality that the other three don't have as well -- and playing a little "aw shucks" with his underdog status. A 40-30-20-10 first ballot is good for him. If he then gets up over 10% the second round, there is going to be some momentum. If he's enough delegate's second choice -- which given the nastiness of some campaigning is not at all out of the question -- he may very well not be the first guy in the loser's lounge. Probability of this outcome: 10%.
  3. You don't have to endorse anyone. This possibility comes if Bachmann holds at least 40% but can't get to 60%. If you get late in the day, she has to do the calculus that the convention fails to endorse and she runs against possibly both of the K-boys. That would be good. What might happen, however, if Krinkie were to stand aside for Knoblach, who I've told you all along has no cash problems? I don't think that's an outcome she wants. She should be careful that Phil fans don't get to the point of favoring an anybody-but-Bachmann campaign. It might yet come to that. Probability of no endorcement: 10% and rising.
  4. The old boys come from behind. The race since mid-March has been to see which of the two Ks will be Last Man Standing against Bachmann. I think this is still the most likely outcome, at 60%, but I cannot at this point handicap which of the two wins out. There's little doubt that one will throw support to the other -- while they've been at each other's throats for the second place finish, they have some affinity ideologically and both think Bachmann would lose the general, so they'll in the end do what's needed to prevent that. The question is whether or not they can keep their people together enough to not let her get over the 60% on the subsequent ballots. I think it's the most likely outcome. But which one goes down first? A month ago I was sure it was Knoblach losing out to Krinkie. Now it's looking more like the other way, but that could just be my view from St. Cloud.

Thursday, April 20, 2006

Out of pocket 

If you're wondering why I've been posting less this week, here's why. I will also be at the SD15 GOP convention on Saturday back in STC and missing the NARN boys. Posting will be even lighter until Monday. By then, I've got things to say. Lots of local stuff happening that needs developing.

Replicated cat fights 

The battle between economists John Lott and Steve Levitt has made it to the Chronicle of Higher Ed (temporary link.) The argument is about whether Levitt's statement that he could not "replicate" Lott's results is defamatory. It is at least careless. While the law probably would not support Lott's claim, Levitt has to know of the specific definition of "replication studies". Choosing just one different word would have saved all of this, while still allowing Levitt to claim Lott's study was not robust, which we all knew anyway.

I for one am in favor of replication studies, and I recommend Gary King's efforts to seek more of them.

Wednesday, April 19, 2006

Try investigating supply and demand 

So one guy in Brooklyn charges $4.50 for a gallon of premium gas. So what? The fellow must have some marketing savvy:
A Daily News reporter spent nearly 90 minutes outside the station yesterday evening before a driver finally decided to fork over an exorbitant amount of dough for some fuel.
The article quotes Chuck Schumer calling for an FTC investigation.
"It's not hurricane season, but the oil companies are just raising the price up and up and up," Schumer said. "And the question is are they doing this dictated on the laws of supply and demand, or is something else at work?"
Katy Delay would refer Mr. Schumer to today's Investor's Business Daily insights column, pointing four fingers back at Sen. Schumer for their assistance in crippling the supply response.
Yet a big chunk of our current gasoline price pain is in fact self-inflicted. The reason, say energy economists, is simple: Regulations of all kinds have reduced the available supply of energy to U.S. markets. That's especially true for gasoline.

Just last August, Congress passed an energy bill that requires oil companies to remove the additive MBTE starting this spring. Sounds innocent enough, but it's requiring a major, costly retrofit and cleanup that's taking money off the table for other badly needed investments.

Worse, U.S. rules have made it prohibitive even for low-cost foreign companies to come here and supply our market. As oil economist Philip Verleger recently noted, "the U.S. and the European Union have erected the equivalent of trade barriers by imposing increasingly tight specifications on petroleum products."

There is, for instance, the U.S. effort to cut sulfur content in gasoline, a move that began in January 2004. The EU adopted similar rules on diesel. As a result, foreign producers can't make money selling finished petroleum products here. It costs too much to comply with our byzantine rules.
First Fuel Banks, a prepay program here in St. Cloud, has had its price rise from $2.659 to $2.799 in the last three days, but there seems to be no end in sight to the bad economics and forecasting people perpetuate in talking about gas. It's gotten bad enough to reach Snopes.

Hentoff on campus free speech 

Nat Hentoff takes up the Murdock case today.
The cartoons aside, on many campuses, the right to free speech, however contentious, is under siege. The politically correct "speech codes" � forbidding speech that might offend one's race, sexual orientation, religion, et al. � have been folded into codes of conduct under the continuing assumption by some students and administrators that there is a constitutional right not to be offended.
I do find the picture shown with the article a little odd since there's no mention of Notre Dame in the article. Was the USA Today trying to say that the Vagina Monologues and GLBT groups are having their campus speech rights infringed? Weird, but no weirder than the president of Century College saying that Murdock's speech rights have not been infringed.

Take-down Sally taken down 

That's more like it. Less than ten days after Sally Jacobson, a professor at Northern Kentucky University, encouraged a class to tear down a display of crosses for aborted fetuses put up by the campus' right to life organization -- a display that they had to get permission to show, and did -- the university has shown her the door. The school's president issued a statement that makes clear the place for free speech on a college campus:
By leading her students in the destruction of an approved student organization display, Professor Sally Jacobsen's actions were inconsistent with Northern Kentucky University's commitment to free and open debate and the opportunity for all sides to be heard without threat of censorship or reprisal.

It has been heartening that student and faculty groups that do not necessarily support the position of Northern Kentucky Right to Life have come out strongly in support of the organization's right to be heard through their display. This reflects a commitment to the importance of free speech and inquiry as a hallmark of our University.
As ACTA Online notes, alas, the school still has a speech code and the inexecrable "free speech zones" to regulate student speech. Let's hope the aftermath of the Jacobson incident includes NKU reevaluating these policies so that their light doesn't stay red.

This looks useful 

FIRE has created a kit for students to use that wish to know how to understand their rights on campus and how to defend themselves. It includes the highly valuable guides that describe a student's rights to free speech, due process, the use of their student activity fees, etc. It's unfortunate that it costs $35, which might deter students of more modest means (such as many at state universities like ours), but perhaps some generous benefactor will subsidize the cost of the materials in the name of freedom.

Tuesday, April 18, 2006

Markets prevail 

Reading George Borjas' piece this morning in the WSJ (subscriber's link) reminded me of the discussion we had Saturday on NARN about immigration. One of the points I didn't get to make -- it is amazing how fast two hours can go! -- is that opposing immigration of workers, even unskilled ones, is pointless. Capital will follow skilled workers wherever they go, which is one reason for Borjas and Katz's finding that when investment is considered the effect of immigration on aggregate wages is nil. Only the least skilled workers -- high school dropouts -- suffer losses. Greg Mankiw points out that just like international trade in goods, international trade of labor -- the importation of workers -- creates both winners and losers.

But the article that really caught my eye this morning was Don Boudreaux on TCS, making a case I recall from many years ago. Here's Boudreaux:

Suppose for the moment that the world does possess only a fixed amount of capital goods -- a fixed amount of factories, robots, machine tools, industrial chemicals, and R&D labs. In this case, Americans would indeed suffer from improvements in foreigners' work ethic, education, and emancipation from their governments' misguided regulations. Some capital goods that today are here, raising the productivity of workers in America, would relocate tomorrow to other countries whose citizens can now use much of this capital more effectively than they could in past. As capital flees America, the productivity of U.S. workers falls because these workers will be partnered with fewer efficiency-enhancing capital goods. ...

But one of the defining features of the modern world is capital's expansiveness, its non-fixity. Capitalists the world over know that in every place governed by a rule of law and marked by a reasonably free market, a strong work ethic, and a spirit of commerce, profits can be made by employing workers there. And this employing of workers is done by creating capital in those places.

As people in China and India become freer, and as advanced technology enables them better to serve customers in America, some jobs currently done in America will indeed be 'outsourced' to these distant lands. But America's loss of some capital to foreign countries creates opportunities for other investments in America.

The reason is that as some capital and jobs leave America, workers -- along with some supply routes and capital equipment remaining in America -- are freed up to work at other tasks that in the past were insufficiently profitable. By freeing up this labor and capital, outsourcing increases the profitability of new investment opportunities. These diligent and honest workers, along with some capital equipment, remain in place, willing to work, all in an economy and culture friendly to enterprise.

This reminded me of a very influential book to me during the early 1990s called Quicksilver Capital. Richard MacKenzie and Dwight Lee make a vigorous case for how capital breaks down barriers erected by governments. Images of China knocking down residences to pad the pockets of its political elite can cause foreign investment to dry up (if they can take housing away from their citizens, couldn't they take your factory's revenues too?) MacKenzie and Lee writing after the first election of Bill Clinton seem to foretell what has happened:

What he and others in the Clinton camp do not seem to realize yet is that the human capital at the disposal of the wealthy is more fugitive on a global scale and less subject to government expropriation than the physical capital of corporations. Physical capital can only be shipped across the globe at the slow pace of boat travel. Human capital in the form of brainpower can travel to any point on the globe at close to the speed of light through the world's interconnected network of computers and satellites.

International money markets and integrated world stock and bond markets will teach on a daily basis our country's leaders lessons that they now seem to resist. National elections conducted every four years will remain important. But votes of confidence and approval will be taken daily in the world markets, which because of the country's ties to them can be ignored only at great peril. Clinton has already sought to assure markets that he intends to make markets work better. If he doesn't hold to that promise, the next four years will prove interesting, a test of the relative power of domestic politics and global markets in shaping national policies.

Strict immigration laws are the use of government expropriation to create economic rents for native labor. The beneficiaries, including consumers who get goods at lower prices, are not able to organize as effectively as the AFL-CIO and others. But it doesn't matter, for capital will flow to those places where property rights are secure. Boudreaux again,

So when particular goods and services become more profitable to produce elsewhere -- because of the principle of comparative advantage -- these features of the American economy that prompted the initial investment don't disappear. They remain. And they prompt entrepreneurs to create new capital and jobs in place of the departed capital and jobs.

America grows richer, not poorer, as we trade openly with a freer and more prosperous world.

America is the richest place because America allows the greatest scope for specialization and exchange. As Adam Smith showed 230 years ago, those are the keys to the wealth of nations. Short of erecting huge tariff walls, of which strict immigration laws are only one part, capital will continue to expand the circle of potential traders and reside with those with the most opportunities.



I saw the video to which Craig Westover refers on "Special Report" last night, and it is quite compelling. However, I wouldn't call it "eminent domain". That would imply Chinese citizens have some kind of property right to their homes. They do not. The Chinese system of hukou restricts travel and binds citizens to their hometowns, so that health care for example can not be had outside their place of residence. These were also common in Ukraine ('propiska') until struck down in its constitutional court in 2001. (That is where I got interested in them.) The internal passports control where one lives and works.

Hujou is a means by which the Chinese can control flight of its poor rural areas to the free enterprise zones. However, given Chinese labor shortages now cropping up and coverage of the effects of a lack of property rights, we may find pressure to stop these internal passports there as well.


Monday, April 17, 2006

Speaking of cartoons... 

Jim Paine provides a public service in hosting a transcript of Ward Churchill's speech at DePaul University last October. Maybe Prof. Churchill is going for the Hunter Thompson style; if so, he fails miserably. I could only read about three pages.

Murdock responds 

Karen Murdock responds to the former Green party candidate for mayor of Minneapolis. This is her complete letter to the Progressive Calendar, unabridged except for inserting the link to the cartoons.

I am sorry to hear that Ms. Farheen Hakeem feels moved to instigate a boycott by Muslims of the college where I teach, Century College in White Bear Lake, because of what she calls my "racism." Before I posted the Danish cartoons of the prophet Muhammad I tried, like any good teacher would, to put them into an educational context by posting background material on the dispute and blank pages for people to respond to the controversy. (You can read more about the case at )

Cartoon riots are unusual and newsworthy. The cartoons that sparked worldwide riots and homicide deserve and even demand to be shown, especially in a college environment. Discussion works best when the people engaging in it can see what they are discussing. Most non-college newspapers in this country have refused to show the cartoons and, despite a student population of 12,000, we have no student newspaper at Century. That seems to me all the more reason to show the cartoons on a faculty bulletin board. (All 12 cartoons, and explanations necessary so that non-Danes can understand them, can be found at .)

I am not a racist. I am a teacher and a seeker after knowledge. It is my proper job to encourage discussion. Ms. Hakeem's attempt to persuade my college administrators to punish me for my actions is unfair.

The fundamental question is, what practices ought to prevail in a humane secular democracy? Just as seekers need to know what they are seeking, so they need to be free from oppression in their search. Open and very vigorous discussion-- even of provocative issues--is the way that we, as free people, deal with controversy. Repressing free speech is short-sighted, shameful, unwise, and untrue to the noble vision and perpetual challenge our Founding Fathers gave us in the Bill of Rights.

Friday, April 14, 2006

Hubba-hubba, let's read Horowitz! 

The sad part is, I can just picture this happening at SCSU.
Scott Savage, who serves as a reference librarian for the university, suggested four best-selling conservative books for freshman reading in his role as a member of OSU Mansfield�s First Year Reading Experience Committee. The four books he suggested were The Marketing of Evil by David Kupelian, The Professors by David Horowitz, Eurabia: The Euro-Arab Axis by Bat Ye�or, and It Takes a Family by Senator Rick Santorum. Savage made the recommendations after other committee members had suggested a series of books with a left-wing perspective, by authors such as Jimmy Carter and Maria Shriver.

Savage was put under �investigation� by OSU�s Office of Human Resources after three professors filed a complaint of discrimination and harassment against him, saying that the book suggestions made them feel �unsafe.� The complaint came after the OSU Mansfield faculty voted without dissent to file charges against Savage. The faculty later voted to allow the individual professors to file charges.
Now if you'd like to complain abbout Mr. Savage's book selections be my guest, for I wouldn't use them for a first-year-experience course. But to say having that discussion constitutes harrassment is just one more example of the lack of academic freedom on American campuses for the academic right. As David French (formerly of FIRE, now at the Alliance Defense Fund) points out,
It is astonishing that an entire faculty would vote to launch a sexual harassment investigation because a librarian offered book suggestions in a committee whose purpose was to solicit such suggestions.
UPDATE: I note via the Volokh Conspiracy that the Kupelian book was considered anti-gay. Again I must ask, where else would you like students to read this book? On a plane, or in a classroom where open discussion can be had and the students taught of its bias (if it exists)?


My report card 

Money magazine has ranked the job of college professor as the second best job to have in the United States. The rankings are based both on salary and on letter grades awarded on various factors. Professor received a B for stress, A for flexibility, A for creativity and C for difficulty. Software engineer was the only job to rank higher.

Stephen thinks there's grade inflation in that stress score. I say it depends on how much administering you do or how many committee assignments you cannot duck. We're doing our re-accreditation self-study this year, and that will eat you alive if you get stuck on that committee. I should know :(


Do computers in classrooms help learning? 

A recent study says maybe not.
About 37% of the children say they stare at the screens for more than three hours a day; a few report more than five hours a day. Parents help kids with homework more often and students' grades benefit slightly, but teachers report more classroom distractions as students check e-mail. And students actually feel distracted: In the first year, their grade-point averages rose modestly, but when Lei and a colleague asked them to estimate their GPAs, students actually believed they dropped.

"They felt that time is not used as effectively as before," she says.
I've sat in the back of college classrooms doing peer reviews and watched students on their own laptops. These students largely are using their computers to look at class materials, even though wireless internet is available. Put them in a networked classroom however -- as I often do for my forecasting course -- and checking email and IM'ing are common.

My moral: If the student bears the cost of the computer, s/he will only choose to bring it to class if it actually helps them learn. Buy one for them that they would not have bought otherwise, and you've got a recipe for electronic inattention.


Is it management or economics? 

Perhaps one means of dividing left and right bloggers will be to see their reaction to the news that much of the money spent on temporary housing for Katrina victims has been ill-spent. People who think government should be run like a business -- which some think is how Bush sold himself to the public -- or who think the right people wouldn't be so incompetent have an entirely different view of government than those who recognize that government is inherently inefficient. Only the last can be considered part of the reality-based community.

Reason gets a gigantic "toldja so." So too CAGW.

Thomas Sowell as well:
In both emergency times and normal times, governments have different incentives than private businesses. More fundamentally, human beings will usually do more for their own benefit than for the benefit of others. The desire to make money usually gets people in gear faster than the desire to help others.
Privatized disaster recovery -- you've seen the commercials for the guys who clean your basement after it's flooded or your kitchen after a grease fire? -- is quite capable of dealing with these issues. The problem with Section 8 has to do with a lack of incentives to increase the stock of housing or to improve the existing stock. In a disaster situation, there are no incentives to rebuild unless HUD were to change tack and move from subsidization to the old-fashioned policy of building new housing. See here FMI.

Categories: ,

Thursday, April 13, 2006

Just go read this 

Erin O'Connor, blogging at ACTA Online, has a beautiful contrast of two Pennsylvania schools with two different demonstrations about immigration. In one corner is a liberal at Penn who is "mobilizing students" and recommending his classes to a pro-immigrant rally. The campus paper reports it blithely. But let the College Republicans at Penn State create a "Catch the Illegal Immigrant Game" and the campus administrators fret about 'civility'. They'd do more, Erin points out, except for FIRE busting their chops for repeated First Amendment violations. The quotes Erin has from PSU administrators make plain the bias against campus conservatives.
There is a strong sense, from her statement, that while the CRs' "unfortunate actions" are showing a lack of respect for "the dignity of all individuals within the university family," the CRs do not themselves deserve to be accorded the same basic respect. To be a full member of the university "family" (a loaded term that totally mischaracterizes the proper temper and tone of campus culture), one must accept the implicit politics--and accompanying etiquette--endorsed by that family.
Read the rest.


Ford's other shoe 

It dodged a bullet a few months ago, but the St. Paul Ford plant will close in 2008.
Earlier today, Ford announced it is reorganizing its Canadian and South American operations. That announcement made no mention of its ongoing realignment of production in the U.S. states.

But word quickly spread after meetings between Ford officials at Dearborn, Mich., and union officials that St. Paul and Norfolk, Va., plants are to be closed as part of a major realignment of production that seeks to reduce a total of 14 Ford plants by 2012.
At least we should be grateful that Ford didn't take up the corporate welfare offer from Governor Pawlenty:
The news is disappointing, but not unexpected given dramatically declining Ford Ranger sales. Minnesota proposed our own innovative ideas to keep the plant open. We were also willing to meet or exceed any offered incentive package. In the end, however, Ford indicated its decision was not about subsidies or bailouts, but about larger economic trends.
According to state Sen. Richard Cohen, it doesn't sound like any amount of money or legislation would have been enough. Truth be told, the Ranger was a declining product, and Ford simply decided it was time to give up the line.

Categories: ,

Wherein I stick one toe in the Iraq debate 

This makes a lot of sense to me. It has struck me for awhile that nobody proposed a unified Yugoslavia. The questions there were how to break up the joint into small parts with sufficiently secure borders to let the new countries grow. In some parts -- Croatia, Slovenia -- it's done well; in Bosnia or Macedonia not quite as well; in Serbia, there's much still to be done. So why not three states for Iraq? If it's "all about the oil", aren't there treaties to be used to payoff the state that ends up on less oil-enriched land?

What's going on now strikes me as nothing so much as an attrition war.

So what's a few rules among friends? 

76 percent of the respondents thought that institutions broke National Collegiate Athletic Association rules when recruiting players.

"People are wary of the recruiting process," said Rick Gentile, a professor of sports management at Seton Hall and director of the poll. "They like the purity of college athletics."

Yet 74 percent of the respondents thought that administrators placed importance on graduating their players, and 66 percent believed that coaches did so.

Almost all respondents -- 97 percent -- thought that college athletes should be tested for performance-enhancing drugs, while only 55 percent thought they should be tested for alcohol use.
Source (temp link; permalink for Chronicle of Higher Ed subscribers.) "Placing importance" is a pretty weak statement; I place an emphasis on eating low-calorie food, but I also "place importance" on the taste of chocolate donuts and Humpty Dumpty potato chips. (It's a Maine thing.) The near-unanimous support for drug-testing isn't very surprising -- we live in a society where everyone is quite happy to make someone else pee in a bottle, just not ourselves. But here's the one tha really made my eyebrows rise:
About one-fifth of the respondents thought that college basketball players intentionally influenced the outcome of games because of gambling interests.

One-fifth? Looks like this story got more coverage than I originally thought it would. (The more technical version of the story is here.) If one-fifth of people really think games are fixed, who bets?

Phil Miller argued a year ago that pointshaving wouldn't pay off if you just gave the student-athletes a stipend. He's right. But given how much is bet and TV money continuing to flood schools, who has a stake in stopping this?

Categories: ,

Wednesday, April 12, 2006


Mitt Romney is trying to invent something out of nothing:
Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced. And we will need no new taxes, no employer mandate and no government takeover to make this happen.
Well how about that! So how do we invent this? Mitt's plan has three parts:
Some 20% of the state's uninsured population qualified for Medicaid but had never signed up. So we built and installed an Internet portal for our hospitals and clinics: When uninsured individuals show up for treatment, we enter their data online. If they qualify for Medicaid, they're enrolled.

That isn't free, then -- it's a cost shifted onto the Federal system.

Another 40% of the uninsured were earning enough to buy insurance but had chosen not to do so. Why? Because it is expensive, and because they know that if they become seriously ill, they will get free or subsidized treatment at the hospital. By law, emergency care cannot be withheld. Why pay for something you can get free?

That's a gross oversimplification. They may choose not to buy insurance for many reasons that make perfect sense, including the possibility that they are healthy. Yes, emergency care may be needed in catastrophic circumstances, but the solution to that is a catastrophic plan. The welter of insured services demanded by the Mass plan goes far beyond catastrophic care.

Arnold Kling points out that if the costs go beyond the premium by much in this case, the insurance companies -- who have been compelled to create these plans -- will have a claim on the state to hold them harmless. So what we will have, in short, is state-provided catastrophic care, rather than individual-mandated. In short, Kling says, if you are requiring premia of less than $2000 for health insurance that on average pays out $6000 per policy, someone is getting soaked and it won't be the insurance companies for very long.
Another group of uninsured citizens in Massachusetts consisted of working people who make too much to qualify for Medicaid, but not enough to afford health-care insurance. Here the answer is to provide a subsidy so they can purchase a
private policy. The premium is based on ability to pay: One pays a higher amount, along a sliding scale, as one's income is higher. The big question we faced, however, was where the money for the subsidy would come from. We didn't want higher taxes; but we did have about $1 billion already in the system through a long-established uninsured-care fund that partially reimburses hospitals for free care. The fund is raised through an annual assessment on insurance providers and hospitals, plus contributions from the state and federal governments.

How did the fund gain such a surplus? It is paid by a combination of general tax revenues from other state government, the federal government, and a tax on insurance providers and hospitals. The last are being taxed with one hand and given back part of their money with the other. The rest of their money -- which before would have made up for the shortfall from free care -- now would be given to individuals instead to subsidize their purchase of health insurance.

If I understand this right, the fund becomes irrelevant if nobody is uninsured ... so what keeps putting money in that fund?

As Don Boudreaux says, damn reality.

*There Ain't No Such Thing As Free Health Care For All


A worthy senior project 

We have our students write senior papers as their capstone expreience. Craig Depken has a great graph showing the relationship between gas prices and Bush's presidential approval ratings.
One of my current econometrics students is working on a similar hypothesis, trying to determine which is more important to presidential approval, accumulated U.S. deaths in Iraq or the price of gasoline. While the talking heads and the far left would have us believe it is the former, it is all too likely that it is really the latter.
I am not as sure, since it could well be that U.S. deaths in Iraq might be correlated with the price of gas. And of course there are other factors that influence the price of gas that might also influence presidential approval -- are gas prices higher when the economy is expanding, for example, which also moves presidential approval? But this would be a great example of senior project, if any of my students are reading here.


Tuesday, April 11, 2006

What color is the manager's parachute? 

Particularly when she manages a failing fund?

Managers of a struggling pension fund for Minneapolis teachers are drawing criticism from the Minnesota state auditor over an administrator's new compensation package.

Lawmakers are considering merging that fund with the larger state Teachers Retirement Association, forcing the state fund to absorb nearly $1 billion in unfunded pension obligations to Minneapolis teachers.

That's why State Auditor Pat Anderson expressed outrage that the Minneapolis teachers pension board extended the contract of its executive director, Karen Kilberg, a year beyond the date when the fund would cease to exist under the merger. The deal, approved in March, also granted her a six-month severance, making the entire package worth $215,000.

"This is a brazen act by the board to provide a golden parachute to an outgoing employee at taxpayer expense, knowing the organization may not exist after July 1," Anderson said.

Ann Downing, president of the Minneapolis teachers pension board, defended the move as necessary to keep an administrator around to manage the merger.
This is part of a continuing saga and crisis in the MTRFA that threatens a healthy fund -- in which, for full disclosure, I have a relatively small part of my retirement account from the days before I could get TIAA-CREF on campus -- with merger from an unhealthy one. The bill making this merger reality is HF 2847, wending its way through the Legislature as you read this. Maybe this callout from the auditor's office -- not her first, either -- will finally get some media attention on how the costs of a mismanaged system in Minneapolis is being shifted onto outstate teacher pension plans.

(h/t: Douglas Bass.)

Categories: ,

Data note on good/bad jobs 

An interesting sidenote to the jobs report is raised by Steve Antler, who is interested in whether the job growth is in good or bad jobs.
For some time we've been a cheerleader for what used to be called "Lucas supply." The principle now goes by many names, but they all amount to the same thing: profit recoveries lead employment/wage recoveries.

He asks about the EPI's report on good/bad jobs, which isn't really what the EPI report does. That report shows that real wage growth has been greater for workers at higher levels of income, not by job classification or change in wages. It says it's from "author's calculations of CPS data", but the CPS doesn't show me anything that could be of help. (This maybe?) I would instead look at the CES data on real earnings.


Century College Cartoon Capades attract a loon 

It appeared for awhile that the story of Karen Murdock and Century College would die down without much more. But I received a forwarded email from her last night indicating that former Minneapolis mayoral candidate Farheen Hakeem has sent a letter to CC President Larry Litecky calling for a boycott of the school until he and Prof Murdock "understand the consequences to your actions." Prof. Murdock asked my opinion of the letter, and herewith is my reaction:

Ms. Hakeem is a nut.
Dear President Litecky, I would like to express my opinion about the recent incident in which Professor Murdock posted controversial cartoons against Muslims on the bulletin board outside of the Social Science department. I had learned of the incident from David Shove's progressive calendar, where Professor Murdock had a speaking event to address this. I asked Professor Murdock if I could speak with her. She called me this morning. I told her how I felt her actions of posting the cartoons were racist.
You request a call from the woman, she calls you, and you proceed to tell her that her actions are racist. And this after the woman is invited to speak at a progressive event. That might get me a little hot under the collar. How did Prof. Murdock respond?
She explained that her intentions were to start a discussion and she felt there was a need to "get the whole story" and that is why she posted the cartoons.
Which is the purpose of college, isn't it? To have discussions?
I told her that even though we may not intend to commit racist actions, often times we do.
And I would tell you, Ms. Hakeem, that if that is the viewpoint you take, if you see the world as filled with "racist actions", then you have a worldview entirely at odds with the goal of free inquiry that academics support. You have no idea what the purpose of a university is, and you have therefore no ability to engage this discussion.
And we perpetuate this racism until someone points it out to us.
The word you are looking for here is "censorship". Or perhaps two words: "chilling debate".
I said to her it is not always pretty, but someone needs to do it. Trying to point out other people's racism is a seizure of power; it is the act of imprisoning others in your emotional fragility.
I told her that I thought her actions were distasteful, insensitive and dehumanizing to Muslim people. I challenged her to imagine what it would have been like if there was a Muslim student walking by the board and saw those cartoons.
She doesn't have to imagine, Ms. Hakeem. She left paper on the display for people to write their impressions, and they did. She received email from them. The school held a forum for Muslim students about their experiences, who did not express fear. And when she went so far as to place the cartoons behind a curtain, and tell everyone the cartoons might be offensive to some, that was not enough. It went beyond protecting Muslims; it went to censoring non-Muslims from seeing the cartoons.
The College of St. Catherine's had call me to do a speaking event about the cartoons a while back. I work with youth, and found 5 eloquent Muslim teenage girls to attend the event and speak on the issue. We had an open, honest, and respectful discussion, and there was no need for the cartoons to be posted. I don't understand how posting those cartoons were to add to the discussion.

Define "need". Define "add to the discussion". The process of free inquiry knows no bounds; your inability to understand how the cartoons "add to the discussion" is yours; it is the limits of human understanding, and recognizing that others may be able to add where you cannot. Your inability is completely human and reasonable; your refusal to show them to others is the arrogance of thinking everyone thinks like you.
It is very clear to me that Century College is not a safe place for Muslims. Not only has there been no consequences given to Professor Murdock for her hurtful actions, but she does not even want to be educated about why it was hurtful.

You dare say this after she attends the Muslim forum? You dare say this after she speaks at a progressive event of your fellow travellers? You dare say this after she returned your call? You are a nut and you are arrogant.
I told her that Muslim youth are constantly being bombarded with images of the war in Iraq, Afghanistan, and Palestine on television. To attend a school where a professor feels so self righteous to put these cartoons up might stress a kid out. She shows no compassion or remorse. She condescendingly apologized for my feelings and never her actions.

There are no shortages of cartoons on campus, many intended to cause people stress. Your type calls them "speaking truth to power" while the posters hide behind tenure. Your type practices the "culture of constraint." And as to apologizing for someone's feelings, see Cynthia McKinney.
I serve about 100 teenage girls in the Twin Cities, where I will be telling them to boycott Century College. In addition, I have CC'ed several Muslim organizations and they may choose to follow. I believe in the power of non-violent, grassroots action. I think the power of the dollar not going to Century College, but going to another community college where Muslims are actually respected will hopefully make you and Professor Murdock understand the consequences to your actions.

A boycott of a hundred teenage girls. At least they live in a place where they can get an education.

What you are calling for, Ms. Hakeem, can only be called non-violent if anything short of physical coercioin is called non-violent. You are doing violence to free speech on campus. You are doing violence to the ability of individuals to think for themselves. You want to imprison others to your emotional reactions, have them not just respected but in fact exalted.

In whose name? I daresay, not the subject of the cartoons.

The only way in which this type of behavior can be countered is by emailing President Litecky or call his office at 651-779-3342 and expressing support for Professor Murdock. So far I believe the president has acted well in letting faculty resolve this among themselves (although I don't agree with their solution, it was arrived at by proper means.) It would be a shame if loons like Ms. Hakeem are allowed to pressure him to act against Prof. Murdock.

As always, see FIRE for more information.

Monday, April 10, 2006

Not like White Cloud 

Stephen Karlson reports that the University of Wisconsin has trouble getting recruiters to come to campus because the pool of graduates is insufficiently diverse. UW requires that three-quarters of its students come from a state that has a population less than 10% black and Hispanic combined. Minnesota is 3.5% black and 2.9% Hispanic in the last census.

But how well will students do, more generally? From a review of "The Toolbox Revisited".
If we are going to close gaps in preparation � and ultimately degree attainment � the provision of curriculum issue has to be addressed. The highest level of mathematics reached in high school continues to be a key marker in precollegiate momentum, with the tipping point of momentum toward a bachelor�s degree now firmly above Algebra 2.
Even of students in Minnesota who take the SAT -- which are on average the top fifth of their high school classes, since the ACT is more commonly required in the midwest -- less than 75% of them report taking beyond geometry. Scores go up when you get to trig and beyond.

And taking those courses by students of color in Minnesota just isn't happening.

Categories: ,

Bummer of a re-birth mark, Bat'ka 

Isn't this lovely? Nobody shows up to Alexander Lukashenko's inauguration for his third term, and his friends the Russians cut off his supply of cheap gas. This is quite lovely, given Lukashenko had already given away his pipelines for the cheap gas only four months ago.

He who sleeps with dogs wakes up with fleas. And now he can't even leave the kennel.

Categories: ,

It was only a matter of time 

An unidentified high school senior in Dix Hills, N.Y., whose SAT was scored low incorrectly is suing the College Board and a testing company it hired to scan the tests and manage essay scoring.

The lawsuit, which was filed Friday in Minnesota, is the first since the College Board notified 4,411 students last month that their scores from the October test were too low. The suit seeks class-action status for the students, asking for unspecified damages and an order that the 600 tests that were incorrectly scored too high also be adjusted.
Source. Given the deterrence effect a low score has on where students send their applications, I'm betting the unspecified damages will end up being substantial. Pearson has badly handled the fallout of their error -- which, for all we know, might have been a freak event -- and if I'm the College Board, I buy out their contract at once.

If you don't get out ahead of your mistakes, they will devour you. See the meat industry (Tyson Chicken) and its buyouts after meat gets tainted with something. That's the model Pearson didn't learn from.

Categories: ,

Friday, April 07, 2006

Give me ten teachers like this, and I could change a town 

If you haven't read Stuart Buck's visit with an old friend who teaches English, don't wait any longer.
Too many students who are arriving in 10th grade English not even knowing how to read, and having been �socially promoted� for their entire lives. My friend said (and I paraphrase from memory):

�I�m doing the best that I know how to do, but you know how reading tests are written: They�re full of little logical tricks to make sure that you read and understood the question. How am I going to get someone who doesn�t even know how to read to pass that kind of test? It�s just impossible for me to spend one or two semesters and get someone caught up on 9 or 10 years of schooling. And then there are always some kids that just don�t care, and no matter what I try, they just won�t do the work. So the government is going to tell me that because of a handful of students that are unreachable, therefore I�m a bad teacher? No way.�
Reading later on, you see that this teacher is willing to take extra steps for his students. But at the high school level it is too late for many of them. I'll bet that most of these kids went to middle schools. Many of the students this teacher felt couldn't read may well have been able to at one time but have had the switch turned off. Social promotion results from a push for equity that lies at the base of the middle school movement. You needed to catch these students in remediation long before they arrived in 10th grade.

(h/t: Joanne Jacobs)


I'm shocked! 

You mean, that Education Minne$ota listening tour was a complete waste of time?

Wow, man. That blows my mind.

No-so-double-blind referees 

Reader/guest blogger jw notices an article in today's Chronicle of Higher Ed about scholars learning the identity of referee reports on articles they've submitted to journals.
Keyne A. Cheshire, an assistant professor of classics at Davidson College, in North Carolina, who describes himself as new to scholarly publishing, said he recently discovered the issue by accident. After submitting an article to a journal in his field, he received a reviewer report by e-mail, forwarded from the journal's editor (he declined to name the journal or editor). The report, which Mr. Cheshire said included some "hefty criticism" of his article, arrived as a Microsoft Word file attached to the e-mail message.

When Mr. Cheshire opened the document, he noticed that it seemed to be created using a British version of Word. Curious, he clicked on the document's preferences and was surprised to see a screen labeled "Summary" that listed the name of the person who had created the document -- someone in his discipline whom he knew.
jw says he can't believe people are this naive. I'm not: Even Congressional staffers writing talking point attacks on Supreme Court justices sometimes forget to erase the evidence.

By the way, dear scholars, if you are sending a paper to a journal that does double-blind refereeing of articles (reviewer doesn't know identity of author, author doesn't know identity of reviewer), just don't send it using Word. Print it to .pdf, open the file in Adobe, hit ctrl-d for properties, and erase everything on the summary page (don't forget to save again!)

This has been a public service of SCSU Scholars. You're welcome!


Thursday, April 06, 2006

How much more voter fraud would you like? 

Because the DFL is trying hard to make it easier.
Minnesota's same-day registration law requires proof of residency, which often is done with a driver's license combined with a current utility bill. The bill that passed the Senate on a 39-26 vote extends the list of acceptable IDs to those issued by colleges and high schools, and adds cell-phone bills to the list of utility records.
Maybe you would like to get started on yours now. Buy five, get the sixth free! The bill was sponsored by John Hottinger, DFL-St. Peter, who has some students in his district.

He STILL doesn't get it 

Even the title of USA Today's interview with Mikhail Gorbachev, Soviet Union 'should have been preserved', indicates that he never understood what it was he was doing. Here's a simple rule I have for deciding if politicians understand how markets work: If they use the words "mismanage the economy" or some synonymous phrase, they're clueless. And sure enough, here's Gorby:
Q:You opened up Russia to democracy and a market economy. But President (Vladimir) Putin seems to be rolling everything back, seizing the independent media and even imprisoning an oil tycoon who was a rival. How do you view his presidency?

A: Putin inherited a terrible situation from (former leader Boris) Yeltsin. With Yeltsin, the Soviet Union broke apart, the country was totally mismanaged, the constitution was not respected by the regions of Russia. The army, education and health systems collapsed. People in the West quietly applauded, dancing with and around Yeltsin. I conclude therefore that we should not pay too much attention to what the West is saying. Putin has now stabilized the country. What he has done is not perfect. But Russia needs stability as a foundation for continuing to modernize.
Stability of what, exactly? The political structure, as he points out himself earlier in the interview, needed liberalization but ran into resistance from the nomenklatura, the political class of red managers who eventually tried to arrest Gorbachev and stage a coup. And the economic situation was a nightmare, as output fell 20% over the two years before the coup.

Opening up an economy to market forces doesn't mean managing differently. It means STOPPING management of the economy. Yegor Gaidar, the first prime minister of post-Soviet Russia who attempted to create a market economy through shock therapy, explains:
What do we mean by the strengthening of the state? If we mean that we will have effective, non-corrupt tax service, non-corrupted courts, a non-corrupted police, effective armed forces, then I would vote for that strengthening of the state with both hands. But we don't have that.

The best way to get non-corrupted government is to reduce its power and thereby its allure to the corrupters. This point has always been lost on Gorbachev, and it eventually lead to his own downfall. After fifteen years, he still doesn't get it.


Stick a fork in clear English bill 

The bill that would have removed from a classroom any instructor who didn't speak clear English for 10% of the class got wiped out in committee yesterday when the author of the bill, Rep. Bud Heidgerken of Freeport, replaced the entire bill with an amendment that formed a task force to study the issue.
Heidgerken decide not to push the "speak test" or other controversial elements of his bill, and agreed instead to allow the committee to amend those elements out of his bill. The bill, which passed the committee, would simply set up a task force made up of students, faculty and parents to study the issue further.
You have to get to the last paragraph to find that change, because the local media has been having far too much fun talking instead about the 'horror stories' of students who couldn't understand their profs. I liked best this story, though, told by our faculty union legislative director, Russ Stanton:
"Last semester my daughter didn't get a very good grade in biology, and when I asked her, she said she had trouble understanding the professor," recalled Stanton.

"The only problem is, I know the professor - he served on my government relations committee - and I can understand him quite well."

Stanton went on to say that the language barrier is part of college life and that these students will have to deal with people with accents the rest of their lives, because of the increasingly global economy. In other words, he said having international professors is good training for real life.
I have disagreed sharply with Russ on many issues and no doubt will again, but on this one he has represented my position well.

BTW, the AP article on this is utterly misleading -- you will never learn from it that the bill has been gutted.

Categories: ,

Wednesday, April 05, 2006

Privatizing ballparks 

The City of St. Cloud and its summer college team, the River Bats, are trying to hammer out an agreement for the Bats to take over management of the baseball fields currently held by the City. A public discussion last night brought out any number of local amateur baseball officials who are concerned about access to Dick Putz and Joe Faber fields. (Can't blame them in one sense -- they're nice places to watch a game.) The agreement calls for cash payments to the city in return for the River Bats' collection of concession and signage revenue. The amateur teams are concerned that the River Bats will hoard the most desirable dates for their own home games. The fields are often used for high school, American Legion and town baseball play, and host several tournaments.

The city's budget indicates that concession revenue from all Municipal Athletic Complex sources -- the two ballparks, the municipal ice arena, and the golf course -- is about $350,000. I can't break that number down further, nor do I know what the cost of providing concessions were. Ad revenues were about $110,000 -- how much of that is the signage to be given to the Bats under the agreement is still unknown. In return for this the city would get $95,000 in 2006 and $127,000 in 2007 from the Bats, as well as rental fees. After those two years there would be a review to extend the time and terms of the contracting arrangement for another eight years. Any expenses related to concessions or signage are paid by the Bats.

The scheduling agreement offers some protection of the other teams:

...on or before November 1, 2006, and on or before November 1st of each year during the term of this Agreement, the City will provide the River Bats with 47 evening dates for the each season. Of these dates, at least five will be Friday evenings, and at least five will be Saturday evenings. On or before January 1, 2007, and on or before January 1st of each year during the term of this Agreement, the River Bats will provide to the City its selection of 34 of the available dates for scheduling of River Bats games.

This doesn't freeze out other possible users, but establishes a time by which a tournament would have to let the City know the dates it wished in order to allow the City to black out those evenings. What the amateur teams want is a continued free lunch at the expense of the city and River Bats ownership.

And the River Bats not only have to live with scheduling uncertainty at the ballpark but also a lack of improvements to the facility. The complex has transferred in almost a million dollars in bond revenue to stay in the black, while making less than a quarter of that in improvements. It receives half of its continuing revenue in rental fees, which it appears the city would keep.

So the city presently is subsidizing amateur baseball at taxpayer expense, while also shorting improvements and running the stadium below its cost. Isn't that just the sort of thing that cries out for privatization?

Categories: , , ,

Back door tuition tax credits in Arizona 

This is pretty cool.
Senate Bill 1499 will create a corporate tax credit for businesses that donate to non-profit organizations that distribute private-school scholarships. The total credits are capped at $5 million annually and will allow scholarship organizations to provide vouchers to Arizona children whose family income does not exceed 185% of the income limit to qualify for a free and reduced price lunch. The program, which provides vouchers worth up to $4,200 for K-8 and $5,500 for high school, includes a five year sunset provision.

This is on top of personal tax credits that exist in the Arizona tax code. It's not clear to me how the cap would work, but it's a nice way to leverage private business to help identify students in need of scholarships that provide real school choice.

(h/t: John LaPlante)


Tuesday, April 04, 2006

Opportunity costs in everything 

The city of St. Cloud says it spent $43,000 in its search for missing St. Cloud State University student Scot Radel of Owatonna.

The expenses include overtime and equipment. The St. Cloud Police Department spent more than $24,000 and the Fire Department nearly $19,000.

The 21-year-old Radel disappeared February Second during a night of drinking with friends. His body was recovered from the Mississippi River on March First. An autopsy determined that Radel drowned.

Police Chief Dennis Ballantine hopes the state will help cover some of the search costs.

So whenever you have a search for a missing person, you get to shift the cost to someone else? The police budget is $10.7 million and the fire department another $5.25 million. So your budgets were reduced by 0.27% to search for a young adult.

But you wonder, don't you? If the $43,000 was not spent on searching for Scot, what else would it have been spent on? Is the $43,000 a gross cost that includes overtime and equipment. If there would have been no overtime without the search and the equipment would not have been rented, yes, those are real costs, but the way this is worded makes you think the cost is really less.

All considered, I think the chief should have let this go.


Categories: ,

Throwing the tar out with the bathwater 

Tongue Tied picked up the local story on a local politician who referred to the city's human rights commission as a "tar baby". Local leaders are going all David Howard on him. It's too bad that these groups are allowed to diminish our language ever further; for their next trick, perhaps these groups can ban Chef's Luv Shack from area stores.

I also think the Times running this piece two days (the second so they could cover his letter of apology to the commission) is a bit of overkill. Has anyone seen coverage of Cynthia McKinney in the Times?


Another shot across the bow of Middle Eastern studies 

Inside Higher Ed reports that by the end of a meeting of the US Commission on Civil Rights, the commission passed on a 4-1 vote a recommendation that the Office of Civil Rights ...
should protect college students from anti-Semitic and other discriminatory harassment by vigorously enforcing Title VI.� The commission also found that �many university departments of Middle East studies provide one-sided, highly polemical academic presentations� concerning debate about Israel.
According to the Chronicle of Higher Ed, the recommendations also "called on university leaders to denounce hate speech on their campuses and to ensure that all academic units, including departments of Middle East studies, 'respect intellectual diversity.'" The words "cold day" and "Hell" come to mind...

Mr Haney-ovich sells PhDs 

You heard, did you not, that Vladimir Putin may have copied scads of his dissertation from a textbook? This is hardly unusual. Oksana Yablokova reports that you can hire a whole firm to write up your dissertation and prepare you for a defense.

The Russian system of academic degrees is different from most Western systems and includes a "candidate of science" degree, which is roughly the equivalent of a Ph.D., and a higher degree of "doctor of science." Seekers of both degrees are
required to write a dissertation and defend it before an academic board.

Firms that offer to write dissertations estimate that up to 30 percent of all postgraduate students resort to their services these days, and they said the number continued to grow.

Most students seek a candidate of science degree but are too busy to put their careers on hold for the six or more months that it takes to write a dissertation, industry experts said.

I saw lots of people with "candidate" next to their names. Most of these are in economics or law. They are almost required as a credential in ministries of finance or in central banks in the FSU where I've been. They have to be: At $1000 to $7000 per degree, the assistance is out of reach of most mid-level managers in the government.


Monday, April 03, 2006

Frat house dictionary 

So while I was away there's a story that some fraternity at the University of Minnesota has been suspended for "strapping", "showering", and other pre-initiation hazing of pledges that included, well, barnyard animals. Two problems for me, firstly this:

The memorandum from officials of the Student Activities Office to Jerry Rinehart, vice provost for student affairs, listed four primary areas of hazing: strapping, showering, livestock barns and pre-initiation.

...The memorandum said the various forms of hazing "could have caused serious injury'' and "could elicit long term emotional and psychological trauma in members."

The memorandum noted that the chapter leadership "was fully cooperative and admitted that they were aware that the activities were inappropriate, but also did not know how to stop the patterns and asked for our assistance."

They "did not know how to stop the patterns"? That's a very interesting defense. "We could not figure out how to stop our members from hanging pledges upside down off balconies and pouring water on them; stop us before we hand another kid a condom in the livestock barn." But if that's not enough for you, the Chronicle of Higher Ed's news blog links to a letter from the frat's national office that called this behavior a violation of the office's "risk management policies." I assume that's legalese for "don't do this or we'll get sued." Somehow, I'd've hoped the threat of lawsuit was inframarginal, not the deciding factor.

Categories: ,

Bat'ka anekdoty 

Veronica has some jokes (anekdoty) strung together that help tell how Belarus is dealing with the fizzling out of the protest against the rigged elections. I miss Russian humor.

Interestingly, Bat'ka seems to be keeping a low profile. But the detainees are not.

Back from New Orleans 

My thanks to Jim for filling in for me last week. Part of my absence was due to a conference in New Orleans I attended over the weekend with #1 son, who turned 21 and I thought would like to see the Quarter. I'm glad I took him, because the Quarter was about the only thing running normally there.

I won't give you a long post on what's wrong with New Orleans, because one weekend in town doesn't make you an expert. My usual method of investigation is a lot of cab rides: cabbies know things and will be happy to tell you. Also, talk to bartenders and hotel staff. In New Orleans, you can also spend a good bit of time investigating the city by visiting the French Market. It's where I go to get the usual thing or two you have to bring back for the family.

Elections are going on in New Orleans, and the one thing you hear is that the current mayor, Ray Nagin, isn't coming back. The signs for him say "Our Mayor" with a huge, disembodied head of the incumbent. It's really freakish. Meanwhile, t-shirts are having great fun of his "Chocolate City" remarks, with a recurring theme of "Nagin and the Chocolate Factory", or a more troubling chocolate bar labeled Chocolate City and in small print below, "with French vanilla flavoring." I don't think race relations are going very well there.

You see this as well in the thing everyone talks about, which is the housing shortage. I asked about this -- we economists love to talk about shortages, because for us they're to be fixed by prices rising -- and the story always came back to Section 8, low income housing projects. One bartender put it this way: The government pays $800 per unit, and the landlord gets an additional $100 a month or so from the resident. The $800 comes whether or not the unit is filled. So there's no incentive for upkeep. The houses that came down, particularly in the lower Ninth Ward of NO, were these low income units. The bartender cited a statistic (a female bartender that can cite statistics and fix White Russians that are heavy on the Russian -- where was she 25 years ago!?!) that 52% of the housing in New Orleans was rental, and only 20 of the 52 were private rental units. So when the article linked above says 184,000 units in Louisiana were knocked down by Katrina, what you have to wonder is how many of them were in disrepair? And now the landlords are being invited to use federal money to make up for investments they did not make, and then to return the units to Section 8, to go through this again? The residents there now think those who are away are just waiting for the subsidized housing to re-appear, and they're not wanted. One said "that's why Nagin wants the absentee ballots because those people are his voters."

This is driving the politics of the locals I spoke to there. Many restaurants and bars are closed; attendance at the conference I was at was down at least a third, maybe more. We walked yesterday into Cafe du Monde at noon (on a Sunday!) and found empty tables; we walked into a popular restaurant without reservations at 7:30 on a Friday night and were seated in a room with only two other tables taken. The naughty shops on Bourbon Street had dropped cover charges just to get what few tourists there were in the door. It's a hard time still. Yet we could find a busker at midnight at Jackson Square playing a water glass xylophone (I've seen him before, and he was as entertaining as ever) and street musicians generally were still playing and having fun. My son found that the best part of the trip.

At one time on the radio I said that I thought NO would come back because too much infrastructure had built up around its existence as a port. Container traffic that I saw was still present, and I still think regeneration will happen. But the city has less than half of the people it had before Katrina, and I wondered with some friends whether a tipping point had been reached for New Orleans. Not yet, I would guess, but it wouldn't take a whole lot more.