Sunday, December 31, 2006

Happy New Year 

To all our readers,

As 2006 comes to a close, I hope you will find many high points that you will recall with joy and happiness. May 2007 bring you the best of everything and may your bumps in the road be only bumps over which you can pass and move forward.

Happy New Year.

PS - for those non-Minnesotans, we finally got our snow!!!!

Friday, December 29, 2006


NARN ends at 5pm, not 3.

And we're live tomorrow. Tune in.

How bad was Burns? 

James Hamilton takes up the debate on WIN buttons and Ford's economic policy, arguing that David Altig (and I suppose me too) are wrong to say Ford didn't do badly with the hand he was dealt. Mostly, Hamilton skewers Arthur Burns for being a proponent of creating political business cycles. The quote he had of Burns from the 1960 election is familiar to me, as I am pretty sure I used it in my dissertation ... on political business cycles.

But my question back to Hamilton is which Arthur Burns was he discussing? Christina and David Romer have a nice table in a Journal of Economic Perspectives article on policy views of Fed chairs in which Burns holds seemingly three different views during his eight years in office. First he's a Phillips curve believer but with a very low natural rate. So he believes monetary policy can be tightened in to rein in inflation, but he doesn't feel it necessary since unemployment is often above the natural rate and therefore inflation expectations are dropping. He then seemingly gives up on that view because, he says, inflation isn't obeying the relationship at all. The Romers cite Burn's Congressional testimony in July 1971 (just before the wage-price controls are put in place and the gold window shut):
A year or two ago it was generally expected that extensive slack in resource use, such as we have been experiencing, would lead to significant moderation in the inflationary spiral. This has not happened, either here or abroad. The rules of economics are not working in quite the way they used to. Despite extensive unemployment in our country, wage rate increases have not moderated. Despite much idle industrial capacity, commodity prices continue to rise rapidly. And the experience of other industrial countries . . . shouts warnings that even a long stretch of high and rising unemployment may not suffice to check the inflationary process.
A guy that believes that -- and it appears he wasn't alone in this view at that time -- is likely to decide monetary policy will not use a measure of general prices or inflation as its ultimate goal. But he then reverts back to the Phillips curve explanations by early 1974, along with upward revisions to the natural rate estimates. By October of that year Burns says:
For many years, our economy and that of most other nations has been subject to an underlying inflationary bias that has merely been magnified by special influences. . . . governments have often lost control of their budgets, and deficit spending has become a habitual practice. In many countries, monetary policy has supplied an inflationary element on its own, besides accommodating fiscal excesses.
Now I would agree with Hamilton that it appears the abandonment of the Phillips curve framework -- flawed as it was -- provided a convenient reason to juice the economy before the 1972 elections. That doesn't necessarily mean, though, that the abandonment of the framework was done because of that. It's hard to ascribe motives to behavior.

Taking control of your education, Hispanic edition 

A new book by Herman Badillo is discussed on the Taste page of the WSJ today.
Although his book covers many topics--including immigration--its most important audience is the parents of Hispanic kids, 50% of whom don't graduate from high school. His advice: Don't leave education up to the schools, which pursue such failed policies as 'social promotion' (said to create self-esteem despite failing grades) or 'tracking' with other minority children into deceptively named 'academic courses,' while kids marked for success study a more rigorous curriculum. Get involved and demand that your children be prepared to participate fully in the American dream, through college and beyond.
Imagine that. Hard work, education and achievement, the book's promotional page says, are the traditional values that solve the problems of poor Hispanics, just as they have every other immigrant group that has risen to success. Do you call it the acquisition of "cultural capital" or do you call it selling out?

Creche police 

Since it's the holiday season and I have some time off, I looked through a very long set of comments on the SCTimes chat board on the usual nonsense of the season, the public display of nativity scenes. In times when people have real civil liberty concerns like the Patriot Act, or violation of private property rights like smoking bans, it's somewhat hard for me to get worked up about someone displaying a stable with figurines on a public square. But when I read this from the ex-Mayor, John Ellenbecker, I had to laugh. He first states (it's a long comment thread, so go to comment #77):
I had court in Long Prairie on Tuesday. I drove back through Holdingford (as I always do - it is not out of the way) and found that the nativity scene is again in front of City Hall - in violation of the Minnesota Constitution and the Constitution of the United States.
That's a nice drive, I guess, if you assume the ex-mayor likes the back roads of Todd and Stearns counties. (Here's a map.) The way most of us go is up I-94 to US 71. A later poster (at comment #123) points out you have to detour offI-94 to drive by the Holdingford city hall. Now, he could have said something like "I took the scenic route on CR-17" or something like that. But no. At comment #130:
When I drive through cities I often drive through their downtowns to see what is new - and I am usually looking for what is new in places to eat and drink. That is why I "detoured" through downtown Holdingford - not that I ever have to justify any of my actions for a twit like you. Tuesday I did drive by their City Hall just to see if the nativity scene was there again.
So let me understand this: On the day after Christmas, driving back from doing his work as a lawyer in a Todd County courtroom, the ex-mayor of St. Cloud decides to detour off I-94 for the expressed purpose to see if some small town has put a creche on public property. As the fellow discussing this with the ex-mayor said later,
[This] reminds me of the old maid that called the cops because she was upset that her male neighbor would walk nude in his apartment without pulling the shades.

The cops came and stated they can't see his window. "Oh you can," she said as she pulled a chair tight in the corner. "Stand on this and look sharply to your left"

There has been a sharp discussion around St. Cloud about neighboring Waite Park having a nativity scene in a city park -- paid for by private money, but erected and taken down by city employees with the other holiday decorations -- but until now nobody has caused the city of Waite Park to stop putting the display out. I'm certain the park will be on the next ACLU Solstice tour, with the ex-mayor taking tickets. "Be vewy kwiet. Cweche twacks..."

Thursday, December 28, 2006

Pomo education 

The editorial in the Washington Times has fun with the Young America's Foundation list of the twelve most bizarre college classes.
There seems to be dissension in the ranks of the leftist faculties at Occidental College -- we told you to keep your children away from this one -- and Mount Holyoke College in Massachusetts. No. 5 on YAF's list is Occidental's "Blackness," which dissects the intellectual nuances of "new blackness" and "post-blackness." At No. 7, however, is Mount Holyoke's "Whiteness: The Other Side of Racism." Maybe the Occidental and Mount Holyoke departments should forge an intercollegiate course titled "Whiteness: It's the New Blackness."
Unlike the editorialist, I'm not at all bothered by a course on "taking Marx seriously." It was taken seriously for a long time, and any discussion that could shed light on the millions killed by communism is well worth a student's time. Besides, campuses have many people who do still take it seriously, and it's worth keeping those people preserved like fossils in a museum of natural history.

A course titled "Sex, Rugs, Salt and Coal" at Cornell didn't make the list except as a "dishonorable mention." It would have made mine.
Description: Everything is for sale today- but has it always been? We'll look at the history of various commodities to explore the changing cultural and environmental impacts of market forces. Why are "oriental" rugs collector's items? How did we come to keep salt shakers on our dinner tables? When did coal start replacing wood as a fuel source? This course will cross multiple boundaries of time and space as it examines both case studies and broader theoretical perspectives, allowing us to draw connections between our culture of consumption and the social forces wrapped up in production. How was the taste of sugar linked to the slave trade? Is prostitution really "the oldest profession?" What goes into your daily cup of coffee besides half and half? And what was western society like before everything had a price?
Um, poor. Again, a course taught in an X-studies program. If you're making one of these lists, that's the vein you mine.

Let a million cores bloom 

When I was an entering freshman at St. Anselm in 1975, the school had orientation weekend. We all got to stay in the dorms overnight -- even those of us, like me, who were "mill rats" commuting from home in Manchester -- and we went to some information sessions. Registration consisted of asking two questions: which science, chemistry or biology? and which language, French, Spanish, or Latin? (Chem and Latin, if you must know.) We all got English I, we all got intro to philosophy, and math. The process took less than ten minutes, leaving plenty of time to check out all the new females who didn't know me from high school. (Don't ask.)

I imagine it's a little different now, though looking at their core curriculum makes me think not too much different. (I see math is gone from the BA core -- that's a shame IMO.)

Universities today are of course much different, and after discussing Diogenes' search for a good university a few weeks ago I got into discussions with my two siblings, one of whom has a daughter going to college next year and the other in Fall 2008. The latter one is an athlete who likely gets a scholarship somewhere. That and an email this morning about our new First Year Experience program at SCSU got me to thinking what we're doing to get students a better education. FYE is an attempt to use peer pressure to keep kids in school, creating friendships and programs. But at a school our size -- with about 2000 entering first-year students -- creating 70-100 cohorts of 20-30 students each means you're going to get a list of different themes that are not all created equal. Some of them are program-based, with offerings in business and engineering for example that make sense. You get introduced to your fellow majors (or those likely to do so) earlier. This doesn't work so well in economics because, as I'm sure I've said before, few students know they want to be economists upon leaving high school, particularly among the population of students that go to large state universities.

But others are theme-based, and get a load of some of these themes:
  • From Surviving to Thriving: Connecting Lives to Social Change. This learning community takes an interdisciplinary approach to the exploration of race, class, gender, and sexuality with a thematic focus on social inequalities, self-transformation, and purposive action to bring about positive change so that students can begin claiming their education.
  • Musical Roots of America. This community provides an exploration of race in America through the musical genres of rhythm and blues, rock and roll, country, folk and rock.
  • Journey to Planet Earth. Students will study the relationship between people (communities, societies, countries) and the physical environment in which they live, the impacts they have on their environment and how their environment also impacts their lives.
Note as well that this was the best we could come up with for the 2nd year pilot program for FYE when we had 400 students in the program. Some people are coming up with ideas in science and engineering, but those would cover no more than 120 students.

What is an 18-year-old and her parents to make of these kinds of choices? You will notice the common multi-culti theme in these. Compare it to the core at St. A's I linked above. One of these schools offers a discounted price subsidized by tax dollars. The other has to attract people who pay their own money. Which one do you think provides greater value?

Wouldn't it make more sense to send your child to a place where the university had an idea of what the student would become, rather than helping the student become whomever he or she wants at that time?

At 18, I wanted to be a doctor. And a rock star.

S novim godom from Gazprom 

It's an annual event. As temperatures dip in Eurasia, Gazprom gets the itch to increase its revenue stream in Russia. It has had Russian foreign policy as its biggest ally in the past -- witness the last two years' fights with Ukraine or the row with Georgia -- but now has decided to apply thumbscrews to its friends. And not just its nominal friends nearby like Azerbaijan, but now they are trying to stick it to Belarus, the most Russophilic of its neighbors. Captain Ed thinks Gazprom's heavyhandedness will lead to Belarus playing footsie with Europe, but Gazprom is arguing that it has enough already stockpiled in Europe to meet the EU's needs, and the EU isn't making any noise over the Russia-Belarus dust-up just yet. In short, the EU isn't too happy still with Lukashenka after the disastrous elections last March. Sorry Ed, but you seldom play footsie with someone who calls you a "scar on the face of Europe."

Gazprom may recognize that Belarus has less leverage here than Ukraine or Georgia, and has decided as a business matter to use its power for short-run gain. For what reason does Belarus get the same subsidized rate (about a fifth of the European rate) as do Russians themselves? It has always been about politics. If Belarus has no leverage with the West
-- and I hardly expect they will until Lukashenka has a warmer home address than Minsk -- it emboldens Gazprom to seek further concessions. Indeed, the Europeans disinclination to engage in any real policy towards developing democracy and civil society in Russia's near abroad strengthens Gazprom's hand. US weakness after the midterm elections cannot help either.

No free lunch 

Arthur Brooks (subscribers' link) discusses the negative elasticity of private charity with respect to government largesse:

One large nonprofit organization that helps the poor in New York state illustrates this point. The agency was relatively small a few years ago, but provided a critical service in several cities. The state, taking notice of the organization's good work, began pouring money into operations, doubling and tripling its budget. The staff was focused on managing and spending the public dollars, and allocated less and less of its time to private fundraising -- which, predictably, vanished. When the state, facing budget cutbacks, began to reduce the organization's subsidy, it led to service cuts and layoffs because there were no private funds to fill the gap. Ironically, the organization and its clients were worse off than they would have been had the nonprofit received no government "help" in the first place.

This experience is hardly unique -- indeed, nonprofits and their communities all across America are exposed in the same way when government funding grows as a source of support. According to the National Center for Charitable Statistics, a quarter of human service charities in 2002 received at least 50% of their income from the government. This represents a lot of risk, because public funding is pro-cyclical: It increases or decreases more than changes in the economy, and thus can destabilize nonprofits. In contrast, charitable donations stabilize charities because they fluctuate less than the economy as a whole. For a charitable organization, relying on government funding as the main income source is like investing your 401(k) entirely in biotech stocks: You might do great -- for awhile.

But the problem with government money goes beyond just its volatility: Studies by economists over the past decade have demonstrated that government spending on nonprofit activities actually lowers private charitable giving. In the case of social welfare services, a dollar in government funding to nonprofits generally suppresses private giving by 25 cents or more. Part of this is due to a lower perception of need among charities when they get public money. There is also evidence, however, that charities spend less effort fundraising after governments give them money.

As Brooks and many other researchers in that area (including two of my colleagues, Patricia Hughes and Bill Luksetich), the crowding out of private charity is usually not dollar-for-dollar. (See for example, this short summary by Brooks a couple years ago.) Some areas it is higher, others lower -- and a few papers might even find crowding in for relatively small charities who were constrained from advertising and fundraising by a lack of funds. What Brooks points out here isn't just the volatility and the crowding out, but that government funds cause an increase in administrative expenses that reduce programmatic expenditures. That's a testable hypothesis.

One such paper by my colleagues finds that the impact of government funding on management expenditures is relatively small -- maybe a $.03 increase for each dollar of government funding provided for performing arts organizations. Where the money seems to go is into excess revenues. If the money from government to charities is pro-cyclical, and charities know it, wouldn't they rationally save that money for recession periods to smooth program expenditures? Both authors are away this week, so I'll have to ask them when they get back.

Wednesday, December 27, 2006

Be a Brodkorb baby 

Michael is having fun over another blogger's declaration that he is Minnesota's worst political person.

A commentor at Democratic Underground posted this comment:
"Brodkorb is the reason for birth control!"
You know they're just trying to protect their own, Michael. I say let a thousand Brodkorb Babies bloom.

Volte-face netting 

After posting on Felix Salmon's point yesterday about the benefits of having the poor pay a nominal amount for mosquito netting, I see this morning that he's changed his mind, based on some evidence.

Curious! The point of having the poor pay isn't to say that they only take care of things for which they pay. What you want to find are incentives that line up between the donor and the recipient. We give mosquito netting to stop the spread of malaria; the poor who buy nets might not use them for that purpose. Indeed, given they've paid for them, they may feel no obligation to use it as intended. If I have Littlest buy a golf club from me for $1 she may use it to, say, chase Buttercup around the house. If I spend $200 on a nice driver and tell her to use it to learn golf, the expenditure might put some obligation on her to make the right use of the club.

Salmon argues that the donor and recipient both want the same thing: to prevent mosquito bites. Thus their incentives align. But why would the expenditure of fifty cents, say, change the recipients' preferences for how to use the net? Salmon doesn't say, and I can't see that either. But neither can I explain the paper's finding of greater use of free nets.

Ford couldn't WIN 

(Substantial update below.)

So how does academia remember President Ford? The Chronicle of Higher Ed leads off its coverage with this paragraph:
Liberal academics may best remember Gerald R. Ford, the 38th president of the United States, unfondly because of the pardon he granted to his former boss, Richard M. Nixon, over Mr. Nixon's role in the Watergate scandal.
So much for conventional wisdom. Wait until they remember that Ford's chief of staff was Don Rumsfeld first, and then Dick Cheney!

Not that I am a big fan of Ford -- I often use an old WIN button for a prop in discussing stagflation -- Alan Greenspan ended up being a fan of his. Greenspan, it should be remembered, headed Ford's Council of Economic Advisors. From a recent article on Ford's economic policies:
While I felt fairly close to his general point of view on economic policy problems, my initial impression was that he was not really capable of abstractly articulating a philosophy. Because of that, I sensed that he wasn't fully in control of the general framework of the policy decisions he was making on a day-by-day basis. But if you began to look at the concrete decision making process, what came through was a very sophisticated and consistent framework. Within perhaps a year, maybe even less, I was able to forecast how he would come out on individual issues with virtually zero error. I then began to conclude that this was not an accident. So, while he was not consciously or verbally in control of a general philosophy toward economic policy, he nonetheless had a fairly sophisticated view.
(Worth noting -- at the time Bob Woodward's bio of Greenspan, Maestro, came out, there was a second book by Justin Martin that covers the Greenspan-Ford relationship.) It's hard to go back and find the policies that would have whipped inflation in 1975-76 given how buggered the economy was under Nixon's wage and price control policies and the ending of Bretton Woods. There's little question that Jimmy Carter's misery index lines in his stump speech helped push Ford out of the White House (I have never thought it was just the pardon.) But the misery index rose under Carter, a point Ronald Reagan used to devastating effect in 1980.

UPDATE: I think Doc is right. The guy who did the least as president might be the best. At least pre-9/11.

UPDATE 2: Bill Polley's appreciation and later agreement. I am rather amazed and not very amused with the less-than-gentle treatment he takes from some. PGL's post discussed in the first comment is here. It's worth remembering that at that time the targeting strategy of the Federal Reserve was different than it is now. That is, the whole concept of reputation and credibility was absent in the discussion of monetary policy. In this recent summary of a St. Louis Fed volume, a clipping from the Wall Street Journal came out six days after Paul Volcker changed that strategy to one closer to what we now know:
Among those who are skeptical that the Fed will really stick to an aggregate target is Alan Greenspan, president of Townsend-Greenspan & Co., a New York economics consultant. Mr. Greenspan, who served as chief economic adviser to Presidents Nixon and Ford, questions whether, if unemployment begins to climb significantly, monetary authorities will have the fortitude to �stick to the new policy.�
I think what Ford was asserting in the point PGL pulls from the Ford inflation plan was the existing consensus in monetary policymaking: it had both real and nominal targets. Thus Ford was not asserting anything new in monetary policy in saying unemployment wouldn't get out of hand, or that interest rates would be managed. He was expressing the status quo. Allan Meltzer makes the point in that St. Louis volume:
[Fed chair Arthur] Burns resented White House interference and pressure, but he did not often resist it. He took over a Board most of whose members had been appointed by Presidents Kennedy and Johnson. To varying degrees, a majority preferred to continue inflation rather than increase unemployment. If inflation could be reduced at an unemployment rate of 4.25 or 4.50 percent, they would accept it. But they did not want any higher unemployment rate. There was a minority that wanted more restrictive policy and more action against inflation. The few consistent anti-inflationists, such as Hayes, Brimmer, and Francis, were exceptions. They gained support when inflation rose, but only until unemployment rose above the level the majority would accept. [Andrew] Brimmer explained at the time that if fiscal policy was the way it was, you would have to tighten monetary policy to the point of inducing a recession. He added that the Federal Reserve �didn�t promise a tradeoff [of easier monetary policy]�if you get a tax bill but we came pretty close to it.�
Given that constraint from an independent Federal Reserve, what were Ford's choices?

Tuesday, December 26, 2006

More bang for your aid buck 

Felix Salmon hits this beautifully and succinctly:
Is there any empirical evidence that giving bed nets away is more effective than selling them? Sachs knows full well that the reason for selling bed nets is not "a short-sighted ambition to promote markets" � there's no market in bed nets. Rather, there is quite a lot of evidence that Africa's poor value things they pay for, and don't value things they get for free. As a result, bed nets which have been paid for get used more, and more effectively, than bed nets which have been given away.

Similarly, there's little evidence that Africa's governments have the infrastructure and institutions in place to effectively and equitably distribute malaria medicines which have been given to them for nothing. I worry that if the world signed on to Sachs's plan tomorrow, the net result would be $2.5 billion per year being spent on bed nets and medicines which would end up stockpiled somewhere near an international airport. A system of payments for these things creates an incentive to get them to where they are needed. Neither USAID nor anybody else wants to make money from these programmes. But before we give up on the small payments which do exist, I'd want to see some concrete evidence that doing so results in positive outcomes in practice.

Cf., bang for your aid buck.


St. Cloud has always been indifferent to its waterfront. My office looks out on the Mississippi, sitting on a very nice piece of land on a bluff over the river across from Munsinger Gardens. The gardens are one of four city parks that abut the river. There are no shops along it, though, and the only other place than SCSU which uses the river to enhance its business is the Kelly Inn next to the civic center. Even there, you do not look at the river from the restaurant. Having grown up near boardwalks on the coasts of Maine and New Hampshire, I have found the indifference of St. Cloud to the river bewildering.

I'm not so bewildered by the complaints of those just to the south of us in Haven Township, who are worried about development on their lands. What they want is to prevent other people from using their property as they see fit. This is a very basic leftist tradition -- I get to tell you what to do with your land -- and they use government power to keep it so.

"We do feel that it's not really a valid reason for changing the rules, just because of expansion and developmental growth," resident and river advocate Jane Korte said. "We feel that the river continues to need protection."

The township board of supervisors passed a resolution last week calling for the DNR to keep the existing rules.

However, the DNR has been working to update the river's management plan since the late 1990s.

The plan in place hasn't been changed since it was adopted three decades ago, and officials say it no longer accurately reflects the St. Cloud area's rapid growth.

The problem with government rules on land use is that when relative values change the rules are difficult to adjust. Without the Dept. of Natural Resources' rules, developers and landowners could reflect changing use values through the property market. Now they have to plead before county commissioners and state bureaucracy, where property owner A can use force to prevent a transaction between owner B and developer C.

You have to wonder, how many other projects that might have happened along the riverbank in St. Cloud are held up by such arrangements?

Measuring prosperity 

Victor Davis Hanson:

I live in one of the poorest sections of one of the poorer counties in California, but consider: there were near riots to get the latest PlayStation 3 video games nearby. I was looking at a 4-wheel drive truck recently, and passed up all the �extras� offered by the salesman�leather seats, GPS, DVD player, extra chrome, multiplayer CD�but that extravagant Toyota Tundra was snapped up by a family on welfare in the booth next to me. With a zero-interest loan package, and no money down, apparently almost anyone can walk into a showroom and drive out with a $40,000 monster-sized truck.

Then I drove into the local shopping center and walked through Office Max, Wal-Mart, and Food4Less where there were more signs of America's new encompassing wealth. There were new Camrys and Accords all over the parking lot, nearly everyone was on a cell phone. Nearly everyone was also speaking Spanish and no doubt a first generation immigrant (legal or not from Mexico). But in terms of traditional notions of poverty and the ability to acquire material goods, food, communications gear, transportation, etc. they were hardly poor.

Perhaps this new prosperity that encompasses almost all social classes in America is due to the miracle of science that now gives us such cheap appurtenances, or the addition of 1 billion Indian and Chinese fabricators to the world�s work force that results in endless consumer goods; or the ability of low interest and almost universal instant credit.

...This summer I bought on sale an old-style color television, 32-inch screen (the kind with the big tube in the back and curved front) for about $130. A decade ago it would have cost $500. The surprise was that the clerk laughed about what he thought was the idiocy of wanting one of these now obsolete, but perfectly fine, televisions. He probably made about $10 an hour, but would never have apparently stooped to such sacrifice. Again, any discussion about this surreal world is entirely lacking in the current political debate.
Menzie Chinn looks at a recent speech by San Francisco Federal Reserve president Janet Yellen discussing inequality and argues at the end that building a consensus for free trade might require "laissez-faire adherents to jettison objections to measures that minimize economic uncertainty." But the data Chinn and Yellen use do not reflect the reality of what Hanson sees in his neighborhood shops and parking lots.

Additional thought: While wages may not grow as much as we'd like, perhaps this spending is fueled by expectation of returns from skill investment. We too often treat labor in macro studies like an already-formed piece of equipment.

Experiencing disciplines 

A note on Phi Beta Cons tells of Cal State-Northridge creating a new major in Central American Studies. This is nothing new. When I visited at Pitzer College in the early 1990s, there was a mild dust-up over the creation of an Asian-American studies program at a relatively small college that had an Asian Studies program already. Like CSUN's, the rationale for this program was that the "experience" of the Asian-American was not reflected in the Asian Studies curriculum.

George Leef thinks "that a college education should focus on mastering bodies of knowledge rather than studying 'experiences,'" and he's right but for more reasons than just giving a student a better education. Focusing on the experience allows the faculty member to ignore any disciplinary or professional standards. Economics as a field is more than just "studying the economic experience". It has a scientific standard; it works from some very basic assumptions about how people decide, and the natural social condition of transacting. Those who find the logic that follows those assumptions leading to conclusions that don't feel good -- that give them a bad experience -- reject the whole idea that there is a discipline. (I feel an A is A moment coming on, hang on a second while I get coffee.) It grants charlatans the cover of grayness by blurring any distinctions. I'm aware that this happens in other disciplines as well, and those that have not held fast to scientific standards have been more susceptible to the blurring.

Thomas Sowell has long argued that reforming the university could be greatly helped by striking down all departments with the word "studies" in their name. A few good ones might be tossed out with the bathwater, but most of those could be absorbed back into the disciplines that their faculty properly belong.

Sunday, December 24, 2006

A Great New Christmas Story 

Anyone with sons or daughters in the military understands the desire to be home for the Christmas holidays. Sometimes Mother Nature and humans cooperate, sometimes they don't. As many of us have seen, the recent snowstorms in Denver put a real crimp in people's ability to get home, including some Marines.

A heartwarming story of four marines shows Americans at our best - this time, taking care of our soldiers. The four were hoping to get to Denver, then suburbs to celebrate Christmas with their families. The blizzard grounded all planes, incoming and outgoing. They were comiserating on their bad luck when a stranger approached them. Turned out, Paul, the stranger, said he could rent a car (the Marines were too young to rent one), obtained a Windstar Van and they were on their way. The 23 hour drive encountered some rough storms but the Windstar, Paul, and the Marines all made it to Denver with a couple of days to spare.

In most settings, one would think twice (or even more!) about taking into one's car four unknown young male stangers. But the risk assessment becomes much different when it is young men in American military uniforms. Let's remember this during this season. 'Tis not the case in many parts of the world.

To those who just celebrated Hanukah, I hope it was meaningful. To others, Merry Christmas or Happy Holidays - whichever applies.

From Mrs and I to you, a Merry Christmas! 

Here's hoping that your Christmas makes you laugh, fills you with joy, and keeps you by the ones you love. The best way I can show you that is a picture of me with the one who makes every day a blessing.

Off to church. Merry Christmas!

Friday, December 22, 2006

Dogblog of the week #4 

This dog has been partying so hard she forgets where she is. But she's an honest dog. Unlikes some football players, she'll tell you if she has had an unfortunate discharge.

A slow morning today, but you'll find more stories for today below after lunchtime. Buttercup and her accident stay here for the rest of the day.

That looks ominous 

Powerline has reprinted a letter sent to the Columbia University community by its president, Lee Bollinger. Scott Johnson calls the message "incredibly pompous and verbose," which when said by a lawyer is pretty harsh, but when said to a university president is unsurprising. It is a long letter, but the part that should draw focus is this:

Second, we all understand that student groups should have the widest possible latitude in conducting activities and inviting speakers consistent with their own personal interests and beliefs. But along with the right to have controversial speakers on campus come several responsibilities to the overall University community. In order to better facilitate these rights and responsibilities, we have now reorganized University governance of student organizations. This change should enhance the coordination of student activities and improve the functioning of future student-sponsored events.

Additionally, we are implementing event planning and staging procedures to better accommodate events, no matter how controversial they may be. We are, for example, instituting uniform procedures for engaging speakers or groups from outside the University community. This will include an express agreement in advance of any event--between the University, the sponsoring student group, and the speakers or groups--about how the events will be staged and who from outside the University will attend.

That should be viewed as censorship. It says that the university is not an open forum for outside speakers. It also says that there will be additional controls placed on student organizations. It of course does not say what the controls will be. It of course is released on the Friday before a three-day holiday weekend when the campus is practically deserted. As FIRE points out, this is likely an attempt to fly under the radar. Which for university presidents is quite, quite usual.

Good riddance 

I cannot comment in any great detail on the internal politics of Turkmenistan following the death of Saparmurat Niyazov, or Turkmenbashi, as he preferred to call himself. Captain Ed and the guys at Registan have done a fine job covering much of that. See also TOL: Turkmenistan's speculation of the succession.

Let me make two points, however, that others might be missing. First for the mundane: The reverberations of this in the energy world cannot be overstated. The Russians have done a fairly good job in making any discussions in Europe over energy supplies go through Gazprom, and Gazprom and Russia have placated Kazakstan and Niyazov enough to keep Gazprom's position as market maker secure. Having Turkmenistan now in play will make for a source of intrigue. And it won't be only Russia, as pointed out in this interview with an energy expert: China and Iran will have reasons to make overtures to the new political class that is in Turkmenistan and its leaders-in-exile.

Such discussions are strengthening, in my view, Russia's hands in dealing with its near neighbors as well. Contained in an article discussing a meeting between Vladimir Putin and Ukrainian president Viktor Yushchenko in Kyiv,
The dictator's death may affect energy supplies to Ukraine, which is currently importing a mixture of Russian and cheaper Turkmen natural gas for a price of $95 per 1,000 cubic meters. Russia and Ukraine still have to decide on the gas price for next year, and Turkmenistan said before Niyazov's death it would charge Ukraine $130 in 2007.
There's reason to believe the price might be driven higher with Niyazov's death, a fear felt in Ukraine. Such discussions would also happen in the other countries of the Caucasus and in Moldova, all of whom use Turkmen gas to get cheaper prices than they might pay on the open market. I think this is going to be a bigger deal than most other people are saying so far, and it bears watching in 2007.

Second, a friend who has spent time in Turkmenistan made the comparison between Niyazov and Romania's Nicolae Ceausescu, and he regretted that Turkmenbashi had not met with Ceausescu's fate. He was a pretty brutal guy by all accounts, and the comparisons of a strongman who uses Islam as a tool for personal political gain will look very familiar. Its economic freedom is very poor as well. But for the most part this guy was a two-bit self-aggrandizing dictator (take a look at the photos someone took there and imagine the costs of these monuments to his ego!) We'll have to leave his final judgment for someone else, but we won't miss Niyazov even if it does cause greater instability. That was bound to happen whenever he died.

UPDATE: As if to prove the point, Russia is already angling at nemesis Georgia's gas supplies:

Gazprom, the Russian natural gas monopoly, agreed Friday to continue supplying natural gas to Georgia, but at double the price, the latest increase for a pro-Western nation on Russia's border.

Aleksandr Medvedev, Gazprom's deputy chief executive, said three Georgian importers had agreed to buy gas at the company's asking price of $235 for 1,000 cubic meters, or 35,000 cubic feet, close to the prices paid by industrialized nations in Europe. Gazprom is insisting it will raise prices to European levels throughout the former Soviet Union.

The latest contract is considered short-term on both sides. Gazprom notes that the contract does not cover all of the country's needs and that it could still cut off supplies. And Georgia said that it was close to obtaining an alternative supply from a BP-run natural gas platform off the Caspian Sea coast of Azerbaijan, Georgia's eastern neighbor.

If the Azeri deal comes off, and that's a big if.

UPDATE 2: Poisoned?

Leveraging Turkey 

Armenians and Armenian diaspora got an interesting surprise today when Armenian defense minister Serge Sarkisian wrote in the Wall Street Journal (subscriber link) that the Armenian government is willing to speak to Turkey about normalizing relations without any preconditions.
Over the past few months, attention in Europe has focused once again on the genocide of the Armenian people. The debate in the European Parliament over whether Turkey's recognition of the genocide should be a precondition for membership in the European Union, and the French National Assembly's bill criminalizing genocide denial, have put the spotlight on this tragic period of Armenia's history.

...Turkish-Armenian relations and the genocide are, of course, important factors that need to be considered during Turkey's negotiations for EU membership. It is important to remember the past to ensure that such crimes against humanity are not repeated. Nevertheless, Armenia has a very straightforward and practical position in terms of future relations with Turkey. We would welcome starting normal diplomatic and other relations -- without preconditions. That includes not tying the establishment of diplomatic relations to recognition of the genocide. More importantly, we want to profit from such diplomatic relations as a means to overcome the issues that burden our relations. We cannot expect solutions to come before we start talking to each other. Solutions will only arise when we work hard for them, starting by establishing an open dialogue.

Emil Danielyan summarizes the article, pointing out that
The comments highlighted the differing positions on the issue of official Yerevan and the Armenian Diaspora. The influential Armenian community in France is particularly vocal in opposing Turkish entry to the EU, saying that the bloc should not even consider Ankara�s membership bid as long as the latter refuses to acknowledge the 1915 Armenian genocide.

President Robert Kocharian argued in October that the accession talks will put Turkey under growing Western pressure to normalize relations with Armenia and reconsider its long-running policy of genocide denial. �In that sense, we don�t see any dangers in that process. Perhaps quite the opposite,� he said.
When I sent this to some family and friends, my father wrote back that he thought Sarkisian was "soft" but that maybe it is needed. I am scheduled to speak at a conference on the economic benefits of opening the border. We're still putting final touches on the paper, but suffice for the moment to say the costs of blockade are substantial in our view. Thus it comes as little surprise that the Armenians in Armenia itself would be more favorable to some normalization with Turkey than would the diasporan Armenians who bear none of the cost of continued estrangement and conflict for making genocide recognition a precondition.

Thursday, December 21, 2006

And now repose 

Finals have been graded. They no longer even send you a form to sign -- you just log into the university computer, enter your grades and a password and off they go. More students needed my long final than ever, and took it. (A few who should have didn't.) So grading was longer than usual, and I'm more tired.

Before heading off for the night, a few words about another sports team and the end of a quietly very good career. Buster Olney blogged (ESPN insider only link) about Brad Radke's retirement from the club. What caught his eye was not Radke's matter-of-fact goodbye, but the way the club handled it.

But if you want to understand some of the reasons why the Twins have been successful over the last decade, in spite of their modest payroll, in spite of once being a theoretical target for contraction, take some time to watch a videotape of Radke's press conference. Listen to how the organization shares, particularly when general manager Terry Ryan takes the microphone (about six minutes into the event).

Using notes that he apparently jotted down, Ryan tells the story of Radke's career. He mentions the draft, and all the players taken ahead of the pitcher. He mentions the area scout who followed Radke. He mentions the team's minor-league director, Jim Rantz. He mentions Radke's managers, his pitching coaches, his catchers. He talks about Radke's wife, Heather, and his children.

If you didn't know better, if you didn't know that Radke was an All-Star who won 148 games and averaged more than 200 innings a year and made more than $60 million in salary during his career, you'd think you were watching a company picnic. The press conference for a Major League Baseball team somehow had all the intimacy of a farewell picnic for a 40-year employee at the local hardware store.

This kind of culture means something. You can't put a number on it, you can't quantify it, you can't always recreate it. But it means something.

A guy that went 20-10 on a team that was 68-94 (1997 -- Buster was generous with that decade of goodness) deserves more than just being sent off to the Hall of Very Good. I compare it to how the Red Sox let Dwight Evans go spend one last, wretched season in Baltimore rather than have him retire in Boston -- the only other guy with 2500 games as a Red Sox was Yaz -- and I agree with Buster that the Twins do many things right.

On a week when teams trade their superstars for pennies on the dollar and others allow their players to spit on opponents, it means something.

Strategic signalling 

This year the American Economics Association has instituted a means by which job seekers can signal two employers of their preference to work for them. The cost of applying for jobs has gotten so low that we routinely receive 125-150 applications for a position -- more if the position is rather broadly defined -- but some of them are from applicants who likely will have better offers. Some schools will decline to use scarce interview slots at the AEA meetings, which is the usual first round interview spot for all jobs in our field in academia (and many in government), on candidates that are unlikely to accept later on-campus interviews because they got better offers. So some applicants might use the signal to tell someone like me, a chair at a mid-level masters-granting institution, that they are keenly interested in the program. The catch is, each job applicant can send no more than two signals.

A new blog devoted to rumors about the economics job market has a post on such signalling. Of the comments on that post, many reported not receiving interview invitations as a result of the signal. (We got one such signal, and I will interview that person ... but it's not clear to me the signal was important in our decision.)

So I'm trying to think about how one would use such signals strategically. One commenter said he or she signaled to a school because of co-location issues. Another indicated he was signalling to schools he thought were good candidates, where he might be on the margin. How one knows that is beyond me, actually. My thought was that if I thought a school might think I was just fishing and not serious about a school -- because they may perceive themselves as below the level I could find a job at -- I would use the signal to tell them I was serious. So nobody would signal a top-50 program, but lots of Directional State Universities would get signals. Your alternative hypotheses invited...

Anyway, some second-year grad student in econ has a fun dissertation topic here, if they can get the data on what types of candidates signaled which schools.

Why we stick to radio 

Two rather esteemed economics professors made a video for the departmental website to welcome new PhD students to the program. The video is, well, God-awful. Inside Higher Ed reports that two spoofs of the video were shown at a "department holiday skit party" have fared much better. Anything linking Marvin Gaye to economics will be funny to most, but I laughed harder at the second one when a very large mathematical expression is read off in perfect deadpan and declared to be "clearly positive." It would be a personal thing for us who took micro theory at Claremont in the 70s.

Wednesday, December 20, 2006

Like you didn't see this one coming 

Guy writes an article dissing blogs as all latching onto the same story; article goes to top of Memeorandum.

Somewhere Charles Mackay smiles.

Iraq's Booming Economy 

Iraq's economy is booming. Who would have guessed - after all, what we have heard for years is only the negative, negative, negative. The fact that many Iraqis are experiencing a prosperous economy and a rising standard of living in the face of sectarian violence and instability is a very important perspective to include in all evaluations of the decisions we make.

Why is this boom happening now? Truth be told, it's been building for the past three years.

Iraqis received two of the biggest gifts humans can give other humans - hope and with hope, comes opportunity. When a nation loses its control-freak leaders, its bullies and thugs, fear declines, decisions start getting made, trust begins to see the light of day.

The naysayers (read MSM) and the hard left refuse to acknowledge this - they want control, control, control. (Note that the sources of this article are MSNBC and Newsweek.) America has given hope to a nation of historical barterers (Iraq). They are smart enought to take advantage of it. Too bad it took the MSM years to reluctantly admit that what we have done, are doing, and hopefully will continue to do actually helps people get back on their feet. Who knows how many lives would have been saved had the MSM actually supported the removal of an anti-American, thuggish dictator, Saddam, from the beginning.

Freedom is addictive. If people have the chance to develop trust and security, they can do anything.

America's gifts to the world are: hope and opportunity - freedom. We need to remember this.

The value of gifts 

Christmas always seems to bring out the articles about some Scrooge-like economist who says giving gifts destroys value. Joel Waldfogel had to wear that crown for awhile, in return for a high-visibility publication that argued gifts destroyed 10-35% of the value of the money spent on them. Jonathan Chait seems to have picked this strand up, arguing yesterday in The New Republic that the destruction could be much greater:
Christmas spawns industries devoted to useless goods like fruitcake and flavored popcorn. More commonly, it forces us to pay for things we like, but whose cost exceeds their worth to us. Suppose a box of chocolates costs $15. I don't buy chocolates for myself, because they're worth only $5 to me. You choose not to buy $15 cologne because it's worth only $5 to you. Swapping chocolates for cologne penalizes each of us $10. Yes, sometimes you can buy somebody a gift he would buy for himself. But the more likely this is, the higher the likelihood that he actually has it already. OK, so gifts detract from our material welfare. But, you point out, they still provide psychological benefits--goodwill, etc.--beyond their tangible value. The problem is, you can use that argument to preserve any inefficient practice.
Chris Dillow syas the result somewhat depends on the way one asks the question of what is the value. I tend to take the side, though, that the value of the gift to the giver is what is of importance in explaining gift-giving. Waldfogel's later article reminds us in its conclusion that gift-giving could be a means for the giver to demonstrate how keenly they know the recipient's preferences, or be a means to induce a stronger relationship between the two, or otherwise provide social signals. (It might also be that the giver has some unique ability to find things for giving, but that's unlikely to be a reason why gift-giving is prevalent.) Imagine the chocolate-cologne exchange to be between husband and wife: How possible is it for one to say to the other "Let's not destroy $20. Skip giving gifts this year." It becomes a prisoner's dilemma of sorts -- if you abide the agreement and your mate does not, you lose perhaps more than the destroyed value of the gift you purchase for him or her.

I remind one, then, of the value of cash. I have taught monetary theory using Waldfogel as an example for the value of money as a medium of exchange. My parents like to go out to eat but tend to be rather cheap. Thus a gift certificate to a restaurant (but not an expired one to the Cheesecake Factory like that Chait tried to fob off on his girlfriend as a re-gift) provides the most likely means of not destroying value, while demonstrating that I care about them having time out together as a couple.

My wife has solved the problem by identifying only two gift types she will be happy to receive from me at any time -- perfume and jewelry. My pastor sends his siblings animals from the Heifer Project. Etc. In a repeated game of reciprocal gifting, there will be agreements made in the name of family tradition that reduce the welfare loss of Christmas.

It appears my youngest niece -- a few months older than Littlest Scholar -- has understood the theory. I got a note from my brother last week notifying me that she had "researched all the different gift cards on the Internet" for finance charges, wide use, and lack of expiration -- she wishes to avoid gifts that become seigniorage -- and concluded the American Express card would be just dandy, thanks. One could hardly say no. Yet my brother had also told me, the month before, that he had seen his daughter on the award stand for a cross-country race proudly wearing a track suit I had purchased for her the year before. Did she think of her uncle at that time? If so, that would have generated real value to me. If it's more blessed to give than it is to receive, it's not least because I only have control over the first activity.

Tuesday, December 19, 2006

I'm et and she's al 

Turns out my last name has done me well:
Faculty with earlier surname initials are significantly more likely to receive tenure at top ten economics departments, are significantly more likely to become fellows of the Econometric Society, and, to a lesser extent, are more likely to receive the Clark Medal and the Nobel Prize. These statistically significant differences remain the same even after we control for country of origin, ethnicity, religion or departmental fixed effects. All these effects gradually fade as we increase the sample to include our entire set of top 35 departments.
Why do you suppose that is? The paper explains that alphabetical ordering of authors on jointly-authored papers may be the source of this problem.
A surname with a first letter that is earlier in the alphabet is correlated with several proxies for professional success in the economics labor market. We suspect that the accepted norm in economics of alphabetical ordering of credits in collaborative work may play an important role in creating this �alphabetical discrimination.� It is essentially the only institutional structure creating asymmetries between market participants with different surname initials.

...There are several possible channels by which the alphabetical ordering norm can produce alphabetical discrimination.

First, when referring to a paper with more than two authors, it is common to mention only the first author and then to use �et al.� for the rest. Thus, the work of first authors, with surname initials earlier in the alphabet, may be easier to remember.

Second, the fact that first authors appear first on every mention of their collaborative work (even when all the coauthors are listed), as well as the fact that reference lists are normally ordered alphabetically, may draw attention to authors with lower average surnames. In fact, this sort of influence on attention appears to be heavily exploited in the realm of advertising.
Source. (h/t: Greg Mankiw.) And here I thought it was all my hard work.

But I bet you knew that 

Here's a trivia question from the past. Who won more votes in 1996 in California: The California Civil Rights Initiative, ending favoritism in public education admissions, or incumbent President Bill Clinton?


That move to put similar amendments on nine state ballots in 2008 is looking smarter and smarter ... but only for the candidate that uses it. There's no guarantee the initiative helps elect Republicans, at least not those like Bob Dole.

(h/t: Discriminations.)

Bang for your aid buck 

Captain Ed writes a couple of articles yesterday and today on the question of aid for developing countries. First, writing about tsunami aid in Aceh, Indonesia, he notes:
The problem with foreign aid for disaster sites is the prevailing political structure of the country or area. When the government is corrupt, the aid will not go to its intended recipients but instead to support the corrupt government. Massive amounts of cash only serve to allow these regimes to keep and extend their grip on power. In this case, some could be forgiven for forgetting the lesson, given the random and acute nature of the disaster, but it shows that even in these circumstances aid will get diverted to purposes other than those intended.
In the second piece this morning, Ed discusses Bono's frustration with the Democrats in holding up promised money to go to Africa that President Bush had pledged earlier (probably during one of those Bono-John Snow lovefests on tour of the continent). Ed suggests that it wouldn't be a bad thing for the Democrats to get stingy with aid.

That's both right and wrong. It's right insofar as Bono seems to equate more money with more effectiveness. William Easterly debated Hilary Benn, the UK secretary of state, over the point and marks the similar problem.
...there is an unfortunate tendency in the white paper to talk of aid promises being kept simply by spending more aid money. Alas, we have 50 years of experience that tells us that aid spent does not equal aid received by the poor. Aid money spent is the cost, not the benefit. Would General Motors tell its shareholders that it had achieved a breakthrough with consumers by setting a new record for production costs? Mr Benn, could you please break the pattern�could you introduce a permanent moratorium on aid money spent as an indicator of success? Far better to redirect our energy and concentration entirely to the other side of the ledger�evaluate what benefits have been achieved for the world�s desperately poor.
It's not clear to me, though, why Ed would think distribution of DDT would be any more efficient than distribution of mosquito nets. The profit in the chemical distribution, because it could be centralized, would most likely be greater and therefore provide a greater opportunity for corruption. DDT isn't cheap, and mosquito nets are. The benefit cost ratio for netting in sub-Saharan Africa was estimated by the Copenhagen Consensus at greater than 10 to 1. The advantage of the netting is that it is under individual control. Distribution of drugs to combat diseases as well tend to be very cost-effective. Distribution can be performed by NGOs or volunteer aid organizations. I'd go so far as to argue that the lack of sexiness of mosquito netting makes it more desirable. (Angelina Jolie and Sharon Stone notwithstanding.)

The Bush administration has tried to make aid more results-oriented with its formation of the Millennium Challenge Corporation, an aid-granting agency that acts outside the usual rules that govern State Dept. aid programs. But even MCC has had major difficulties with establishing sufficient controls to assure money given to targeted governments reach their intended goals, and there has been a question over the use of quantitative criteria (this is a research interest of mine, and so as not to bore you I won't go into that here. Write me if interested.) The MCC's operation is a continued matter of discussion, and I will be interested to see what happens to it when the Democrats take charge next month. If Ed is correct that on this one the Democrats have it right, it should strengthen the commitment of MCC to evaluate the poverty reduction performance of its investments to improve the initiative that Bush began four years ago.

P.S. This note from Political Calculations tells how science might help target the aid for malaria. But a political calculation has to ask whether or not political actors will have an interest in delivering that aid.

Monday, December 18, 2006

The Feminists Will Never Quit 

A little background - I was a high-school athlete in a city that had no school sponsored sports for women. I swam on an AAU team sponsored by the YMCA (yes, YMCA). It was a terrific experience.

In 1972, Title IX
gets signed into law and sport options for women explode. I thought it was great. Then along came the "equality" crew. College sports programs had to be "proportionate". Give me a break - I like opportunity but when feminists force "proportionality" in a college with a football team, it makes it difficult to continue support for smaller male dominated sports - like wrestling (which has taken a real hit since "proportionality" has been forced on universities).

As with most laws, the intent of Title IX was not to force proportionality but to provide opportunity. Now the feminists have decided that college female basketball teams should no longer be allowed to practice against guys- because it does not represent "gender equality". Feminists, I have soemthing to say to you, "We are not physically equal, never were, never will be."

My husband and I attend the U of Minnesota women's basketball games. The team is quite good and has had some terrific years. For someone like myself, going to the games is pure joy - as the old commercial said, "You've come a long way, baby." The skill level is so much more than anything I ever considered in high school. It is wonderful seeing the change over the years. And yes, every year the MN women bring the guys they practice against onto the court for a public half-time "thank you."

To young girls, I say, "Go for it." To the feminists, I say, "Shut up. Let them play, improve and enjoy the benefits they have."

Injustice temporarily delayed is... 

The Grand Forks Herald reports that the trial between the NCAA and the University of North Dakota over the latter's use of the Fighting Sioux logo will not start until Dec. 2007. The temporary injunction allowing the Sioux logo despite the NCAA's ban on Native American mascots will be in place in the meantime.
In a phone conference Friday, attorneys from both sides said the amount of preparatory work for the case would make even the December trial date difficult to manage.

"We don't relish the thought of the injunction staying in place that long," said Wick Corwin, a Fargo-based attorney who is part of the NCAA's legal team. "But a September trial would require very aggressive work."

Peter Billings, an attorney hired by the Attorney General's Office to assist on the case, said his team intends to fly across the country to take depositions from all 20 members of the NCAA Executive Committee.
The judge suggests reworking the logo or nickname. I'd rather watch the NCAA continue to twist slowly in the wind on this ill-advised venture.

How big a signal do you need? 

There's a debate raging in the economics profession over the decision of the profession's national organization's help-wanted publication to remove some language from ads that discriminate in favor of groups historically discriminated against. Inside Higher Ed reports:
When professors at the University of Vermont sent information about a job opening to the American Economic Association this fall about a tenure-track opening, they didn�t think their notice was unusual. After describing the position, the notice said that the university �welcomes applications from women and underrepresented ethnic, racial and cultural groups and from people with disabilities.�

Those words never made it into the economics group�s job notice list because they were deemed discriminatory by the association. That view has angered enough economists that the association�s board will be meeting next month to consider changing its policies on job listings, but for now economists are trading charges of discrimination, censorship and insensitivity.

I am a member of the AEA, as are most people in the field, and our university places ads in the JOE. The organizaiton's longtime secretary-treasurer, John Siegfried, says �We have taken the position that we do not want to help anyone discriminate in any way, shape or form,� and I agree with that. Our ads notify that we do not discriminate, and that we look for faculty able to "to teach and work with persons from culturally diverse backgrounds."

That apparently isn't good enough for some people, as Clark Patterson notes. Some people absolutely need a statement that they in particular are encouraged to apply. That is, they want some signal that the deck might be set in their favor. An EEOC lawyer calls this practice a "proactive measure".

It is common now for candidates I interview to have looked at our website and seen what our department looks like. I would view the "encouraged to apply" statement as inframarginal to a candidate really concerned about whether we are sufficiently committed to diversity. (Besides, we're ground zero.) It's a testable hypothesis: Someone should see whether more minority applicants are encouraged by particular statements about diversity commitment, ceteris paribus. It would make someone a nice masters thesis, if they had the data.

UPDATE: Turns out they did alter our ad. The sentence "...we invite individuals who contribute to such diversity to apply" used to have a list of the kinds of people who contribute to such diversity.

Credit controls, credit rationing, and financial aid 

We bemoaned on the air Saturday the decision of new Congressman Tim Walz to make the minimum wage his first piece of legislation. I argued that this harms the future lifetime incomes of young workers, particularly minority workers. (Michael's post on the item is here, and here is something I wrote last year.)

Not satisfied with that attempt to control prices and quantity at the same time, Rep. Walz and others now sally forth into student loans.
To help pay for dropping interest rates on student loans from 6.8 percent to 3.4 percent, many Democrats are promising to back pay-as-you-go budget rules that would force members of Congress to identify tax increases or spending cuts to fund any new spending.

Some Democrats, including Sen. Edward Kennedy of Massachusetts, the incoming chairman of the Senate education committee, also say the government could save money by making college loans directly, relying less on private lenders.

Minnesota Democratic Rep. Betty McCollum, a member of the House education committee, and whose district includes 32 higher education institutions, said that Congress should target subsidies to oil companies to pay for the plan.

The plan to lower interest rates that lenders can charge students is part of a broader Democratic effort to make it easier for students and parents to pay tuition by increasing Pell Grants from $4,050 to $5,100 per year and expanding tax credits, among other things.

...Democratic-elect Rep. Tim Walz of Minnesota, a teacher, said the plan to lower interest rates is a good step but only "one little piece of the puzzle."Since I was in school in '89, less than 20 years ago, 70 percent of college costs were paid by grants," Walz said. "Today 70 percent are paid by loans. So there's a broader issue here of how we finance public education."
There is no longer even the pretend-reasoning used in the 1970s of needing to lend money to students to get more people in science and engineering and math for national defense purposes. (Full disclosure: I received $4700 in such National Defense Student Loans in the 1970s with 3% interest. At the time they were created, 3% was not a bad rate, but by the time I was in college the rate was negative in real terms. P.S. The loan was all paid back.)

Ted Kennedy's point is actually the most valid of the bunch: If the government can borrow funds to lend to students at a lower rate than private banks can (even with the backing of Sallie Mae) there might be some justification. But to flat-out guarantee a rate below the rate we receive from the government when it borrows money from us certainly means that Congress wishes to subsidize students. It also means that such loans will be allocated by something other than price. Credit to college students will be rationed by government rules rather than the market.

Betty McCollum illustrates what I said on the air Saturday: If she wanted to give money to students through a tax increase there would be accountability, but she instead chooses the close-a-loophole dodge. By what principle does one tax oil companies to give money to students?

Friday, December 15, 2006

Dogblog of the week #3 

A peaceful dogblogging Friday to you! By now your Christmas cards are either a) done or b) screaming like heck to be done. This means you are either a) exhausted or b) exhausted and harried.

Buttercup makes for a good sleeping companion; there is competition in the house for who gets to "take a cuddle" with BC. The only one she will not sleep with is me. It's mutual: I don't much care for waking with a dog's backside in my face, and I suspect she feels the same.

Happy Friday! New stories below.

The unwisdom of consensus 

Craig Westover argues about the lack of value in consensus.
A mandate to produce consensus for its own sake is also no way to solve problems, much less run a state.

Gov. Pawlenty has said that perhaps the reason Republicans took an election drubbing is they didn't get the job done. More than a little truth there, but Pawlenty, a disciple of Maharishi McCain (Sen. John) and a pilgrim on the path of transcending politics, seems to be seeking Nirvana in a mantra of consensus. What is consented seems to be of secondary importance.
I of course remind you of Lady Thatcher's view of consensus. But perhaps a few more words are in order.

James Surowiecki's The Wisdom of Crowds helps us understand why some types of consensus decisionmaking will work and others will not.
There are four key qualities that make a crowd smart. It needs to be diverse, so that people are bringing different pieces of information to the table. It needs to be decentralized, so that no one at the top is dictating the crowd's answer. It needs a way of summarizing people's opinions into one collective verdict. And the people in the crowd need to be independent, so that they pay attention mostly to their own information, and not worrying about what everyone around them thinks.

...Essentially, any time most of the people in a group are biased in the same direction, it's probably not going to make good decisions. So when diverse opinions are either frozen out or squelched when they're voiced, groups tend to be dumb. And when people start paying too much attention to what others in the group think, that usually spells disaster, too. For instance, that's how we get stock-market bubbles, which are a classic example of group stupidity: instead of worrying about how much a company is really worth, investors start worrying about how much other people will think the company is worth. The paradox of the wisdom of crowds is that the best group decisions come from lots of independent individual decisions.
I think Surowiecki's insight tells us exactly why this sudden love affair with consensus is doomed to failure. In the case of the Iraq Study Group, the critique most telling is the lack of diversity in the group that made the decision (Jed Babbin's referring to the committee as the "fabulous Baker boys" is trenchant.) It also suffers from the problem that there isn't an objectively determined 'right answer' to the situation in Iraq. In his book Surowiecki writes:

...the idea that the right answer to complex problems is simply "ask the experts" assumes that experts agree on the answers. But they don't, and if they did, it's hard to believe that the public would simply ignore their advice. Elites are just as partiasn and no more devoted to the public interest than the average voter. More important, as you shrink the size of a decision-making body, you also shrink the likelihood that the final answer is right. Finally, most political decisions are not simply decisions about how to do something. They are decisions about what to do, decisions that involve values, trade-offs, and choices about what kind of society people should live in. There is no reason to think that experts are better at making those decisions than the average voter. (269)
In the case of the Minnesota Legislature and its relation to the governor, it will be that too much attention will be paid by the DFL to what Pawlenty thinks and vice versa. It would be very nice if they could make policy without regard for 2008, but it's tremendously naive to think it can happen. Consensus does exactly what we don't want -- we want competition between politicians, because we want to be able to punish them when they make bad decisions. The problems the GOP faced in Minnesota stemmed from its representatives wanting to avoid competition from the DFL.

This is why, to return to Craig's point, we cannot focus on compromise -- and it is not consensus when one side compels the other to surrender its principles. Crowds work to solve problems of cognition, coordination and cooperation. They do not solve many of the big problems political institutions face. What we need are more Maggies who are conviction politicians, not consensus politicians.

Where are you going with that piggy bank? 

The U.S. Mint has issued new rules to prohibit the melting pennies and nickels. This is the result of sharp increases in the prices of copper, nickel and zinc (it's worth remembering the early 1980s, when the copper/zinc ratio was changed to reduce the metal cost of pennies.) The government currently loses 3.34 cents on each nickel produced and 0.73 cents on each penny.

Monies can be divided into two categories: fiat and commodity. Fiat is money by government decree; commodity money is something with intrinsic value that's generally accepted as a medium of exchange. Pennies and nickels have now, thanks to the rise in metals prices, traversed from one category to the other. I find it interesting that the U.S. government would rather lose seigniorage and keep these coins in circulation than withdraw the penny and nickel.

Worth noting: even in 2004, when prices for copper, zinc, and nickel were much lower, the operating profit margins on nickels and pennies were less than 10%, compared to more than 60% for other coins. (Source: US Mint annual report.)

Little things can count 

A high school facing budget cuts makes the choice to eliminate some advanced placement courses. That can have a cost on the school's seniors when they apply to selective colleges. So in one case, the school's guidance counselors sent letters to the colleges explaining the situation.
The letter of explanation that Westwood officials are sending to ... admissions officers tells them to "be aware that we experienced substantial budget cuts last spring which significantly impacted our course offerings for the 2006-2007 school year."

"We encourage all of our students to build a solid academic record in preparation for college by taking four years of all their academic subjects," the letter continued. "A number of seniors who would have continued on with a fourth year of science, social studies, and/or foreign language, or combination were unable to take the recommended courses because they were not offered."
The school cites rising utility bills and special education as the cause of the cuts, accompanied by no budget increase the previous year and a 4.6% increase this year. The article does not give us an idea of what alternatives there were to cutting these courses. It does note that for one school "rigor of curriculum" is the largest factor in admissions, while another says they cannot "penalize a student for classes that aren't available." So we know the classes cut had a cost to the students of some kind, but not how much and without against which to compare that cost.

(h/t: Chronicle news blog)

Toughness and Love 

American soldiers are the greatest fighting force in the world. But their fierce discipline and mighty power are tempered by the love they show for those who are weak or needy.

As in years past, our soldiers are collecting supplies for children and families in Iraq and Afghanistan. SCSU Scholars has supported this program in prior years. Again, we are requesting your assistance to our soldiers as they demonstrate the generosity of Americans.

Ok, maybe you think this sounds kind of hokey - but let's be honest - our military, regardless of war, regardless of location, regardless of political whim has always gone out of its way to provide the locals with necessities.

Spirit of America would like your help in the following two areas:
1 - Supplies for school children in Iraq and Afghanistan - remember, girls are going to school in Afghanistan for the first time in decades. Though the Taliban would like to prevent their education, it is happening - you can help keep it going.
2 - Blankets - those of us in MN understand cold to a degree - what we don't understand is cold without central heat. A blanket would come in mighty handy.

If you or your church group, school group, or other group can help, please click on the link highlighted above and pitch in. We can make a difference.

For extra measure, toss in some bags of M & Ms and Double Bubble gum - for our guys - these are some of their favs.

Thursday, December 14, 2006

A test of economic lesson podcasting 

About a month ago I wrote about podcasting for education and mentioned there were ideas I wanted to try. I had hoped to do it this fall but got too busy. So as the semester winds to a close I came back to the idea.

William Allen, a professor at UCLA, was at one time president of the International Institute for Economic Research there; its funding came from Union Oil. One of its outreaches in distributing economics was a three-minute recording that ran on KBIG in Los Angeles from 1979 and eventually syndicated and lasted for fourteen years. Each would have Allen making a fundamental point about economics and applying it to current affairs. I recently was given by a friend eleven pamphlets that contained the essays Allen wrote and read. (Some of the essays were re-released as a book ten years ago, but I do not think it is in print.)

I think a three-minute point may be the best we can do with teaching students, and I have thought it might be good to have a set of these for a principles course. Doing them as stories and parables rather than dry chalk-and-talk or one of those multimedia CDs may be more effective, in my usual less-is-more philosophy. So I have read one of Allen's very early radio essays and put a little music behind it (a bit of Robert Fripp doodling on an early King Crimson album.) It took me less than two hours to do, and if it would have taken another two hours to write the script, well, you can see it might be not the most efficient use of time. But maybe it is.

Anyway, if you're interested, here are two mice.

Econ's killer app, not 

The Pope Center keeps a series called "Course of the Month" of rather outrageous curricula being offered for college credit. Alas, it appears last month's was one for economics.
This course comes to our attention by way of UNCG's student newspaper, the Carolinian. In the Sept. 19 issue, the paper reports:
The ECON 201 class, previously taught with a structured syllabus, lecturer and books, is now run and taught entirely through an online video game in the comfort of the students' own home on their own time.

The game was created by over 30 faculty and staff from UNCG's Department of Economics and the Division of Continual Learning. The game is called, simply, ECON201 and it revolves around alien species that have crash-landed on a futuristic, post-apocalyptic Earth. The students need to make well-reasoned economical decisions in order to get to the next level and survive. To survive the game means you survive your course - gaining three credited hours.
Jon Sanders points out that the course site has other pages on theory and video clips, but my limited experience with video games is that you don't learn much from the manual.

Economics is a way of thinking, as Keynes once said, a means of seeing the world. Experiencing an economy is not particularly helpful even if you accentuate the tradeoffs, since experiencing an economy is something we do every day we interact with other humans.

A Super Tuesday for the end of affirmative action 

Ward Connerly is seeking a set of state referenda in 2008 in which to follow up on his successful initiatives in Washington, California and most recently Michigan to end racial preferences in state agencies including public universities.

Connerly said he will visit Arizona, Colorado, Missouri, Nebraska, Nevada, Oregon, South Dakota, Wyoming and Utah over the next 60 days and then decide how many campaigns to launch.

"Three down and 20 to go," Connerly said during a conference call. "We don't need to do them all, but if we do a significant number, we will have demonstrated that race preferences are antithetical to the popular will of the American people."

Connerly said he hopes for a "Super Tuesday of equality," a win across the board, in the November 2008 elections. He led the campaign for Prop. 209, which passed with 54 percent of the vote, pushed a similar initiative in Washington state that passed in 1998 with 58 percent and helped with the Michigan law that passed Nov. 7 with 58 percent. The California business consultant said he chose the nine states based on the interest residents have expressed in an initiative campaign and on the degree of awareness of the issue.

While Connerly's efforts in Michigan didn't have enough of an effect to flip races to the Republicans this year, it is noteworthy that all but one of the states are midwest and western states that Republicans will likely need to hold to keep the White House. Much like the use of the marriage amendment, the civil rights initiatives of Connerly could be a turnout mechanism for Republicans.

A tale of two D2's 

It was reported yesterday that SCSU will stay in Division II -- and away from any evil mascots -- and seek admission to the NSIC.This is quite different from the representations I got six months ago while teaching economics of sports. There I had some of the athletic department in to visit with the class about the workings of intercollegiate athletics and the NCAA. None of them were head coaches of a program at that time. There was a good discussion, and not much agreement over what to do. One number we heard bandied about was that the cost of moving to Division I (AA for football) would be $3.5-$4 million.

Saigo made the decision Tuesday to apply for NSIC membership, following the recommendation of Kurtz.

Coaches of individual sports were involved minimally in the decision to apply for membership in the Northern Sun.

�We found out about it through different meetings we had, but we didn�t have a lot of input into it that I�m aware of,� St. Cloud State football coach Randy Hedberg said.

But that discussion never happened here on the campus more broadly, as it did at Mankato:

Students, student-athletes, faculty, staff and members of the Mankato community expressed opinions about the University's athletic conference affiliation options at an open forum Dec. 13.

President Richard Davenport led the discussion, and additional information was provided by Vice President for Finance Rick Straka, Special Assistant to the President Dean Trauger and Athletic Director Kevin Buisman.

The discussion focused primarily on two options: Applying to join the Northern Sun Conference (Division II) or moving to Division IAA athletic competition. President Davenport pointed out that applying for Northern Sun membership requires a decision by Jan. 1, adding that acceptance into the league isn't guaranteed if the University decides to apply.

I lucked into meeting a former athletics official of SCSU who was familiar with our move to the North Central Conference back in the early 1980s. The athletic director at the time went to the president and said he wanted to make the move. The president responded that if the AD thought this was a good move he should study it, and the first place he should go to study it would be the faculty and students. What was found then was broad support for the move to the NCC among the faculty and students, and thus it was done.

I have no memory of such a survey being done in the present decision with any on-campus group. I have no basis for understanding why this decision is made. Again, it could be a good one, but from an administration that continually refers to us as a community it appears to have gotten little input from that community. The alumni who support athletics that I know have also told me of frustration in not feeling sufficiently consulted and informed of the process. This is not what is happening at Mankato, and SCSU alums and faculty and staff have good reason to wonder why.

One must also wonder why Mankato's administration represent the cost of moving to D1-AA to be $2 million (a number they say they cannot afford) when the number given here is almost twice that. Yet the demand for football games by power conference teams against non-conference foes -- OK, let's say it: walkovers -- has gone up since the 12th game in the schedule became the rule. Alumni are realistic enough to recognize that a new D1-AA program might have to be the sacrificial lamb against a Big Ten or Big 12 team to gain enough money to pay for the move, at least for awhile. This pays pretty darn well, too.

Do I know if SCSU or Mankato should be in D1 or D2? No, I don't. I only know two things: One, the tradeoffs are sufficiently large to warrant investigation as so many other schools have done, and two, only one of the two schools is actually having an open debate of the question. Which school would you rather root for?

Wednesday, December 13, 2006

Mmmmmmmmmm! Flatliner fries! 

Gary asks whether St. Cloud will have a Heart Attack Grill? Gary seems too modest to post the home page, probably because of those nurse outfits. Cheesy indeed.
�Nurses are the most sexually fantasized-about profession,� said Sandy Summers, executive director of the [C]enter [for Nursing Advocacy]. �We�re asking people, if they�re going to have these fantasies, please don�t make it so public. Move these sexual fantasies to other professions.�
St. Cloud does not need this on top of the new Hooters and the roving pr0notrailer for the adult supper club up the road. (I'm fully expecting Foot to report on this.) Besides, when it comes to fattening food, we have Arby's!

And Mr. Blackwell's next, Patty 

Stuart Rothenberg:
OK, it�s that time of year again when we can all vote for the best and worst candidates and campaigns. Here are my nominees:

Please Don�t Ever Run Again

� Francine Busby (D-Calif.)
Patty Wetterling (D-Minn.)
� Bill Gluba (D-Iowa)
� Bill Weld (R-N.Y./Mass.)

(H/t: Larry Schumacher)

This is a little premature 

I spent a little time Saturday on the air discussing the Mark Olson situation. Yesterday a number of smaller Minnesota papers ran a story speculating on Mary Kiffmeyer's return to politics. I'll repeat what I said then, and mean no disrespect to Mrs. Kiffmeyer, who I hold in high regard: Rep. Olson deserves his day in court. The hastiness with which he has been shunted aside by Republicans is unseemly and smells of the panic of a party that hasn't figured out how to respond to badly behaved public officials in their own ranks. If Olson does step down or is expelled, then it will be time for us to discuss Kiffmeyer's return.

Larry notes:

if Republicans still held a one-vote majority in the House, as they did for the last two years, how many out there think that they'd still be kicking Olson out of the caucus?

Hands? Anybody?

Why yes, of course!

Be a FAN of higher taxes! 

From the MnSCU online newsletter, December 2006:

Would you like to be more proactive in supporting our colleges and universities? Help us share the good news about the system with state leaders and build public support for one of Minnesota's greatest assets. Become a FAN of Minnesota State Colleges and Universities!

The Government Relations division invites you to sign a petition through the Friends Action Network and help support Minnesota State Colleges and Universities.

FAN is a non-partisan grassroots network of faculty, students, staff, alumni and community members committed to building public support for the system's annual legislative requests. FAN is not affiliated with any party but is designed to educate state leaders and those supporting our system on issues affecting the system.

Strong state support for the system translates into a strong workforce and improved quality of life for all Minnesotans, now and for future generations. From the thousands of students we prepare each year to the programs and services that are integral to our state and regional economy, the impact of the state colleges and universities can be felt in every corner of the state.

This from the people who will tell you that a state dollar spent on education returns $10.87 in "economic benefits" without pointing out the contribution paid by students directly or through financial aid. They do at least assume 60% of students who graduated from MnSCU schools would have gotten degrees from other schools in the absence of MnSCU -- meaning that they were subsidized by your tax dollars.

Diogenes' college search 

DJ Drummond didn't like the list Larry Arnn gave to Hugh Hewitt of serious, old-fashioned colleges. Arnn said on-air that it was a hastily constructed list and likely to be incomplete. (Listen here.) Hugh characterizes Claremont, where I taught for a year, as on the list but I think he has to prod Arnn to include them. (I also taught at Pitzer next door for three years, but I certainly would not call Pitzer old-fashioned -- indeed, it was almost conceieved to be the anti-CMC.)

So quibble the list if you like, but the remainder of the interview is wonderful, in particular Arnn's question of a college admissions official during a tour given to him and his daughter, "what values would you like to instill in my daughter?" As George Stigler once observed, "The typical college catalogue would never stop Diogenes in his search for an honest man." Doesn't that strike you as a shame?

I sent the Arnn interview to my niece, a high school senior, this morning. Give it a listen, and then go back to read Jeffery Hart's What is a College Education? and Ben Rogge's The Promise of the College. (The Stigler quote comes from there.) See also my post on Intellectual Takeout.

When to flip the switch? 

The Michigan Civil Rights Initiative (Prop 2) and its sought-after delay in implementation brings a letter to the University of Michigan's Michigan Daily newspaper:
The University's motion to delay Proposal 2's application to its admissions process until finishing its annual cycle is not only appropriate but is in the very spirit of Proposal 2. By outlawing affirmative action policies, Proposal 2 strives to eliminate double standards. The University and University President Mary Sue Coleman are absolutely correct that evaluating individuals applying for spots in the same incoming class under separate sets of criteria is unfair.

What they have failed to do is see past their rhetoric of diversity to the fact that they have been applying a double standard all along with their affirmative action policies. While it is inappropriate to "flip the switch" mid-year, the change should be made this summer.
I still believe, as I did yesterday, that decisions could have been adjusted to await for the outcome of the vote, since unlike a court decision it came as no real surprise to the universities. Nevertheless, the observation that affirmative action has been a double standard "all along" says exactly what President Coleman needs to hear. (h/t: Discriminations)

Tuesday, December 12, 2006

One reluctant cheer for Pinochet 

The death of Augusto Pinochet coincides with my use of the Commanding Heights video series from PBS, in which the use of free market economics in Chile is contrasted with Pinochet's often-brutal rule. The WSJ editorial cites on 3,197, but Rudy Rummel's statistics on government-sponsored mass murders put the number reasonably closer to 10,000. That the Chilean government today chooses not to give Pinochet a state funeral is quite reasonable.

That does not takeThe video portions of the second episode -- see Chapters 6 and 7 from this page for the videos -- portray a view of Pinochet that many of the left will find far too flattering.

What is important to remember about Pinochet's commitment to "the Chicago Boys" is that it was an arranged marriage, an almost shotgun marriage like that embraced (sorta) by many transition economies getting caught in very high inflation 15-20 years later. He did not come to power to fix the economy, but fixing it became an imperative.
JAVIER VIAL, President, Association of Banks, 1973: I think that Pinochet's plan was basically the plan to manage an army. He didn't have an economic policy to manage a country.

ARNOLD HARBERGER, Professor Emeritus, University of Chicago: After a year, year and half of military government, you still had 20 percent per-month built-in inflation that wouldn't go away until something structurally changed.

NARRATOR: One of those who plotted the coup went to talk to Pinochet face to face.

ROBERTO KELLY, Junta Economic Planner: I told him, "You've been called Chile's savior, but you will go down in history as the man that buried Chile." He was very shocked by this, and he said, "Okay, you've got 48 hours to come up with a national plan to fix the economy."

ARNOLD HARBERGER: The only people who had a serious blueprint of how to get out of this were this group called the Chicago Boys.
That Chile led the way for most of these countries to abandon monopoly capitalism for a free market seems lost on most people. The contrast to Argentina -- a country much more developed, one that seemed poised for takeoff before the end of the first globalization era in 1914 -- could not be more striking. There cannot be any doubt that Pinochet was a brutal guy, with millions detained during the coup -- but there is a higher standard of living there today, while Argentina continues to go sideways.

I can't believe I lost 

The poor babies that are Michigan's public universities are crying that they cannot follow the Michigan Civil Rights Initiative's strictures against affirmative action in admissions, and seeking to have the initiative not take effect on December 23, as voted last month. Of course the proposal has been prepared for the ballot for three years; why didn't any of those universities plan for this possibility?

Monday, December 11, 2006

Christmas for "Our Guys" 

This afternoon, my husband and I just shipped our latest packages to our guys holding down the fort in Iraq. We began our program in the summer of 2003, shortly after Baghdad fell. The coverage by the MSM (mainstream media) was cool at best. It's gone downhill since. We want our soldiers to know they are supported.

American has become the "reluctant" global leader. We do not want to run the world - we'd all be happier here, period. However, there are times in history when a powerful nation does not get to do what it wants to do; it must do what needs to be done.

Two prominent individuals have voiced this view within the past few days. Jeff Jacoby, opinion columnist for the Boston Globe, just republished a terrific article (written in 1994) in memory of Jeanne Kilpatrick who died on the 7th of December this year. The situation Kilpatrick faced in the 1980's with the bullies in South America parallels our situation today with the bullies in the Middle East. The article is available via a "for fee" archive or from Jacoby's email list. (If you would like the article, let me know your email and I'll send it to you.) On December 8, Shelby Steele, a fine, fine current mind, wrote an article that explains our reluctance. He also spells out what will happen if we fail - it's not pretty.

What does this have to do with our shipping today? Soldiers Angels provided me with the contacts I have shipped to over the past 3+ years. It is our way to "walk the walk" rather than just "talk" support. Our guys are our front line against people who want us dead. The least we can do is make sure they know we care. Soldiers Angels is a great way to get involved - either by yourself or with a group.

Beetle Bailey dollars 

Semester is winding down, last classes today, so people seem a little goofy. I've been known to slip in class and use the occasional curse word. Teaching the first-year students this fall I decided to try to control my behavior. We created a fund into which a dollar would go from my pocket for each bad word used. By the third week of class I was in double digits, and $16 by the end of September. It was monumentally embarrassing to see the number on the blackboard each lecture.

I ended the semester today. Bad word fund = $21. The students agreed to cookies or bagels for the class with the money. You know they had visions of huge pizza party dancing in their heads in early fall. Incentives matter.

So at prices much lower than the FCC charges, I can change my frackin' behavior. Scott Adams thinks I should change at home, too.

One thing that has always puzzled me is why we don�t see special treatment facilities to help the children who are victims of cursing. We have special hospitals for all sorts of other diseases and afflictions, but no money goes into helping the children who accidentally watch HBO.

You might wonder how dangerous it is to expose children to curse words. I have never seen a scientific study on this topic but it�s easy to calculate the danger. For example, parents let children ride bicycles on the street. But parents do not allow children to hear vulgar words. Therefore we can deduce that cursing is more dangerous than being hit by a car.

Had they such facilities, my kids would have their own wing. I don't serve 'em beer like some guys do, but I make sure their vocabulary is fully stocked.

I sense a dollar jar going into my kitchen as I type this.

The rich were not always among us 

Loyal reader jw (still sleeping in his Buckeye jacket) sends along an article titled "It's true: The rich do own everything." Just that the rich number 37 million. While a quarter of those are American and another twenty percent are Japanese, some of them are from China, it appears:
China is a rising star and accounts for 8.8 per cent of world household wealth. At the same time, the distribution of wealth within China is growing more unequal.
Of course: At one point China probably had all but the royal court living at roughly the same level -- subsistence. As growth took off there, some will grow faster than others, increasing inequality. I think this will be something we see through the rest of my lifetime: As more countries industrialize and connect to the global economy, measures of inequality will rise within each country that does so. Equality at subsistence levels doesn't strike me as a laudable policy goal.

One noticeable thing in the study is the relatively small share of US financial wealth held in savings accounts. We prefer equities.

The study is from WIDER, part of a research university set up by the UN in Finland. The study can be viewed.

Long on Bernanke, short on Prescott 

Over the weekend the WSJ ran an op-ed by Marc Sumerlin (subscriber link) referring to Ben Bernanke as "the accidental inflation hawk." It is full of praise for Bernanke, awarding him an 'A' for his first year as chair of the Federal Reserve, making "fact-based decisions rather than strategy-based decisions," but saying that Bernanke has somehow not engaged in inflation targeting:
While economic growth was decelerating, there were no signs at that point that inflation was coming under control. In fact, wages were accelerating according to the available data, which usually gives a central bank more room to tighten. What is most amazing in retrospect is that the first Fed chairman ever to advocate inflation targeting was pausing as inflation was high and possibly accelerating. A key critique of inflation targeting -- one to which I still subscribe -- is that the target could in practice lessen the Fed's ability to look far down the road. But in this case, Mr. Bernanke was not a slave to the latest figures and bet that inflation would subside. So while a belief in inflation targeting has not added value to the decision-making process, it hasn't done any harm so far.
I hastily come to Bernanke's defense by noting that it isn't really inflation targeting but inflation-forecast targeting, or expected inflation targeting. The reason the Bernanke strategy has worked is because they have used inflation yardsticks and forecasts that have turned out to be reasonable. Sometimes, it may make you appear to be an inflation dove. But when done well it is actually quite bold, in both directions. You could look it up.

Now to some people like Ed Prescott, who knows a thing or two about economics, the debate over monetary policy is much ado about nothing. The last 25 basis points just doesn't matter very much. (Previous link for subscribers; Mark Thoma has captured most of the editorial, and makes comments on stabilization policy with which I agree.) But we can never be too certain: Monetary policy, we are reminded, works with long and variable lags. That makes forecasting all the harder, but it nevertheless seems workable. William Polley notes
Where monetary policy's effect on output is concerned, expectations matter. That is a fact which is not lost on Mr. Bernanke, especially these days.

Why isn't all employment contingent? 

I spent some time on the air Saturday discussing a post Dave Downing had on employment conditions and the minimum wage. The point I raise is something I've used ever since I read it in Paul Heyne's Economic Way of Thinking.
Have you ever reflected on the fact that we all obtain our incomes by inducing other people to provide them? We also produce some goods for ourselves directly, of course, and there may even be a few hermits in the coutnry who never use money and never have to depend on other people's cooperation. Except for counterfeiters, however, we all get our money incomes from other people. As Adam Smith put it in The Wealth of Nations: "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner; but from their recard to their own interest. We address ourselves, not to their humanity, but to their self-love, and never talk of our necessities but to their advantages."

We persuade them to hire us, to buy from us, to lend to us, or simply to recognize that our status entitles us to income. The last technique is one employed by children to extract income from their parents, by retired people to get Social Security benefits, by people who qualify for unemployment compensation, and by the lucky holders of winning lottery tickets, to mention just a few. Another way to put it is that we supply what other people are willing to pay for. In short, the distribution of income results from supply and demand.
Dave relied in his post somewhat on altruism. In an email to me he later says he thinks the relationship is more one of symbiosis -- largely true, I think, but a word that is likely to confuse. Allow me to demonstrate.

This morning's Chronicle of Higher Ed (subscriber link) notes that the AAUP has produced a "contingent faculty index" to measure the number of faculty teaching without tenure or the promise of review thereof. It finds that the share of faculty working off the tenure track has climbed from 43 to 65% since the 1970s. While at one time most fixed termers were either visiting faculty on sabbatical leave (or the junior faculty member who fills in for the person off on sabbatical), it has now become de rigeuer in some fields to spend a few years in visiting positions before landing a tenure-track job.

Most of this it couches in terms of academic freedom:
In terms of pay and physical working conditions, full-time non-tenure-track faculty may well be on a par with their tenure-line colleagues. They are likely to have an office and access to campus facilities and services. However, because of the contingent nature of their employment, they face many constraints on their academic freedom. With no employment guarantee beyond a limited term and facing a reappointment decision as soon as the second semester� where a reappointment is a possibility at all�the non-tenure-track faculty member is in a vulnerable position. Although the initial hire may have involved a faculty committee, successive reappointments may well be at the discretion of a single administrator�producing the kind of hesitancy regarding controversy or offense in teaching and research that limits academic freedom.
Now compare this to the statement at the beginning of this post. Some of us can persuade universities to agree to a long-term arrangement. Others, with less experience, perhaps cannot yet make that argument persuasive to a university. So how do we prove our reliability? How do we make ourselves more persuasive, if not by developing a resume of teaching, research and service?

AAUP has created as well a list of recommended institutional policies for using part-time faculty. They in essence increase the cost of releasing part-time faculty. In so doing, it may become harder for those workers to gain work, since universities must factor the cost of ending a faculty member's contract in the decision to hire one.

As I said on the air, minimum wage laws are a suppression of free speech between a worker and a firm: The worker cannot persuade a firm of his willingness to work for $4 an hour; the firm cannot advertise the possibility of hiring at that price. So too is this contingent faculty debate really one about suppressing the speech of some faculty -- young and with new ideas -- to offer to take a job with a different level of academic freedom than that tenured faculty enjoy. In whose interest does AAUP speak in this case? Or let me ask the question differently: Is there any evidence that the increased use of contingent employment arrangements for new PhD's in the humanities has reduced the supply of English and history professors -- to only name two? I see little evidence that it has, and it might indicate that such arrangements are not viewed as a barrier to work in their chosen fields.

Who you got? 

GOP Bloggers is running a primary straw poll on the 2008 GOP presidential primary race. Romneymania seems the order of the day. Take a look and vote!

Saturday, December 09, 2006

Dogblog of the week #2 

Here's a unique Buttercup habit. The dog insists on marking her food dish by chewing it no end. We eventually have to pitch them when the plastic begins to drop off, but that typically takes a month or two. And given plastics are pretty darn cheap, why not?

This dog will help us dish up some news today, so she's staying here at the top of the blog today.

(Saturday, 245p: Darn, forgot I had put this in the queue! She's going to the radio now to listen.)

Friday, December 08, 2006

And, in shocking news,... 

Americans who buy meat and those who raise livestock may pay for the current ethanol boom.

�Consumers will pay most of the bill,� said Vernon Eidman, a University of Minnesota professor known for his work on ethanol economic issues.

Ethanol plants are sprouting up like the corn they use to produce the motor vehicle fuel. The demand for corn will be so high that it will force up the price of many grains used to feed livestock and, thus, the price of meat in grocery stores, Eidman said.

Source. And in other news, the sun came up this morning...

Governor Pawlenty is challenging other states to boost their ethanol consumption. He told a meeting of the Governors' Ethanol Coalition that the corn-based fuel will reduce the nation's dependence on foreign oil. The group consists of 31 states and five countries that support ethanol. But unlike Minnesota, few of them mandate ethanol use.

Minnesota was the first state to require that all gasoline sold in the state contain 10-percent ethanol. Montana and Hawaii have passed similar laws, although they haven't gone into effect yet. This year, Pawlenty pushed for doubling Minnesota's ethanol mandate to 20-percent by the year 2013. He says the events of the last few months have made it clear that the nation must reduce its dependence on fossil fuels.

"I think seeing Hurricane Katrina, Hurricane Rita, instability in the Middle East and $3 or $4 gas has hopefully shocked us all to say, "Hey, we gotta do something and do it better than we have in the past," says Pawlenty.
Judi "E-85" Dutcher could not be reached for comment.

The Detroit reservation 

Wayne State University's law school has passed a new admissions policy that takes explicit racial preferences out of the criteria. However, extra consideration is to be given to those who "experience discrimination or socioeconomic disadvantage." And as Anthony Dick notes, the conventional wisdom is that any minority group experiences systemic racism and prejudice. Ergo, the rule may change very little.

I noticed in the Chronicle article that they did put in a rule that said someone who lived on an Indian reservation would be given preference. An initial writing also had given weight to being a resident of Detroit, though in its final version the residency was given less weight.

And what those dues pay for 

Less than a day after I wrote about teacher unions demanding money for their own political causes, I get an email for our own union's 2007 legislative goals. These include the usual stuff like money for wage increases, and note the list is in priority order, and the bottom of the priority is
to expand technological capacity, upgrade, secure and modernize electronic systems; expand core instructional programs and innovative programs in high demand areas, including applied doctoral programs; and fund campus based initiatives to promote access, opportunity and student success.
In other words, the union's priority is to get money for me first and to find us additional students and make our existing students more comfortable and better educated second. Swell.

But that isn't the real kicker. Here are two:
18. Support the Dream Act�legislation to allow children who have attended a Minnesota high school for three years and graduate to attend Minnesota public colleges and universities at Minnesota resident tuition rates.
So the union wants to set the price the university can charge to the children of illegal aliens.
25. To improve the professionalization of K-12 teachers and to support initiatives such as STEM, oppose alternative teacher licensure programs that are not sponsored or cosponsored by an accredited college or university teacher preparation program.
You really have to wonder what business it is of ours to improve the professionalism of some other group (that, by the way, competes for state dollars with us.) This statement makes any alternative teacher licensure -- something that, for example, put someone who majored in mathematics in a classroom teaching math if they chose, under strict supervision of the -- a hostage to the whims of colleges of education, which are in turn captured by the industry they supply with labor -- government schools and their unions.

The usual opposition to the marriage amendment and the guarantee of health benefits to homosexual couples also are on the list of 25.

Thursday, December 07, 2006

Back for more 

Good. This thing just wasn't going to work without you, Psyc. I thought you were going to make me sing for your return!

Clever could happen 

Westover strikes again. The difference is that the state doesn't live in a profit-and-loss world, just those of us who pay for the state.

Benefits of diversity 

Phi Beta Cons has several posts regarding the benefits of diversity (go to about 12:30 today -- 12/7 -- and scroll down.) Carol Iannone's point is particularly salient:
Diversity does not just mean racial and ethnic mixing. It is an ideology as well. Bringing diversity into every corner of the educational experience is the goal of the diversicrats, as Peter Wood has called them, so diversity can eat up every other educational value. Colleges spend money on vast campus-wide diversity "audits." The study of diversity, group differences, group inequalities, and the need for "social justice" (i.e. group equality), and so on become central, and multicultural and diversity courses have taken over many departments, addressing issues in a non-scholarly, ideological way. There also have to be sensitivity workshops, "difficult dialogues," and the like, conducted by students and consultants especially trained for this work. There are multicultural administrators and offices of multicultural affairs. One diversity manual recommends making sure that each group pursuing a project in a math class is racially and ethnically diverse. All of this takes away from the focus on education itself, on the transmission of knowledge, the study of the best that has been thought and said, the search for truth, and all those things that used to constitute an education.
But there's something more, I think, which is that the beneficiaries of diversity, to the extent there are any, are the majority group, not the minority. (Indeed, Rosenberg says in a recent post, it might harm them.)

I could fit right in 

I grew up in Manchester, New Hampshire, on the south side of town surrounded by many French-Canadian descendants for whom French was the language of the dinner table*. My mother is half-Quebecois, half-Yankee, but speaks no French at all, and neither did her mother (my own French was learned in a public school and is badly out of practice). Quebeckers, as we called them, just cuss funny, as Tuesday's Washington Post points out. My father would laugh at each "crisse" that would come from the neighbors' mouths. My favorite was "il crisse de mateau", or "he Christ the hammer". (Two of my three French-Canadian neighbors had fathers in construction, so maybe that's why.) I guess that is less common that using parts of the Catholic church in cussing, something the church is trying to stop. Having drunk many times at the Cercle National Club -- closest club to my alma mater -- I think it safe to say that cure won't take in Manchester.

So, much like people say "arrrrgh" to talk like a pirate, you can just say "crisse" and talk like a Quebecker.

h/t: Craig Newmark. Yeah, Craig, I did know this already.

*--The west side of the city was always known as Little Canada, so when I came to Minnesota and found there was a suburb with that name I thought I had found home. But of course Little Canada is related to Anglophone Canada, not Francophone.

Check me off 

In the early years of this blog -- when there were multiple bloggers of St. Cloud State here -- one issue we repeatedly discussed was the status of so-called "fair share union members." This euphemism referred to faculty in the MnSCU seven universities who were not full members of the union, but paid their "fair share" of 85% of union dues for the benefits they receive from collective bargaining. This comes to more than $500 per year. But to vote on any isse beyond one's own department, you had to be a full-share member. The additional amount is able to be used for union activities besides those directly connected to collective bargaining, and a big part of that money goes to political activity.

It sounds bad, and it is ... but it could be worse.

Today's Wall Street Journal carries a (free) article by Stephen Moore describing a similar situation in Washington state. There, voters passed an initiative that required teachers unions to get written approval from their members "before using dues to support campaigns or candidates." That initiative was in place for almost 14 years before, last spring, the state's Supreme Court ruled the law unconstitutional on First Amendment grounds. Moore does an excellent job in dissecting the merits of the case, and finds it isn't a close call.

If I understand the article and law correctly, the teachers unions in Washington do not allow someone to be a fair-share member. They instead collect dues from everyone and then require those who don't want to support the union's political agenda to opt out.
The Washington law states unambiguously that a union may not use dues "for political purposes without the affirmative consent of the nonmembers from whom the excess fees were taken." The Washington Supreme Court somehow twisted these words to mean that the unions can spend as they wish unless workers object and affirmatively opt out. That's a big distinction, because the unions make it as time-consuming and cumbersome as possible to get the money back once they snatch it.

The Supreme Court also has an opportunity to define what the First Amendment "right of association" means. What it ought to mean is that both parties voluntarily agree to associate and that Americans have a constitutional right to not associate. The unions are arguing for the right to collect dues coercively from every instructor who stands up in front of a public school classroom.
It is only in comparison to that that the MnSCU situation looks better. Here you have to make a positive step to join the union as a full-share member. However, the rules of the union do not allow one to resign from it except for three months of the year (two of which is when we are away from campus), and requires you to sign a second letter. The union, quite naturally, does not make it easy to get this information.

Moore concludes that "The Supreme Court can now ensure that the First Amendment means that every teacher's voice must be heard--whether they are in a union or not." It might even help fair-share members at SCSU be heard on their own campus.

Wednesday, December 06, 2006

This sucks 

Let me join the chorus of bloggers discouraged that Leo's checking out.
As of the past month and a half, I have been receiving hatemail and threats from a lefty troll, up to, and including threatening my livelihood. This person portrays himself to be a military ground intelligence officer; but that's all I'll say for now.

As of this point, I am looking into legal action against this person, should he pursue his threats.

I got into blogging because it was fun; I enjoyed being up on things; it was a creative outlet, and I have met some wonderful people.

But when you get someone who lives an otherwise joyless existence, whose only raison d' etre is to make your existence a living hell, the fun is gone, and it's time to hang it up.

I may be back; then again I may not. I guess it just comes down lately to having better things to do with my time.
There are lots of things I can do with my time besides blogging. It nevertheless is what I do because it becomes part of the routine and the readers part of my life, even those who use the comment box to point out my inadequacies (in fact, especially them.)

Nobody threatens me yet. Tenure is a marvelous device for ignoring the jerks in our midst. Idiots can send copies of my posts to the university any time they want. Chances are 1) they have already been read, and 2) the university quite reasonably understands freedom of speech on a private site. And send them to a newspaper, did you? Well, they are a little hard up for letters to the editor. If your letters had any merit, they'd be up already.

Gary asks that Leo remain in SCBA and MOB. I have no control over the latter, though I will be happy to plead his case to those that do. Over the former I do have some authority, and I am in full agreement that the man stays aboard.

As to the troll, I think we have our best man on the case.

I heart Larry Summers 

Indefatigable, he decided to speak again on women in the sciences.
An audience member asked the panel about what universities should do to help women in the sciences avoid glass ceilings in their careers. All eyes swung to Mr. Summers.

Immediately grabbing a microphone, he said, �Maybe I should say something about that.� The audience roared with laughter.

�Larry, maybe you shouldn�t,� quipped one of the other panel members.

�Let�s say I�ve had an opportunity to be educated on the topic,� he shot back, smiling.

Mr. Summers said that how women and men can develop careers while raising children is �a profoundly important question� for organizations of all types and �a question that bears with particular force on the careers of women.� Echoing recent studies of the issue, he spoke of allowing flexible work arrangements to help scientists juggle those responsibilities.
There are few jobs with more flexibility than a university professor.

The panel, part of the Hamilton project at Brookings, discussed a paper in which strategies were offered to increase the number of scientists engaged in R&D to promote economic growth. The paper is quite interesting.

You don't say! 

Report Finds Rampant Censorship at American Colleges and Universities:
The report�s findings include:
  • Public colleges and universities are disregarding their constitutional obligations. More than 73% of public universities surveyed maintain unconstitutional speech codes, despite numerous federal court decisions striking down similar or identical policies.
  • Most private colleges and universities promise free speech, but usually do not deliver. Unlike public universities, private universities are not legally bound by the First Amendment. However, most of them explicitly promise free speech rights to their students and faculty. For example, Boston University promises �the right to teach and to learn in an atmosphere of unfettered free inquiry and exposition.� Unfortunately, it also prohibits speech that would be constitutionally protected in society at large, such as �annoying� electronic communications and expressions of opinion that do not �show respect for the aesthetic, social, moral, and religious feelings of others.�
Macalester College gets special mention for banning �speech that makes use of inappropriate words or non-verbals.� Here's their student handbook and a write-up that FIRE did of their code in July. SCSU isn't much better, limiting public squares to specific areas of campus. FIRE has collected information on us from our own webpages.

Taxing questions 

I was invited to the release of a report that was to show the effects of building new housing in the St. Cloud area. The teaser in this release was the sentence:
The housing industry not only pays for itself, its economic impact results in new income and jobs and additional revenue for local governments.
That's not what you usually hear. You hear instead that many residential developments create net burdens on local government. So local impact fees have been used to charge up front for the cost of adding one more household to the family. According to a Brookings Institute study, "property taxes fail to cover the full cost of the infrastructure" that a new household demands. That certainly sounds possible to me.

So to my shock I learn that this report estimated that the cost of all the impact fees and expenditures on the home that the cities of St. Cloud, Sauk Rapids and Sartell demand builders put into new homes was estimated to equal almost $32,000 per home built (new houses here average about $195,000; the raw land cost per home is less than $12,000.) Wow, I think. Is it that expensive to support a new family to the St. Cloud area? It turns out the study handles this as well, and the calculation comes to about $17,000, based on a cost estimate done by the National Association of Home Builders. (I have seen the study -- it's not available online and not public, so all I can do is characterize it as looking like what a reasonable economist would do to estimate the cost of providing public goods. More than that I cannot vouch.) When all fees and taxes collected are added up, the net gain to the city is almost $20,000 in the first year, plus a continuing net revenue gain to the city of more than $1000 per year thereafter.

Many area officials were in the audience with me, and I must credit them for being civil in their criticism, but there was no doubt the number gave them indigestion. Questions were asked, and in the conversation it came out that the number derived from actual agreements between the cities and the developers, details of which were given to the researchers. From the Times' report:

St. Cloud planning director Matt Glaesman said the $31,800 in fees Eisenberg's study suggested local governments are charging for each new home sounded too high. He and other officials have asked the economist to explain how he calculated that number.

"We really didn't have enough information to make a judgment either way," Glaesman said.

Sauk Rapids finance director Jack Kahlhamer said Eisenberg's study includes infrastructure costs, such as sidewalks and storm sewers. But in Sauk Rapids, developers pay those costs themselves, Kahlhamer said. The city doesn't pay or collect fees for those expenses.

While Kahlhamer doesn't doubt homebuilding has a positive impact on the economy, he questions who's receiving the benefit. If new homeowners spend money at a restaurant, that doesn't help the city pay for a new water treatment plant, he said.

"I just see revenues being exaggerated, but I don't see the expenditures there," Kahlhamer said.

Having seen the study, what I found was a calculation for different cities of the relationship between homes built and expenditures on local capital and current expenses. What significantly drives down the cost local government pays are the transfers from the state budget for education (assumed to be 85% in the analysis) and LGA (which, while down, still covers more than 60% of local government administration.)

A flaw in Kahlhamer's statement is that a substantial part of what adds to costs are not payments to government but required expenses to meet codes in the cities. One example: Any building over 8000 square feet must have water sprinklers. There are therefore many condo buildings kept smaller at, say, 7985 square feet. The study appears to have captured those mandated expenses; cities wish to ignore them. There is an additional benefit to the homeowner, the city official will certainly say, but the economist responds by saying the sprinklers could be purchased by the homeowner if the benefit to the homeowner exceeds the cost. If you're trying to hold down the cost of firefighting, simply ask the homeowner to pay a fee per call to the fire department.

I think it's quaint to believe that the cities charge only what they need to develop land. Undeveloped land is a tax source for them: they have a monopoly on platting and permitting for home development, so they will charge a price that allows them to capture a good deal of the profit of development. It is far less costly to city officials -- particularly around election time -- to raise impact fees than taxes on current residents. But monopoly pricing will push up the cost of housing and reduce the number of units produced. (And this while the cities still suck up to the affordable housing lobby.) And, just as I predicted years ago, the building is being pushed further and further out into the countryside. Building boomlets are happening north of St. Cloud in places like Rice now, where fees are much lower ... for now.

Tuesday, December 05, 2006

Controlling the time you sell 

I didn't come to the office today until 12:30. I attended a talk on housing this AM, visited some local leaders, and for an hour just worked from my Panera away from home. It's one of the great attractions of worklife in academia -- to be in charge of your own schedule.

Increasingly, companies are catching on that workers value flexible schedules enough to perhaps trade salary away for it. Best Buy appears to be one example.
The official policy for this post-face-time, location-agnostic way of working is that people are free to work wherever they want, whenever they want, as long as they get their work done. "This is like TiVo for your work," says the program's co-founder, Jody Thompson. By the end of 2007, all 4,000 staffers working at corporate will be on ROWE [Results-Oriented Work Environment]. Starting in February, the new work environment will become an official part of Best Buy's recruiting pitch as well as its orientation for new hires. And the company plans to take its clockless campaign to its stores � a high-stakes challenge that no company has tried before in a retail environment.
It's an example of listening to your employees -- this was not a planned change at BBY -- but adopted because it works to help the company's bottom line:
It seems to be working. Since the program's implementation, average voluntary turnover has fallen drastically, CultureRx says. Meanwhile, Best Buy notes that productivity is up an average 35% in departments that have switched to ROWE. Employee engagement, which measures employee satisfaction and is often a barometer for retention, is way up too, according to the Gallup Organization, which audits corporate cultures.
One of my happy experiments this fall has been taking subgroups out to meet off campus. I don't think we do that enough, and the change in environment is energizing for many people who do this. And we've increasingly turned one room in our suite into an informal meeting space and today someone put in an espresso maker. (All paid for by ourselves, not state dollars!) All to avoid this place ever feeling like an office. There's surprisingly little of this in academia compared to outside the ivory tower.

(h/t: reader jw)

Something to tide you over 

I'm working on something longer about development fees for housing, and fighting off the beginnings of a cold. So more maybe later today, but in the meantime be sure to see these two items elsewhere:
  1. University of North Dakota President Charles Kupchella's letter to the president of Dartmouth, after someone in the latter's athletics department apologized for scheduling to play the former's hockey team which wears the "Fighting Sioux" team name and emblem. (Saw someone wearing the warmup jacket take communion at a Lutheran church in front of me Sunday -- I confess to a slightly larger smile as I received the host.) Dartmouth's president has responded.
  2. A description of lunch between David Horowitz and Michael Berube. I've dined with Horowitz, and I think it quite possible he waved bread at that meal too. So?
Hat tip for both to Phi Beta Cons.

Monday, December 04, 2006

Extortion and exhortation 

At one point not too long ago, say ten years before now, the Competitive Enterprise Institute was a very small group of free-market policy analysts. Even now they have advertise only twenty policy experts. Yet the Wall Street Journal points out today that this group is sufficiently armed against "the Pew Charitable Trusts, the Sierra Club, Environmental Defense, the U.N. and EU, Hollywood, Al Gore, and every politically correct journalist in the country" that two Senators are extorting one of their large financial backers to stop funding them.
The letter is of a piece with what has become a campaign of intimidation against any global warming dissent. Not only is everyone supposed to concede that the planet has been warming--as it has--but we are all supposed to salute and agree that human beings are the definitive cause, that the magnitude of the warming will be disastrous and its effects catastrophic, that such problems as AIDS and poverty are less urgent, and that economic planners must therefore impose vast new regulatory burdens on everyone around the world. Exxon is being targeted in this letter and other ways because it is one of the few companies that still thinks some debate on these questions is valuable.
The local paper thinks enough of the issue to exhort its readers to see Al Gore's movie. They end their editorial by asking:

You'll learn how much you contribute to pollution along with ways to contribute less.

So even if you don't buy into global warming, who wouldn't want to do that?

Why do I think what you won't learn is the cost of 'contributing less' to pollution? I often use this piece of the Armchair Economist by Steven Landsburg to make the point:

But in the 25 years since the first Earth Day, a new and ugly element has emerged in the form of one side's conviction that its preferences are Right and the other side's are Wrong. The science of economics shuns such moral posturing; the religion of environmentalism embraces it.

Economics forces us to confront a fundamental symmetry. The conflict arises because each side wants to allocate the same resource in a different way. Jack wants his woodland at the expense of Jill's parking space and Jill wants her parking space at the expense of Jack's woodland. That formulation is morally neutral and should serve as a warning against assigning exalted moral status to either Jack or Jill.

I have no problem with exhortations by an editorial -- that is in fact what they are supposed to do -- but it is also up to us in economics to point out the value judgments made in their arguments, such as we have less of a right to live than our grandchildren.

Al Gore the private citizen can make a movie, give away copies and exhort all he wants; he should be complimented for the effort and dedication. But the two senators are using the jackboot to stop the opposite viewpoint from finding the same space in the public arena of ideas. Does that make sense to anyone?

Thanks and no thanks 

Two weird health stories this weekend. First, because claims were down this year, the state employees' health care plan is forgoing collecting premiums this week. This will save me about $40, thank you very much! The article says we are doing better preventative care. I was reading a conversation between some other health care professionals the other day and something was said I found fascinating: Why do preventative care of some kinds if you don't get the benefits of it? The case was for prostate cancer. Most men who experience it do so in their early 60s, close to the time when they would qualify for Medicare. So why would a HMO or other medical care provider do the preventative stuff or test for prostate cancer early, when the benefits of early testing are to prevent Medicare from paying for more expensive treatment later? But state jobs tend to be held for longer periods, so preventative medical care makes more sense for Minnesota Advantage.

Turns out that this benefit only goes to those who pay premiums for dependents -- if you're a single person your premiums are 100% paid by the state already, so you get no "premium holiday."

Second, you heard that the big bad WalMart wants to make you buy your drugs for $4? Those meanies! You should pay $9!
Minnesota's statute was one of many written during the Depression to protect small retailers against competition from large chain stores, said William L. Sippel, a lawyer with Oppenheimer Wolff & Donnelly in Minneapolis. Modern courts would look at whether a retailer's low prices could drive competitors out of business and enable the retailer to recoup losses later with higher prices, Sippel said.

Tim Gallagher, president-elect of the Minnesota Pharmacists Association, said small drug stores need such a shield to prevent them from being driven out of rural areas -- something he said would hurt competition in the long run.
What's stranger: That the law is written to help pharmacists at the expense of consumers in the 1930s -- while now being paid by health insurance in some cases, most people will have this amount fall in their co-pays -- or that the money WalMart and Target are forced to take in higher prices will not go to these small pharmacists? Imagine the following: You go to Target with your prescription and they charge you $4 for the drug plus a $5 tax to be paid to the pharmacist in North Soytown. Would you scream injustice? Now suppose you go to Target with your prescription and they charge you $9, going all to them. Who do you scream at now? The only reason they never do the first is because you would complain -- if you wouldn't, they would gladly have the money go to the local pharmacist rather than Arkansas-based WalMart.

Demand for Yankee tickets 

As Mark Yost said while sending this article to me, "another reason to hate the Yankees":
Yankee Stadium's best seats will sell for $150 next season - a $40 hike from last year, the team said yesterday.

Fans, reeling from six years without a World Series win, gave the new prices a resounding Bronx cheer - saying only the millionaire players on the team's $200 million payroll could afford those prices.

"Wow, that's a steep increase," said Joe Bastone, 48, owner of the Yankee Tavern. "It's really getting tough."

The most expensive seats, costing between $115 and $150, are in the first four rows in the areas nearest to home plate and are sold as part of season-ticket plans.

In the unlikely event any of those seats are available for sale for individual games, they would be priced at $300 in advance and $400 on days of games.
Now I find it interesting that on that same page there was (when I clicked, at least) an ad for tickets to A Chorus Line on Broadway. Tickets? $86.25 and $111.25, with premium seats beginning at $201.25 (I think the $1.25 is a service charge.) If you want to go see the Yankees, you could pay a LOT less:
Box seats without waiter service will now cost fans from $35 to $73 when sold as part of full season-ticket plans, $37 to $78 as part of partial season-ticket plans, $40 to $83 when sold for individual games in advance and $42 to $88 on days of games.

Reserved seats run from $17 to $56 for full-season tickets, $18 to $61 for partial season tickets, $19 to $66 for advance purchase for individual games and $20 to $71 on days of games. Bleacher seats are $10 as part of season tickets, $12 when sold separately.

The prices for 44% of the park, more than 24,000 seats in the upper deck and bleachers, will be unchanged for the third straight year.
For my fellow Red Sox fans, compare. Prices were held the same as last year except for the premium seats (more than 80% of tickets saw no change in prices.)

Meanwhile the joys of Minnesota include $36 premium seats last year. The new ballpark will include opportunities to price in the way the Yankees and Red Sox do now.

Saturday, December 02, 2006

US Military Exceptionalism 

In the last two months, US Rep. Charles Rangle (D-NY) and Sen. John Kerry (D-MA) have made negative remarks about the education and job prospects of those who enlist in our military forces. They are factually wrong. A recent study by The Heritage Foundation shows that our military is better educated and has better job prospects than the average American.

Moreover, there is another trait exhibited by ex-military people that gets very little attention: an exceptional talent for business management.

Korn/Ferry International, the world's premier provider of executive human capital, conducted a substantial study that revealed a very positive link between military service and success at the executive level in corporate America.

What did they find?

59 companies (11.8%) of the S & P 500 were headed by CEOs with military experience. This percentage is quite high since our active and reserve military comprise only about 1% of the US population. CEOs with military experience tend to last longer in the job (7.2 years vs 4.6). Having spent decades in corporate America, primarily as a sales representative and IBM marketing manager (large systems and telecommunications), I can attest to the positive effect that stability at the top provides.

These companies had a much larger average annual shareholder return higher than the S & P 500 index for three measurement periods ending Sept. 2005:

Time Period...Military CEO...S & P 500

3 years.................21.3%...........11.0%
5 years..................9.5%..........(10.7%)
10 years...............12.2%............9.4%

Why would these former military people out perform the so-called elite educated gurus? Military people:

1 - Lead from the front
2 - Communicate clearly and succinctly
3 - Know how to delegate tasks (in other words, don't micro-manage)
4 - Trust people to do their jobs, hold them accountable
5 - Truly accept responsibility for their own actions

Their experience managing stressful situations during military operations transfers to an ability to manage stressful corporate environments. It is apparent their training in acting and doing versus reading and philosophising results in better returns for everyone.

Friday, December 01, 2006

Dogblog of the week #1 

From last spring. Bostons by and large are able to chew up anything you give them, no matter how mini your BT is. Buttercup seldom has a chewtoy more than a day or two. If my students could only show the determination this dog does, they'd pass every test with an 'A'.

Buttercup says keep reading below; she's staying up here for the rest of the day.

Quote of the day 

Sums up my view exactly:
On average, I like college students more than university administrators. True, college students are often immature, overly hedonistic, and abysmally ignorant of many of the fundamental events, persons, and concepts of Western civilization. But they are mostly sincere, usually honest, and generally mean well. That is as true today as when I began teaching back in the days of Socrates (actually, a couple dozen centuries thereafter).
--Richard Vedder.

Maybe why I never will be a dean (or at least one of the reasons, though probably not the deciding one.)

Lower division writing requirement 

Stephen has a snow day -- just cold here, no snow yet -- and directs me to Arnold Kling's lament over student writing. How many times have you heard this one before?
My recollection from my career in government and business is that written communication skills still matter. Out of over 100 students in my class at George Mason, no more than a handful could function in any capacity in a job that required writing a memorandum. Over half of the students are utterly incompetent when it comes to grammar and syntax. They have no ability to communicate complex ideas. Yet I do not fail these students. I feel that I must reserve my F's for the students who do not turn in papers at all.
Our university adopted years ago an upper division writing requirement for all students, which went into effect last year. For most students this comes in a senior 'capstone' course. So students write in other classes, but are expected somehow to learn to write by the time they are seniors enough to complete a "writing intensive course" (the university's words, and please don't ask me to explain what they mean.)

Since this seems to be my day for goofy ideas, let me put forward another one: How about a qualifying exam for students at the end of their sophomore years to test grammar and syntax? Students unable to pass the test may register for their junior year but must take a no-credit remedial course in writing and retake the test the next semester. Those who do not pass are dropped from the university.

Many students take six years or more to complete their degrees. Many of them took their required English course in their first year. Just as students who fall out of practice with their algebra or calculus or statistics might lose some sharpness of their quantitative skills, so too might students who don't write much lose their ability to understand grammar and syntax. Expecting it to be revived in a class in their last semester, at the same time that they are writing (horrific) cover letters to potential employers saying they are graduating from our school. These leave a bad impression of both the student and the school when written poorly. If we want to make the writing requirement more than just a hoop to jump through, we should invest more in the effort.

You may call me nuts, but... 

...I got to thinking about the Division I concept for SCSU. The university's athletic department throws around numbers on the move as in the area of $4 million (I've never heard more, I used to hear more like $3.5mm. Since they count scholarships in the number I view the actual, marginal opportunity cost figure to be less than that. That'll be a separate post some day.) The biggest reason boosters give for making this move is to increase the visibility of the university. Fair enough, though I ask can we get more visibility than D-I gives for our $4 million, or the same visibility for less?

And then, while reading a story on the New York Mets getting $400 million for naming their new ballpark Citi Field (h/t: Newmark's Door) it hits me. There's a slide show of the ten highest-dollar naming rights deals. Number 6 on the list?

University of Phoenix Stadium, home of the Arizona Cardinals. 20 years for $154 million. Not only does UoP not play there, they don't even have a football team. (Funny thing about those for-profit institutions there.)

Now, we have a team in search of a new home. And we have a willingness of our alumni to have increased visitbility for SCSU. And we have a new home that may need a name. So a guy gets to thinking, ...

Zygi, have your people call my people. Let's do lunch, babe.

Hamilton under the radar 

The story that the Alexander Hamilton Center project at Hamilton College is on hold of course saddens most lovers of freedom and capitalism. It is of course troubling that any place where the study of free institutions is labeled as right-wing should also bear the name of Hamilton himself. For those unfamiliar, a group of alumni interested in reforming Hamilton have provided a timeline here. It includes the abrogation of an agreement in place that facilitated a $3.6 million gift for the Center's creation. The alumni group observes: "Children call this kind of buffoonery a �do-over�. Institutions and adults call it bad faith. It is the stuff of incompetence and failed credibility."

We have engaged in the past political season in a debate whether journalists can ever hold their biases in abeyance in reporting the news. (cf. Eric Black.) In some sense, that debate needs to extend to academia. We are told to present both sides, but who among us wouldn't say, as erstwhile AHC founder Robert Paquette did, that �there are some explanations that are more powerful than others�? I continue to hold to the belief that both right- and left-wing centers should be created with recognition that the center's founding -- indeed, the founding of many colleges -- may start with a premise that some explanations are more powerful. Cf. any school founded by a religious organization.

The problems that arise in these debates aren't in asking the questions. It's in the failure of the debaters to recognize the rules of the debate, to agree to evidentiary standards and the rule of reason.

I might add a small disagreement with NAS president Steve Balch, who says that a lesson from this fiasco is that larger institutions will be easier places to hosts centers for the study of free institutions, something NAS has been pushing for a few years now. I don't think smaller institutions are necessarily barriers to entry for these centers; niches for creation of new centers can be stifled at larger schools or encouraged at smaller schools, depending both on the commitment to new ideas and the structure of faculty governance. The dean's behavior at Hamilton is simply craven, in reneging on a deal. The faculty senate's resolution could have been met with a statement that "we encourage all avenues of academic inquiry." The radar of the entrenched academic left is too sensitive on any campus to let the creation of a center go unnoticed. It requires administrators with a commitment to free inquiry to say no when faculty senates pass their silly resolutions to limit inquiry. (And those silly resolutions are why sometimes we in fact do work the ref.)