The Chronicle of Higher Education today put out a special note (and placed this article on its free space) about an FBI program that cross-checked financial aid records at the Department of Education. Any parent of a college-age kid knows about FAFSA, a form students can fill out and give to all the schools to which they apply for financial aid. When I applied to colleges in the 1970s I had to fill out one of these for each school -- now students file one through the government.

While this doesn't seem to be a violation of law, it comes in the middle of a fight between the Dept. of Education and the higher education establishment over the former's plans to track individual student progress and generate a database to report that information to the public. The higher ed establishment says this creates data privacy issues, which are highlighted by this case. This is the quote that piqued my curiosity:

"This is troubling, but not surprising," said Terry W. Hartle, senior vice president for government and public affairs at the American Council on Education. "It's hard to be surprised when the government is mining every single database. In the war on terror, there are no safe harbors."

Mr. Hartle called the Education Department's project a "perfect illustration of the dangers of the unit-record system." He pointed out that, to receive federal aid, students must either be U.S. citizens or have a green card. "This is about finding Timothy McVeigh," he said. "This is not about finding Mohammed Atta."

A couple of things struck me. First, I think we are somewhat interested in finding Timothy McVeighs, though of course they have full rights. But the form says that "if the information that you submitted indicates a violation or potential violation of law," the data may be turned over.

Second, I wonder if Mr. Hartle is worried about the availability of safe harbors for terrorists? It's an odd quote.

I was aware of the restrictions on loans but I do think some international students -- even those without visas -- file FAFSA forms. According to this guide for international students seeking aid, there's no problem filing a FAFSA if the international student has a social security card, which can be received by some international students depending on visa type. Indeed, it appears you could file a FAFSA with any 9-digit number in the SSN field -- while it will get flagged for failing to match name and number, it will be nevertheless in DoEd's records. Those could be useful.

There were less than a thousand such searches of the FAFSA database, and I do not see any reference in the Chronicle article as to whether there were any leads generated from it. The story was written by a j-school grad student using FOIA filings to obtain the information. Obviously the Chronicle believes this is an important story, and no doubt this is because they believe it harms the efforts of DoEd to bring greater accountability to higher education. But if we have now exposed another datamining activity that is actually harming our ability to track both the Attas and the McVeighs, the fallout of the colleges' unwillingness to be accountable for what they produce could be deadly.

UPDATE: Welcome Captain's Quarters readers! Ed notes an LA Times article on the subject calls this datamining, when it appears the FBI was asking for records on specific names. From the Times' third paragraph:

Authorities said the program was limited to "fewer than 1,000" persons who were considered witnesses or "subjects" of federal terrorism investigations. Most of the searches were conducted in 2001 and 2002; the program ended in June of this year.

Do we have an accepted definition of datamining? Someone needs to get that to our j-schools soon. But my point here isn't so much that but to point out that Hartle's statement that only US citizens and green card holders filed FAFSAs isn't entirely correct. At any rate, it doesn't appear like enough others did so to make it worth the FBI's time.

According to a poster on the SCTimes chat, Government School District #742 was passing out signs asking for a 'yes' vote on the referendum on Sept. 12 for a bond to build a new school. I'm not sure that's legal -- I don't think it is but I am not familiar enough with the law in that area. At any rate, it's unseemly regardless of your views on the referendum.

I've been struggling with the financing on this referendum. The selling point on the levy has been that it will only cost someone $3 more a year on $150,000 of assessed value. (Here's the calculator they use to show this.) But how they do this is to roll an existing levy into the new one. And the school district will have to renew its operational levy, which will be argued it has to do because of state legislative actions. Whatever debt remains to be paid -- which is quite low, looking at the data from the state auditor's office -- stretching it out means people in the future will be paying for the debt for the next 20 years. Moreover, if you had let the existing debt retire -- which as best I can tell would happen in 2007 (I may be wrong about this, but the school district doesn't put its full budget on its website) -- your taxes would have gone down by $99.

$25 million of this goes to a new school in St. Joseph. I have no problem believing it's needed out there (of course, I would rather see private school alternatives out there or another STRIDE Academy, but leave that argument for another day.) And $2 million in a separate question would be voted for a separate land purchase for the fast-growing SE St. Cloud-Haven area. But the school district went and muddied the waters by adding in $8 million for a passel of gifts for various constituencies from science labs and auditorium upgrades to maintenance work and pool covers to keyless entries and sinks and countertops for the home economics program. Why? Why isn't this something we fund out of operational expenses, since these types of expenditures are normal expenses? Why did the school board allow these special interests to attach an extra $8 million onto a bill to help out growing St. Joe? Perhaps to get them to hand out signs at a school open house?

UPDATE: Another thought about charter schools, this time from Joshua Sharf:

We did have one caller, Robin, a middle-school principal, who argued that charters need to upgrade their teacher certification standards, a typical claim from a union that would like to extend the close shop to beyond the shop. If charters are outperforming (or even matching) public schools using less restrictive teacher certification, that just says that at least some of the standards the unions have helped impose are either irrelevant or outright damaging.

Why not have a charter open up in St. Joe?

A new report released by our school's Career Services office says that the job market for new grads strong in Minnesota. And economics is one of the top programs in demand.

The majors most in demand haven't changed since last year, the study found. Top sought after majors included business, marketing, economics, communications, accounting and psychology/sociology.

The retail industry offered the most opportunities for new grads, with 77 percent of employers in that market saying they planned to increase hiring. The financial services industry followed closely behind, with 68 percent of employers expecting to increase hiring.

The least sought majors included history, political science, chemistry and graphic design.

30% of the surveyed firms expect to pay 4-6% more for new hires this year versus last. An executive summary of the report is here.

History and political science lowest in demand. Who knew? But chemistry is quite surprising to me.

Littlest and I are going to the Dome to be help the Twins snap out of this Royal funk. Bad enough they start my Red Sox' downward spiral; they are NOT going to take the Twins out too. Back later.

We have in The Chronicle of Higher Education (subscribers only; temp link) the story of another faculty member who is part of the Scholars for 9/11 Truth. I suggest you look at that last link first. Then consider these two quotes from the Chronicle article:

Gov. John Lynch, a Democrat, said through a spokeswoman on Monday that Mr. Woodward's view, which the professor has discussed in his political psychology class, is "crazy and offensive." The spokeswoman, Pamela Walsh, said that Mr. Woodward's view shows "a reckless disregard for the true facts and raises questions as to why such a professor would be teaching at the university in the first place."

A university spokeswoman, Kim Billings, said that Mr. Woodward was entitled to his First Amendment right to free speech. "We support academic freedom," she said. She argued that Mr. Woodward was free to discuss "case studies," such as the September 11 terrorist attacks, in the classroom, saying that he was "entitled to his opinion."

Nevertheless, as requested by the chairman of the University System of New Hampshire's Board of Trustees, administrators are looking into Mr. Woodward's teachings and his past student evaluations.

Mr. Woodward was gratified that officials, including Andrew E. Lietz, chairman of the Board of Trustees, and J. Bonnie Newman, interim president of the main campus, at Durham, have spoken out in favor of free speech in his case, though they said they disagreed with his views. "I was very heartened to have an affirmation of academic freedom," the professor said on Tuesday.

But Mr. Woodward said he wished that his critics would read his syllabus and visit his class sessions. "I don't press my own views," he insisted, but he does share them. He said he also tries to get students to come to their own conclusions after viewing evidence and hearing all sides of debates on "hot-button issues."

As Mike pointed out during his guestblogging here when discussion Prof. Barrett of Univ. of Wisconsin, Prof. Woodward is engaging in protected speech, a position with which I agree. However, Mike argued "the university has painted itself into a corner" by hiring this professor who appear to be unqualified. I do not know this. This is, after all, a political psychology class -- denial of historical events might well be part of political psychology.

UNH should refrain from looking into this professor's syllabus and student evaluations for anything more than the usual process for promotion and tenure. If he's unqualified to teach, there's a process by which we deal with those issue. Stick to them.

I thought this was an odd quote last week in the International Falls The Daily Journal

We, too, had some concerns about the program when Gov. Tim Pawlenty first launched it. The program appeared to target rural areas, but when places like St. Cloud were designated JOBZs we wondered about the intention of the program. And already, the St. Cloud zone has attracted the most JOBZ projects.

JOBZ is a brainchild of the Pawlenty administration. Rather than being a motivator for people moving from out-of-state, however, it's largely helping local businesses stay open and move to JOBZ-designated areas.

"We've provided incentives to move economic activity around the state, from one part to the other," [U of M Prof. Laura] Kalambokidis said. That can be beneficial if the business is moving from a congested part of the state with low unemployment to an area with high unemployment. But it's not clear that's happening with the JOBZ program, she said.

Some economic developers who have tried to entice companies away from the Twin Cities say they've had better luck helping companies in their back yard expand or make a short move to a JOBZ development site.

Although St. Cloud is one of the areas closest to the Twin Cities, it hasn't drawn any Twin Cities companies north, said Tom Moore, president of the St. Cloud Area Economic Development Partnership.

Moore attributes the high number of JOBZ projects in Stearns County to a focus on local businesses interested in expanding.

"We did land Arctic Cat from Thief River Falls," he said. "They would have gone to Wisconsin if we hadn't had JOBZ."

The Arctic Cat plant, which will make engines for all-terrain vehicles, will employ 50 people when it opens this fall. The main competition for the plant was a site in River Falls, Wis. Wisconsin had offered $3.75 million to Arctic Cat in a package including city financing, land, property tax breaks and state assistance.

So when I hear people brag about JOBZ, my question is whether it is simply moving firms around the state -- in which case the cost-benefit analysis would be, well, interesting -- or if it's moved a company from one place to the next? If it's the latter, then the question is whether such tax programs help. This is one of those times when I think the liberal answer might in fact be right, as this small business owner seems to agree.

Here's the problem with this type of information from the Census -- to contribute to Eric Black's big question today -- it's a snapshot, taking stock of who has how much money, who has health insurance coverage, etc., at a point in time. The stock of people without health insurance at one time might be larger or smaller than the stock at a previous period in time, but that doesn't tell us who those people are. What we want to know is not just how many people are without insurance at a point in time, but how long it lasts.

Moreover, as this study from the Census Bureau makes clear, the data used to make these claims about rising lack of health insrance coverage is from the Current Population Survey that is less accurate than the Survey of Income and Program Participation. Only the latter gets at the dynamics by asking the same individuals about health insurance over time.

Although both surveys are household surveys conducted by the United States Census Bureau, they are designed to meet different needs and, hence, have different sample sizes, interview techniques, sample compositions, and survey reference periods. Accordingly, the two surveys produce varying health insurance coverage rates.

The CPS ASEC, which collects annual information, found that 83.6 percent of people were covered by health insurance for some or all of 1998. The SIPP, which collects monthly information, found 92.0 percent of people covered by health insurance for at least 1 month of 1998.2 Since the SIPP collects monthly information and allows us to see changes from month to month, SIPP may be closer to the truth.

As best I can tell, the 2004 SIPP data for health insurance coverage is not yet available. The 1996-99 wave of participants showed 8.3% of individuals without insurance for an entire calendar year, while another 13.3% had no insurance for at least one month in that year.

The difference between the CPS studies and the SIPP studies is like the difference between a photograph and a movie. Which one gives you a better representation of health insurance coverage?

Here's another problem I've been thinking about. Suppose you're an incumbent running for re-election. Your state has matching funds to give to candidates who agree to spending limits on their campaigns and the amount is somewhat substantial. You have just about reached the spending limit on your own fundraising with about 70 days to go to the election. Your opponents are well behind you in fundraising and will undoubtedly take the matching funds and agree to the limit. Your decision to make: Do you take the money and limit yourself?

Two complications: First, if you don't take the money and abide by the limits, your money goes in equal shares to your opponents, relieving them of some of their money trouble. Second, your opponents and you both receive assistance from third-party interests who are not subject to any limits; your opponents have access to substantial amounts of those funds.

Now if I'm writing down this problem, it looks like this. I am going to try to maximize the number of votes I receive, which is a function of the amount of money I spend (E), the place on an assumed (heroically) political scale I occupy (P), and the money and place on the scale the opponents occupy.

max Vself(E-self, P-self, E-opp1, P-opp1, ...)

subject to the constraint that E is less than or equal to the amount of contributions I get for each of the candidates self, opponent 1, opponent 2, etc. Because I'm an incumbent, my wiggle-room on casting myself differently on the scale is limited -- I have a record.

This is the problem Tim Pawlenty is facing this week. Can he afford to give Mike Hatch and Peter Hutchinson each about $240,000 so that he doesn't have to abide by the limit of $2.4 million, which he seems to be ready to eclipse? In particular, can he if...

Two Democratic-leaning campaign committees, the Alliance for a Better Minnesota and Minnesotans for Change, reported raising more than $1.5 million between them so far this year.

It may be that he could abide by the limit and still win, but his winning margin will be pulled down. It strikes me, looking at what he's done lately, that Pawlenty has decided not just to win but to maximize his vote total, thus his looking like a pro-life Democrat. (DFL please note: You have a few of these around that still call themselves Democrats. See Pennsylvania FMI. You might want to run one yourself some day.) I believe he is doing that to burnish his credentials for any national aspirations he might have. He will say no, of course, as he should -- but there's little to gain from hewing so close to the center when the other major candidate seems to have a series of small implosions each week except to run up the score. (Again my economist bias -- nobody's stupid, we just have to figure out the objectives of the actors.)

The Hatch campaign is commenting that "If they don't abide, they know they would face criticism and public disapproval." But I doubt it makes much difference, particularly two years from now. If he wants to run up the score, and if he believes he's well ahead, Pawlenty should turn down the state money.

Most everyone is talking about this lead article in the New York Times this morning, arguing that real compensation for workers has not kept pace with labor productivity. Of course some people use this to give vent to their inner Communist, while others handwring over the lack of good jobs. Luckily for us, Russell Roberts is on the job, pointing out the source of the data for this article is none other than the Economic Policy Institute, a liberal DC think tank. Median wages are unusual to use, and more so when you are looking only at cash wages instead of total benefits.

The graph on the left is median average and median wages measured as net compensation, from the Social Security Administration that uses the average number to set cost of living adjustments for Social Security benefits. It specifically excludes any payment to a worker that is not reported as taxable income on the worker's W-2. The ratio of median to average has declined as seen in the graph -- so EPI and the NYT are using the less-favorable number to make their comparisons. But when you look at labor's share of GDP, Roberts points out, the ratio of the wage bill to GDP is still at 70%. It's just that more of that share is being paid in non-taxable portions than before.

David Altig points out that the ratio of GDP going to capital could rise without it being paid by a reduction in labor's share, since indirect taxes and subsidies get in the way. But that's probably not what is going on here. Roberts makes the fine conclusion:

What keeps my wages high (and yours) is our alternatives. Is there any evidence that workers have fewer alternatives than they once had? If anything, workers are more mobile today than ever. What sets workers wages are the wages of those alternatives. That depends, generally, on our skills, our knowledge and our drive and discipline—human capital and how well we are able to apply it. Workers are better educated than ever. That is why I believe that compensation, properly measured, is higher than it was five or ten or twenty or thirty years ago.

The return on education keeps growing and people keep coming in larger numbers to higher education. Why would they do that in a world of falling wages? Why would you invest in human capital if its return was negative? You wouldn't.

Tim Worstall comes at this a little differently and thus gets only close to the answer:

So, yes, productivity has been rising strongly, wages have not been. This sad state of affairs will continue while productivity grows faster than GDP. It explains all of the observed facts, without recourse to some conspiracy theory about screwing the workers, orthe rich keeping it all for themselves.

That leaves a very important question -- how is it that productivity has grown so much? The problem is, of course, that most people measuring productivity are measuring just the share of output growth that is not attributable to an increase in labor hours. Today also happens to mark the release of the first estimates of multifactor productivity for 2005. It shows a slowdown in MFP versus 2003 and 2004. Output per hour rose 2.6% in 2005, but 0.7% of that was due to more intensive use of capital (for which its owners should expect some return) and another 0.1% due to changes in the education and experience of the workforce. In short, the capital per worker ratio rose by 2.3% -- there was an increase in capital intensity. That accounts for almost a third of the increase in productivity. (Looking at the underlying data too quickly tells me the cost of labor has risen faster than the cost of capital, thus inducing some technological substitution towards more capital-intensive production.)

But any fool can come up with a number to prove his point. Economists should study people's behavior before looking up their spreadsheets. If wages were so stagnant, why would people invest in their 'wetware'?

I don't know what is more exciting. Writing a blog post on my new X41 in my own handwriting (I'm training the tablet) or watching Duane milk a cow.

The StarTribune got around to republishing an article from the WaPo on how poor students' vocabulary had gotten ... at Elon College, which is a fairly selective institution. These are not average students in one sense but are so in another -- they do not read good literature. I always find myself at events like J-Wood Saturday Night (such a good event the host needs a few days off) trying to remember the books I read growing up. Mom and Dad subscribed to those Readers Digest Childrens Condensed Books, and Dad was smart enough to know that if he left some of the Classics Illustrateds only sort of hidden but not really, they'd be read. And they were.

Parents also used games. Dad had me playing poker with his friends while Mom was at work (Dad worked nights, and no, it wasn't as bad as this but I did get the occasional swig of a PBR) as well as cribbage. From this I believe I knew how to add any two digit numbers by the time I was six. And I still fancy myself a pretty good Scrabble player, though I'm told I'm too competitive so the family won't play with me. There were very few board games at the house except for Scrabble and Risk until I discovered Avalon-Hill warboarding.

So as I came back from the Cities today I look in the rear view mirror to see Littlest reading The Two Towers. And I think I read it about that same age. And I think she won't be stumped by 'derelict', 'brevity' or 'pith'. It was nothing special I did other than say she could watch the movies only after reading the books.

By the way, she's quite good at cribbage, and we are available to kick your butt in doubles, any time. It'll be good practice.

(h/t: Reader jw.)

Sean Hackbarth has run a webloggers league for some time now in which I've played (won the first year, but have not managed to claim the title since) and we need a few more players for a draft tomorrow night. Interested? Follow this...

When my letter last week to the St. Cloud Times drew enough heat to get a provocative reaction from the ex-mayor (btw, John, I've decided that needs to be on the masthead), I expected the Clark campaign to send out some kind of reply. Sure enough the reply came (and on a Sunday, unlike my letter and that of my wife's, both of which came out on the low-readership Saturday -- I smell a rat).

I'd go for full frontal fisking, but the letterwriter is a student (I checked the email lists) here at the university and a DFL delegate. So if she ever should be in one of my courses I would not like to have said anything negative about her. But whether she does or does not, a little economics lesson for this student is in order. She writes:

All of our lives are enriched by tax dollars.

I wish to understand what she means. Tax dollars are collected by the government under threat of force. Thieves do the same thing; the only difference is that thieves are sent to jail for doing so -- government officials who do so seek reelection for "enriching us". Is it enriching to take money from one person and give it to another? Was Robin Hood enriching lives?

How about Hezbollah? The Financial Times notes today that that group has a building arm that is re-creating southern Lebanon (it has the lovely name "Construction Jihad.") In one case government destroys your income by confiscating it even before it's in your hands and then gives it back to you. In the other case government (at least part of it, despite the Lebanese government's claims of inability to control the Hezbollah party within it) throws bombs at Israel and then rebuilds the country leveled in response to the provocation. Is this "enriching", Ms. Michel?

Well, perhaps that's not exactly what you meant. You added in the next sentence,

Schools, roads, law enforcement, community programs — we all benefit.

But to what extent? If you should come to an economics class that discusses public goods, we can talk about a tax-price one pays for a public good one receives. One problem with public goods is that we all have to consume the same amount. If the tax-price paid is greater than the benefit received, we are forced to consume something we would not otherwise choose. (Spot and Craig, please note.) Economic choice is about net benefits, not total benefits. If I force you to trade me $10 for an ice cream sandwich on a January evening, you benefit from the sandwich but you're probably still unhappy.

Here's the problem most of us have, Ms. Michel, with the stadium and Tarryl Clark's vote. You can point to there being some benefits as well as some costs. Hey, I teach cost-benefit analysis in my classes, and you should try it! But the question I raise with Senator Clark's vote is: Who gets to decide if the costs are greater or less than the benefits -- the Minnesota Legislature? Or the residents of Hennepin County who will mostly pay those costs? So when you state...

The people of Hennepin County were Clark's priority when she supported this legislation because it would put more police on the streets and provide kids with positive safe activities in their communities.

...my question is, who in Hennepin asked her? And by her action did she just leave us more vulnerable to the rapacious Pogemiller and his tax committee to force St. Cloud to tax itself to pay for something a majority of OUR taxpayers do not want? (Particularly now that he can't hide behind Ellenbecker's thirst for tax dollars.) "First they came for Hennepin, but I said nothing, for I do not live in Hennepin..."

Note to Senator Clark -- this is a question you should answer. The student's letter had more holes than the Viking offensive line last year. Next time, write the letter yourself.

That's the opinion of a survey by the National Association of Business Economists' policy panel (I am one of the 195 respondents to the survey.) Here are some additional details from the survey:

• The current expected value for next summer's price of oil is $74.60. I think that sounds about right -- maybe a few dollars higher than what I answered, but the difference is certainly insignificant.


• If Iran stops exporting, the median expectation is that the price would go to $90.40. The most common answer (that's the mode) is $100. I believe I answered right near the median; Iran has about 10% of world reserves, but exports probably only 3% of world output.


• If Saudi Arabian and Kuwaiti oil supplies were cut by conflict, then the expected price rises to $119.80 according to the survey.


• When asked which statement agreed most with their opinion, almost half said "The world still has enough oil, but our dependence on the Middle East is a major problem and we need to use less." Less than ten percent felt the statement "There is plenty of oil, current problem caused by the politics of the Middle East" most closely matched theirs and 6% said there was plenty of oil and that the Middle East will settle down. 16% said regardless of how much oil we hve, "global warming is a major disaster and we need to cut back on fossil fuels."
  

More people thought monetary policy currently was just right than too loose or too tight. Wide margins thought government spending and taxation would rise at rates about the rate of inflation. (I wish they would ask that as rate of inflation plus rate of population growth, so we could interpret the answer as saying the size of government will grow or shrink.)

Top three answer to "what do you think is the US's greatest economic strength today": flexible economy and labor force; technological lead and strongh productivity; deep capital markets.

Mrs. and I went to Keegans last night to witness the Fraters triumph (the NARN team seemed lost without its economics and Slavic history exper -- Jeopardy feh! -- while Hugh's team came in a very respectable second.) Good to see so many people there. Politics was high in the air as Derek Brigham and Barry Hickenthier combined their blogging skiils with a desire for change to become legislative candidates. I think Mrs. loves this stuff, as she spent most of the night getting the inside dope from various and sundry MOBsters. It was one of those nights that makes us wonder why we don't live in the Cities. (The answer will come Monday when I have to go to work for real.)

Has there been many examples of groups of bloggers creating candidates for political office? And is it just a rightroots thing? What's different between organized blogospheric campaigns for the Ned Lamonts, the alt-press coverage of the Thune and Kennedy campaigns, and these ground-up campaigns of Derek's and Barry's? We'll try to ask these questions on the air this weekend as a variety of political people from all across the spectrum visit us this weekend.

NARN at the fair, today (11-5) and tomorrow (12-4). We'll see you there as the Banaian family weekend vacation continues. Near the spaceneedle and the international bazaar and across from the leadaHorticulturebutcantmakeherdrink Building.

I'm writing QBR this morning then off for a fair Fair weekend. Here's the 411.

• Tonight, 9pm at Keegans, the Trivia Smackdown with Hugh Hewitt, James Lileks and a number of contenders. Chad has the tote board up. I am available for late drafting to a team if need be, since Mitch and Ed somehow think Inge knows more than I do, as if hair and big speakers on a pickup truck somehow confer knowledge. Contact me ASAP if interested in creating the biggest longshot sensation since Sea Biscuit.
  
• Saturday, with guest host Michael Brodkorb, 3-5 at the Fair behind the Horticulture Building. Michael has had the deets on Dittrich all week, and more about the tiff between Mike Hatch and Judge Leary. We have a wide range of guests possible, with real hopes to hear from state DFL party chair Brian Melendez. What I don't have yet are times for these guests, so I'll just encourage you to start with the Fraters at 11 and stay on the Patriot until 5 for all the action.
• Sunday NARN does a special Fair Sunday broadcast starting at noon, with me back at 2pm with more local action.

We're staying in the Cities this weekend, and I'm excited to bring Mrs. and Littlest to their first Great Minnesota Get-Together. Hope to see you there!

P.S. -- that does mean I'll be posting lightly today, but will post through the weekend, contrary to my usual standards.

One of my commenters on the textbook post yesterday reports something we already know, that textbook prices in the US are higher than those overseas. That reminded me of a paper I read last fall discussing this type of price discrimination. Textbook prices in the US are 50-100% higher than in the UK, they show. Why?

Possible explanations can be broadly categorized as relating to cost factors, preferences, or market structure. ... we argue that explanations based on cost and market structure can not explain differences of the observed magnitude. We claim that price diffrences are almost exclusively demand-driven and discuss several reasons why US consumers are willing to pay so much more than their UK counterparts for textbooks. Our preferred explanation is that demand differences are the result of the different status of textbooks in the educational systems of different countries.

One thing that supports that view is that for other books, the US book price premium is much smaller (30% premium for textbooks, 12% for other books.) The premium is much, much larger for science textbooks, and the premium is nearly 50% for commercial hardcover textbooks.

What this tells the authors that it's probably not cost -- most books are printed in the US, even those sold in the UK. And it's probably not us evil professors either, since faculty in the UK aren't logically any more sensitive to the cost of textbooks to students than US professors. However, a good look at syllabi in courses in other countries indicates how much less important textbooks are in teaching there versus here.

In the United States the textbook is an integral part of college education. In most courses instruction centers around a single textbook that contains most of the material, as well as exercises and practice problems. The textbook is the main reference for students and it is usually labeled as "required" for the course. In the UK, textbooks are not used in the same way. Students are usually given a list of books that are meant to be study aids rather than mandatory textbooks. Thus students feel much less of an obligation to buy particular books, meaning that willingness to pay for textbooks is lower than in the United States.

If the style of education is different in two places, and one relies on the textbook as an input more than the other, is that something that should be corrected? I have found that my students are not happy about using readings and being sent to libraries for materials. Overseas, that does not seem to be a problem (my experience there being very limited, I say that with caution.) And textbook publishers are now able to create so many customizations of textbooks for faculty (which of course have zero resale) that they may be increasing the agency problem, contrary to this paper I'm reviewing.

At any rate, and as most of the other commenters from yesterday's post have noted, search engines are breaking down the ability of textbook publishers to price discriminate (preventing resale is a requirement for price discrimination to be an effective strategy.) I recommend students try out either ABE (as Marty suggests) or use the UK Amazon site. That leakage for publishers is why they are creating more customizations of texts.

We had a faculty member here who taught for nearly 30 years before finishing his PhD (from the days when the university didn't consider the doctorate a requirement for appointment to the faculty.) Great teacher and maybe the best-read in both current affairs and economic history in the department, he was near sixty years old when he finished the degree, and that was certainly the oldest person to get a PhD in economics that I knew. He retired a few years later. I saw him at a retirement party we gave this summer and he's still reading his Economist and other periodicals and just as sharp on economic affairs as ever.

Sean at The American Mind finds someone older.

After a long and fruitful career, 79-year-old master’s degree graduate Herbert Baum has returned to the University of Chicago to earn his Ph.D. The oldest person ever to be awarded a doctorate by the University, Baum will receive the degree in economics Friday, Aug. 25.

Congratulations, Dr. Baum! May we all have such a love of learning at that age. And Katie at A Constrained Vision notes his committee includes James Heckman, Milton Friedman and Gary Becker, all Nobel winners. You can bet that this is no honorary title.

I hate to do this, since I know about half the editorial board of the Times on a first-name basis, but today's was a little too much for me to resist. After running an article Monday on textbook costs, the paper predictably ran an editorial lamenting high prices for stuff people buy. (Worth noting: People also lament low prices for stuff they sell. Ask a farmer.)

So what to do?

There is a national movement known as Make Textbooks Affordable. Among its efforts are working with student governments to do just that. Make Textbooks Affordable lists on its Web site about two dozen universities where student governments have passed resolutions supporting affordable textbooks.

As of Tuesday, no Minnesota schools were listed as either passing such a resolution or working to achieve that. Perhaps St. Cloud State University could become a leader of this effort in Minnesota. Such a resolution can send a strong message that students are serious about lowering costs.

So your information Monday about students using alternative sources for books online, or used books, or book exchange, or students sharing books -- none of those will send as strong a message as a resolution? I am sure McGraw-Hill is quivering in its boots right now.

Make Textbooks Affordable says it surveyed professors and 76 percent said that new editions were justified “half the time or less,” while two out of three said they used the bundled items “rarely or never.”

Such findings indicate there is plenty of potential momentum for changing market conditions. One thing professors can do immediately is let students know whether they need to have the latest edition of texts, or if used texts still provide adequate educational content.

This assumes that all faculty on campus don't give a flying fig about the cost of the textbooks they use. Maybe they could care more, but there's ample evidence that they are already trying to reduce costs. I get email from students asking about previous editions or the use of ancilliaries. My preference is for books that can be read online; they are usually cheaper, more current, and will link to the ancilliaries automatically. (I very rarely get complaints from students not having access to computers; five years ago, I would have.)

Lower costs by minimizing production expenses. Perhaps that means fewer pictures or no color in books.

In a foreign language primer, maybe. In a botany text, no. Colors help with graphs in economics books, though I agree in some cases people go overboard. (My monograph on Ukraine was held down in price -- even though it's still too bloody expensive -- by my reduction in the number of graphs, but more by my drawing them camera-ready myself.) The problem with this thinking is that the price is a function of cost, when the fact is that price is a function of demand and its inelasticity.

Give preference to paper or online supplements instead of producing entirely new editions, especially for introductory courses and subjects in which material does not change much.

Again, those are already out there. The biggest problem I have with them? They get lost in the student's dorm room or apartment because of their size. And students who aren't required to hit the online materials regularly (i.e., for grade) will pay for something and not use it, because after all it's mommy and daddy's money, or it's a loan that they don't think about for years to come.

Allow professors to select unbundled textbooks.

Most book companies already do. Most faculty have that option. If you had bothered to check the bookstore, you might have already seen that.

Granted, we are not saying textbooks should be cheap.

Of course you are. You are only recognizing that free is impossible.

They are an essential component and expense of every college education. However, they should be priced fairly.

So how would you describe fair? The Times board is arguing that prices can be whatever the Times board thinks a group of fair-minded individuals would decide them to be. That's a complete misunderstanding of market principles. Prices are not something that we design to turn out a certain, 'fair' way. While prices are the result of human action, they are still unplanned.

Frequent reader and political scientist Steve Frank sent to the campus a synopsis of April Kelly-Woessner and Matthew Woessner's article "My Professor is a Political Hack: How Perceptions of a Professor's Political Views Affect Student Course Evaluations," published last month in PS, a journal of the American Political Science Association. The professors testified before the Pennsylvania legislative committee investigating academic freedom, and in some sense are following on the research agenda of Dan Klein (for instance, the likelihood of liberals getting higher SSCI counts than conservatives.)

The study uses survey results from thirty faculty teaching undergraduate political science at 29 colleges to 1,385 students. Interestingly, 27 of these faculty came from a postcard mailed to two hundred instructors (chosen at random) asking if they would agree to distribute the survey. 22 others wrote back to say they would not. You wonder -- why not just pitch the postcard requesting their participation?

But did it really matter to the sample? 23 of the thirty faculty are rated as left of center, with one person called "very liberal" and one "fairly conservative". When asked if they could be certain of this there was a good deal of variability. Also interesting to me -- the students were able to discern the ideology of the other students in the room, according to Kelly-Woessner and Woessner.

So, if you buy that students can tell the ideology of their professors, what does it matter? The authors explain:

[S]tudents rate faculty members who they perceived to be liberals more favorably on a number of faculty characteristics measures. As a whole, students are more likely to report that liberal professors “encourage students to express their own viewpoints,” and “work to provide a comfortable learning environment.” When professors are perceived as either liberal or Democrats, students are more likely to believe that their instructor “cares about students and their success.”

Those kinds of perceptions appear to be true both within a classroom and between classrooms. And it's likely that those things will be looked at by evaluative faculty committees and academic administrators in deciding who gains promotion and tenure.

Perhaps the most damning point is one for either conservatives or liberals to like. Kelly-Woessner and Woessner find that if you are perceived as being at an extreme in either direction, students systematically believe you are less able to give an "objective presentation". If I had a nickel for each time a faculty member at SCSU said to me that they were able to keep their politics out of the classroom so their extremism shouldn't be an issue, I'd probably quit my job. 35% of students were significantly different from their instructors in terms of party identification (versus 23% difference in ideology.)

How big a difference is it? On a five-point scale, the overall effect of being at least two points away (on a four-point party ID scale) was about 0.3 points. The highest and lowest overall rating averages in my department are less than one point, so 0.3 is meaningful. And being two points away could be simply your being a political moderate in a classroom full of liberal Democrats or conservative Republicans. It appears simply being away from the median view of students in either direction gets you in trouble.

Consequently, if the goal were simply to win the love and adoration of the students, clever instructors would merely pander to the median “voter.” By mimicking students’ views and reinforcing long-held beliefs, professors might score well on student evaluations, while providing no useful information at all. Indeed, many students would be more comfortable with a course if they could skip the readings or forego exams. Yet, college is not Club Med. As instructors, we ought not to refine our pedagogy exclusively for the purpose of making students comfortable or improving course evaluations.

Jason Czarnezki notes that perhaps teaching to the median student ideology isn't a good thing:

I think it points to some flaws in student course evaluations--what do they measure?; can they be manipulated?; is there a gap between student perception of what is good teaching and what is actually good teaching?

The answer to the manipulation is usually yes. I can give you one easy example -- if you return an exam or term paper the same day you take evaluations, your evaluations will be influenced by whether the students did well or poorly. If I wanted to spike my evals, then, I give an easy exam a week before evaluation and return them before handing out the evals. Kelly-Woessner and Woessner find that Democratic faculty are more likely to be perceived as grading "fairly and consistently."

Now at SCSU this is less of a problem, since faculty can report whatever parts of their evaluations they wish; there are some areas where the differences are sufficiently small. And you don't necessarily have to use evaluations at all. It would be my preference not to use them, but they are still considered a normal part of the evidence one provides for effective teaching; it is quite normal for job ads for faculty to make evaluations part of the material submitted with applications, particularly at more teaching-oriented institutions.

Maybe as this fertility gap continues to grow, it will be more conservative or Republican faculty that are treated well in student evaluations. But that's not currently the case -- 43% of the students in the Kelly-Woessner and Woessner sampe self-identified as liberal versus 29% conservative, with extremely liberals at 13% versus extremely conservatives 6% -- and so at this time the bias does cut against the conservative or even moderate faculty member.

Beloit College's list of features of the class of 2010
is out today, and the list has some things that make a guy feel old (a birthday that legitimately ends in a 9 comes next week for this professor.) Some items from the list.

1. The Soviet Union has never existed and therefore is about as scary as the student union.

8. They are wireless, yet always connected.

22. Mr. Rogers, not Walter Cronkite, has always been the most trusted man in America.

46. Public school officials have always had the right to censor school newspapers. (That's an odd choice!)

51. Michael Moore has always been showing up uninvited. (Now THAT's funny!)

56. They have never put their money in a "Savings & Loan." (Smiles from the money and banking profs! That's a whole lecture I no longer have to give.)

72. Richard M. Daley has always been the Mayor of Chicago.

Arthur Brooks' column in the WSJ yesterday on the fertility gap between liberals and conservatives is the kind of fun thing Art often writes. It isn't necessarily new though -- James Taranto has called out the 'Roe effect' for years now. But this morning, David French makes a very interesting observation about the effect of the fertility gap.

If this doesn’t highlight the importance of education to both sides of the political and cultural divide, I don’t know what does. For a long time, liberals and conservatives have argued over who ultimately controls a child’s education — the parents or the state. With parents typically more conservative and the education bureaucracy more left than even the mainstream Democratic party, it is easy to why and where the battle lines are drawn.

After decades of litigation, the balance of power is increasingly clear: While parents who can afford to do so have a right to opt out of public schooling (through home schools or private schools), if the kids are in public schools they are essentially wards of the state and can be subjected to all kinds of state indoctrination without parental consent. Just check out cases where students were forced to sit through lewd sexual programs (Brown v. Hot, Sexy, and Safer Productions), take sexually explicit and suggestive surveys at a young age (Fields v. Palmdale School District), and even participate in Wiccan rituals (Brown vs. Woodland Joint Unified School District). For a nice summary of the rights of parents to control their kids’ education, read this.

After the discussion in No Bright Lines last week, it is worth remembering what the stakes are. Should children born into modest circumstances become wards of the state? One side seems to say yes: It wants to determine that math and science should get special importance, for example, or use preschools to conduct mental health screening. Not to say that any of these things are bad things -- just that it is an appropriate discussion to have whether the proper decisionmakers are parents or the government education establishment. It gets more emphasis now because liberals are choosing not to be parents and thus have weaker stakeholdings.

Jay Mathews reviews Alexandra Robbins new book The Overachievers, and thinks the problem of stressed out high school seniors is overblown.

I have spent a great deal of time interviewing students and parents in the 20817 Zip code, where Whitman is located, and similar neighborhoods such as 10583 (Scarsdale, N.Y.), 60093 (Winnetka, Ill.) and 91108 (San Marino, Calif.) News editors and book publishers are susceptible to Robbins's argument because many of them live in such places, where family incomes are in the top 5 percent nationally and talk about school stress in rampant. It would be almost a relief to many educators if these families, and their highly motivated students, were typical and overachievement were the greatest threat to high school education today. But the sad truth is quite the opposite.

According to the National Assessment of Educational Progress, a national achievement test, reading and math scores for 17-year-olds have been stagnant the last 30 years. One of the reasons for this, many educators say, is that students, educators and parents have bought into the notion popularized by Robbins and other social critics that American teenagers have too much schoolwork and should be allowed instead to read for pleasure and watch the sunset and think deep thoughts.

Are news editors susceptible to a fallacy of composition? Perhaps so. Students do little homework, Mathews reports, and HERI's 2004 survey shows over forty percent of high school students are bored with their schools. Less than 1 in 5 of women and 1 in 8 of men study ten hours a week in high school. Mathews and Joanne Jacobs are right -- students do too little in high school, not too much, because we do not ask enough of them.

Mitch announces that the MOB party will be September 9th at Keegans. I assume it's a late afternoon event (I hope so, since I don't get off the air until 5.)

Do us a favor - send an RSVP to "northernallianceparty@hotmail.com". If you're a MOB member, you'll be getting a personal email about it (assuming I can find your email address anywhere), but don't wait for me - just send the email so we can get a prelim count of attendees.

And don't forget this Friday, Trivia with Hugh Hewitt. This brain available for rent to a team that asks. You'll never miss another question about gross domestic product.

An article in this morning's Chronicle of Higher Education (temporary link; permalink for subscribers only) tells us about Christopher Cooper, a professor of criminal justice at Saint Xavier University in Chicago, who was injured in Iraq while serving as a reservist there.

Since returning from Iraq in October of 2004, Mr. Cooper, who is 43, says he has had to interrupt his classroom teaching to go to the bathroom and to monitor his blood pressure. He has also had to cancel classes for hospital visits and because "sometimes my glands swell and I get blisters on my tongue and I can't speak."

The professor says he asked the university to help him by hiring an adjunct to fill in occasionally and teach his classes. And he says that the U.S. Department of Veterans Affairs offered to help the university foot the bill.

But instead, says Mr. Cooper, the university placed him on an unrequested medical leave from January through May of 2006. Last December, it also turned down his request for a sabbatical for the 2006-7 academic year.

Subsequent to filing an EEOC complaint against the school, the sabbatical was magically approved -- "sufficient funding ... was not available" before, said the school, but now they have them -- but now Prof. Cooper has not made plans for research travel because of the earlier turn-down; failure to produce such research could lead at least to him having to forfeit his pay during the sabbatical, and potentially an inability to achieve promotion to full professor.

Prof. Cooper is tenured, and so I doubt he can be fired. But the school's reluctance to help his disability, particularly in light of its experiences with another professor with anti-military views, certainly has to strike one as inelegant.

Paul Jacob wonders:

Average compensation for federal civilian workers last year came to $106,579 — which Chris Edwards of the Cato Institute notes is "exactly twice the average compensation paid in the U.S. private sector." Throw out the benefits and the difference is less, but still a whopping 62 percent more for the federal worker.

Of course, past figures used to bolster up the "underpaid civil servant" notion ignore benefits and consider just the nominal wage rate. But today's 62 percent difference is hard to ignore, isn't it?

But face it: nominal wages aren't real wages; for a true comparison we must add on all the benefits, as Edwards does: "Federal workers receive generous health benefits during work and retirement, a pension plan with inflation protection, a retirement savings plan with generous matching contributions, large disability benefits, and union protections."

Here's the Cato study Jacob cites. When I read things like this I usually think they are too pat an answer to be true. I think this one is as well. Gary Becker points out that quit rates for lower-level government jobs are well below quit rates in the private sector.

Federal employees at lower level jobs may not make more than their civilian counterparts, but their economic situation is quite good when all other characteristics are taken into account. Government workers at these levels have great job security since they cannot be fired after a short probationary period, except for the grossest forms of misbehavior, ... In addition, they get many holidays, good vacations, generous pensions and health benefits, and are usually not under much pressure at work. The full set of characteristics offered to these federal employees is very attractive, which is why lower level jobs attract many applicants, and the jobs must be rationed through tests and in other ways.

In general, according to this BLS data, tenure on federal government jobs is almost three times that of private sector jobs. State and local government job tenure are also well above private sector rates. Becker and Richard Posner both point out that this is for the lower level jobs -- higher level federal employment tends to be at salaries well below those attainable in the private sector. Thus for example the high turnover at the Dept. of Homeland Security, where maybe you'd be willing to spend a few more dollars to keep the good upper-echelon people (I assume there are some.)

If there are workers with longer tenure in government, and one is rewarded for years of service with higher pay, it makes perfect sense that government workers would be seen to have higher pay. Jacob and Edwards would bolster their arguments if they could compare worker compensation for employees with the same years of service on a private and federal job.

After lunch with a colleague with a high school senior child who should have his pick of many universities, I came back and finished this essay by Thomas Hibbs on whether universities have any soul. Anyone with a child heading to college in 2007 should read this before they start gobbling up statistics from USNews or some other college guide. In the context of reviewing a number of books about the state of higher education, Hibbs relates the student to an "amateur" (which until now I had not linked to my days of amo amas amat...)

Specialization breeds an inevitable individualism and elevates narrow expertise over breadth of learning. Clearly a university cannot do without rigorous, specialized knowledge in its faculty. The challenge Mr. Lewis and others pose is whether universities can create incentives to balance focus with breadth.

This would entail another sense of liberalism. Such a liberality or generosity of spirit would revive a proper appreciation of amateurism – not in the sense of an absence of serious training but in the etymological meaning of the word "amateur," from the French for "lover."

In an academic context, an amateur would be one who has a passionate enthusiasm for knowledge, an infectious joy at human inquiry itself and a commitment to transforming students from dependent absorbers of information into colleagues in a shared pursuit of knowledge. This spirit of wonder is the most compelling embodiment of Newman's claim that knowledge is an end in itself. Such a spirit knows no bounds – it can be equally present in an English poetry class, a chemistry lab, a music tutorial or a philosophy seminar.

As Jeffrey Hart said, "Life consists of more, thank God, than politics." Or sex, for that matter. Find those schools that agree.

The local paper runs the usual kind of article on textbook costs at local colleges. (Note to news editor: Your budget is getting quite predictable. Who's covering SCSU opening drinking season this year?) The cures offered? Buying online and the selling back of used books. Inside Higher Ed has a story of one school that has required faculty to lock in their textbook choices for three years. Another article there argues that the textbook market restricts choices for students.

Worth reminding people: The value of a textbook will depend in part on what you can resell it for later. When I buy a used car, one of the things I look at is the price of that same model three years older in the current Blue Book -- that tells me how the car holds value. If this story about locking in textbooks for three years should increase the reselling price of books from students to bookstore, that would be fine. But the bookstore may be a monopsonist.

I had a letter published in which I took issue with Senator Tarryl Clark's vote on the Minneapolis stadium issue (by the way, if you live in Hennepin, there are hearings about this fait accompli the next three nights -- and there will at least be a few people venting.) The Times chat included this late entry:

John Ellenbecker from St. Cloud
Posted: Aug 20, 2006 at 12:03 AM

Deminn - hate to break it to you but the letter writer is just another partisan hack who doesn't give a damn about the stadium issue, just about getting his candidate elected. His candidate is also a fellow faculty member at SCSU.

Yup, that John Ellenbecker. Peach of a guy; he's a guy who thinks political ads that mention him by name are reasons to sue.

Others made note of the fact that I'm not a DFL-loving professor -- sorry, I hate typecasting -- and that I am only looking at one issue. Well yes, I am, but it's no different than the Ned Lamont campaign. Taxation without representation, or more specifically taxation without a referendum that the same legislative body had made law, and still maintains as law, choosing only to ignore it in this case, was the fundamental cause of the American Revolution. Was John Hancock a single-issue voter?

And to the questions about who I'll vote for governor: In a contest between TPaw and Hatch, yes I'll vote for Pawlenty in a heartbeat. But that's a choice for me between second-best and worst. My decision, as I mentioned on the radio Saturday, is whether I can afford to express my displeasure with Pawlenty with a protest vote for Sue Jeffers, given my doubts that she could beat Hatch in a general if it came to that. And had she run as a Libertarian, the problem would be the same, so those who still kvetch about her choice to run as Republican are missing the point -- if she loses as expected in September, most of her voters will return to TPaw in November. You should thank her for doing what she's doing: She's getting her protest done and over before it interferes with the general election.

Worth reading: David and Margaret are also having at TPaw; she says "Pawlenty [is] basically a pro-life democrat."

UPDATE: Marty piles on.

Please try to do better than "Pawlenty is bad but Hatch is worse." Such arguments do have some merit. However, I have considered this argument and I'm not convinced by it right now. I would rather regain some of my principles and face a Hatch governorship then lose all I have come to believe as a fiscal conservative.

That's been David's position for awhile. What you would need to do to convince me to sit on my hands is establish that a defeat in November will win back the party to fiscal conservative principles. I'm not at all encouraged by what I see -- who do you think will lead that charge? Do you see the Chris Coleman tax increase in St. Paul leading to more fiscal conservativism or less?

I initially read about this article on the Chronicle of Higher Education blog. It seemed reasonable enough -- a faculty member at the University of Virginia holds the title of 'state climatologist' and gets a grant to do private research; Governor Tim Kaine's office asks the professor not to use that title on his private research. Quite reasonable in my view; the professor is speaking in a private capacity and should represent that fact to readers of his private research. Even given that it's a debate over global warming -- the professor, Patrick J. Michaels, has written a number of articles that are skeptical of global warming claims -- the university correctly says the professor has academic freedom to write those articles, but shouldn't represent that he speaks in any way for the state government.

But the problem is, there is no official state office of climatology, and while he was appointed 25 years ago by a governor, Michaels' office is run by UVa.

U.Va. spokeswoman Carol Wood provided this statement: "We are grateful to the secretary of the commonwealth for her letter about the state's relationship to the Office of the State Climatologist. As it has since 1978, the University will continue to operate the office as an institutional program in accord with the American Association of State Climatologists, the body that oversees state climatology offices nationwide."

The governor's office said Michaels could refer to himself as the "AASC-designated state climatologist."

You have to wonder why Governor Kaine's office is making such a fuss over this. Sure it provides funding to Michaels' office, but that would be true of any faculty member on campus. And any of them are able to speak as experts under their grant of academic freedom, as long as they are clear that they do not speak for the state or the university.

I have to wonder if the reason for Governor Kaine's letter is the content of Professor Michaels' research.

It feels like forever since I've been to the station in Eagan, but tomorrow we kick off NARN 3: The Final Word, with Michael Brodkorb. I am amused with the peals of joy over the new show seen on Michael's blog.

NARN begins at 11am with the Opening Act Fraters sans Rocket, the Headliners Mitch and Ed from 1-3 and, the Final Word 3-5. Replay of the whole thing starts Sunday nights at 7pm. We'll have to get the kinks worked out fast, because the following weekend we are at the State Fair!

Chad waves the white flag on the best weekly news magazine in the world.

Not that there's anything wrong with the weekly magazine. Far from it. It's an excellent source for world news, especially business and economic, and provides a perspective that you will not find in the US media. If I was limited to only being able to take one magazine on a flight (and we may be headed for such Draconian measures), it would be The Economist.

However, with my daily newspaper, bi-weekly magazine, monthly journal, and book (to say nothing of the pearls posted by Saint Paul and Atomizer every six weeks or so) reading, I find myself with no time to keep up with the weekly delivery of The Economist. I'm lucky to skim through the contents and read one or two articles before the next issue lands. Then there are two of them demanding my attention and inspiring bouts of regret and guilt.

I understand. At one time I subscribed to NR, Weekly Standard, The New Republic, Harper's and The Economist. Just before I started this blog in 2002 I finally started dropping them. Only The Economist remains. Its locus is what I politely call "the men's reading room" ("because when a man's gotta, um, read, there'd better be nobody doing their damned makeup in there.") The articles mostly are short enough so that two fit in one reading. This allows for fairly complete coverage; I have it sent to my office so that I can read the one or two long articles before taking it to its final commode.

Earl Weaver would have agreed with me. He had ten Laws, the seventh of which was "It's easier to find four good starters than to find five." Yet most baseball teams insist on five starters, with me usually cringing every time the Red Sox send out their fifth. ("Does this have anything to do with Jason Johnson giving up a leadoff triple to start the game against the Yankees today, Professor?" You know me too well.)

Likewise, proposals to limit school class sizes assumes that the supply of good teachers is practically infinitely elastic. As Frank Stephenson points out, that ain't necessarily so.

Proposals at both the state and federal levels have called for class-size reductions in an effort to boost student performance. Typically, such proposals have implicitly assumed that teacher quality will remain constant when hundreds or thousands of additional teachers are hired to lead the smaller classes. This assumption is mistaken. ...It just might be better to have more kids in a class with a better teacher than to divide the students into smaller classes with inferior teachers.

Of course, the real reason for those proposals isn't to encourage hiring new teachers but to increase the rents received by the current stock of teachers.

UPDATE: I also hate former Royals in my bullpen. 8-3 Yankees, middle 7.

I collect paper money as a hobby. My focus is always for paper money from hyperinflations -- I love buying pieces of paper with lots of zeroes that the govenrment has made worthless. It's a weird hobby, I suppose, except that inflation has always been at the center of my research interests.

Just dropping zeroes shouldn't make a big difference you would think. And if that was all they were doing you'd be right. When I was in Ukraine in September 1996, the new hryvna replaced the karbovanets by lopping off five zeroes (Hr 1 = Krb 100,000).

But the Zimbabwean reforms do more than remove three zeroes from the old currency. (Hat tip: Mises blog.) This one has a little confiscatory twist.

With inflation officially pegged at 1,183 percent, it has been estimated that huge amounts of money in circulation was actually stashed outside the banking system, largely by the informal sector.

[Central bank governor Gideon] Gono ruled that individuals looking to exchange money could only deposit a total of Z$100 million (US$1,000 at the old official rate) a day. Excluding public holidays, that leaves 16 days until the deadline, or a maximum of Z$1.6 billion (US$16,000) that can be exchanged - bad news for parallel market foreign currency traders, or anyone who has not been using the formal banking system.

Students of Soviet history will recall that this was quite similar to what happened with monetary reforms in Germany after World War II or the last Soviet reforms with Gorbachev in 1991 (when 50- and 100-rouble notes above a certain number were placed in frozen accounts at the state banks, which were rendered worthless in the subsequent post-Soviet inflation.) Such confiscations normally cause a short-run deflation in the economy.

Last week Gono reported that less than 1/8th of the currency in the country passed through the banking system. And the Mugabe government is using police and party youth militia to man roadblocks to confiscate cash holdings of more than Z$100 million (about US$1,000.) About one-fourth of the pre-reform money supply seems to have been taken off in this way.

Those people who do business in the parallel (off-book, cash) contain both the middle and lower economic classes of Zimbabwean society. They are losing money to the government as it engages in this reform. This is much more than just lopping off three zeroes.

There are people who I often consider reasonable who keep thinking the government should just do something about gas prices. What that means is more or less fixing them, as is happening now in Ukraine. When you fix price below equilibrium, children, what happens? Lines form because people know quantity demanded will exceed quantity supplied (they won't say it that way because they speak normal languages, not economics.)

People complained about Yulya Tymoshenko being a populist (including me.) It appears new/old prime minister Viktor Yanukovych is drawing on the same well.

If you can read anything into the lates leading indicators report you've earned your money today. I am getting no hints from there whether a recession is coming or not. It's not likely to be this current quarter, based on what we know right now. Indeed, I agree with Brad DeLong and Menzie Chinn -- there's not much of a chance of calling this recession before it happens.

I have a great wife in Mrs. Scholar. When she announced her laptop was simply not good enough -- a hand-me-down from me that is now about seven years old -- I quickly asked if I could buy her a new one. "Oh that's not necessary, because I don't use the newer stuff. You do. Go buy yourself a new one and I can have yours." Other than the drag of clearing off 15 GB of music and Diamond Mind Baseball to a new laptop, that's like the best gift a guy could have.

While in Mongolia I got another case of gadget envy for a tablet PC (Josh's flashing of his at the Westerns one year being the first case). Being able to draw on slides while I present materials in seminars or presentations is my killer app; I don't just circle, I want to draw a graph on the side of my PowerPoint slide, and then I want to save it. (Let's see Landy do that!) But it needs to be a convertible, because most of the time I'm going to do email with something on my lap.

Now my hankering based on the reading of many reviews since I got back from Mongolia has been the Thinkpad X41 from IBM/Lenovo. Looks super, light, and the added feature of having a fingerprint security system just makes my inner geek swoon. But my concern is that it doesn't appear to be able to use all the upcoming bells and whistles in Vista. So my question is: Would you hold out for something that ran everything Vista runs, or would you not worry too much about that (which would mean the Toshiba M400 is a serious option)?

I've seen several pieces about the new job-growth figures for Minnesota, and Governor Pawlenty is quite pleased about them. Deep in an MPR article, however, there are some disquieting concerns:

More than half the jobs added in Minnesota last month were in the government sector. State labor market analyst Oriane Casale says about half the government jobs added were in education, both higher ed and K-12.

Casale says many schools and colleges didn't lay off as many people as they usually do in the summer. That helped boost the latest job numbers.

"And so what we anticipate is that in the fall, we're also not going to see the increase in hiring that we normally see," said Casale. "And so this is impacting the numbers in that it looks like this is a good summer, when what it could actually mean is that the fall will be a less than good fall."

Casale says other areas of strong job growth last month included professional and business services, including IT and temp jobs, and the hospitality industry, particularly restaurants. The state lost jobs in the construction and factory sectors.

Casale says residential construction is slowing, and some factories are doing their annual shutdown to replace or maintain equipment. She also notes that Minnesota's job growth lagged behind the national average until recently.

"The national job growth started picking up a lot sooner than the state job growth. Now we're picking up, and the nation is slowing down," said Casale. "So what you're seeing is we're beginning to surpass the nation in terms of job growth where, just six months ago, we were quite a bit below them."

I don't know Ms. Casale, but I am a heavy user of data from her office. And if she says that maybe things aren't as rosy as these numbers appear, I am going to take notice. So I have plotted the US versus Minnesota 12-month growth rates since January 2002.
Actually, the Pawlenty version of the story that "we're on fire" is supported by the data, but Casale's version has some truth too. Since Casale has focused us on the private/public employment distinction, I have plotted job growth for private sector jobs only. If one beleives that government activity crowds out private activity, government jobs would crowd out private sector jobs. And as you can see, the private sector in Minnesota, after having a sub-par 2005, has done quite a bit better than the national average for the last three quarters. I suppose I could throw a little cold water on Pawlenty and suggest that the private-sector slowdown in 2005 was due to his battle with the Legislature and uncertainty over tax policy. I don't know that's true -- it's merely conjecture -- but it would seem plausible. How does one add workers when one doesn't know the tax rate one will face going forward?

But despite a weak residential and commercial real estate market -- you will hear more from me on this going forward, it's a big topic for the fall -- there is little doubt that the Minnesota economy has done quite well even in the private sector in 2006. Casale's not wrong in her analysis, but she is focused on one-month changes; the previous three months were very strong for private employment here. I say this on this blog at least once a month -- don't focus on the one month changes!!!

She's right certainly about one thing. There has been a sharp increase in the number of state workers, both in the education portion and elsewhere. If Governor Pawlenty wants to run as a fiscal conservative, he should have some explanation for the expansion of state government payrolls.

The Angry Professor wonders whether having academic departments compete for the university budget leads to a "race to the bottom":

Several years ago LSU moved to a business model budget. Under this model, each department has control over its own funds. We might choose, for example, to give everyone a big raise. Or, we might choose to hire new faculty. We might purc