Wednesday, January 31, 2007
TLPT
Guess again.
A colleague wrote to Twin Cities Liberal Public Television to see when the show would be put on. The response:
Thanks for contacting member supported tpt, we appreciate hearing from you. We do not have an air date yet, but it will run, most likely in April. We will send an email when it comes into our schedule.
Oh, well, that's better. What did they run instead?
On TPT 2Well, you know that stuff was really time critical. Much more important than Friedman. Can't wait to see Shadya 2.
The American Experience
“The Nuremberg Trial.” A gripping study of the groundbreaking prosecution, which began Nov. 20, 1945, as Nazi Germany's leaders were held accountable for war crimes, infamously blamed on “following orders.”
And on TPT 17?
Independent Lens
Roy Westler's film “Shadya” profiles 2003 shotokan-karate world champion Shadya Zoabi, a young Muslim woman living in Israel. Included: how Zoabi balances her karate dreams with societal pressures regarding how Muslim women are expected to live.
Limiting thoroughbred supply
The Jockey Club has never allowed artificial insemination, or AI. Vials of frozen sperm are easier to transport and dilute and can impregnate more mares than live cover [i.e., intercourse --kb], so AI could produce a glut of thoroughbreds born from popular studs and mares. Some breeders believe this could result in the overproliferation of offspring from particularly desirable studs, and limit genetic diversity. If too much of a thoroughbred's sperm were available, it would be less rare, and perhaps less valuable. (It was estimated that Barbaro, who was 4 years old when he died, could have commanded $1 million a year had he recovered enough to mate. His virility was so valuable that his owners had it insured.)The article has more facts about horsebreeding than most of us want to know. But it's pretty clear that this is an attempt to control supply and drive up prices for the most desirable studs.
Mild surprise
The trade and housing parts of this should not come as a surprise. The most important number, to me, is the PCE inflation is below 2%; this is likely to keep the Fed from reacting to consumer spending in any way. Interest rates should hold steady.
UPDATE: ... and so far, they have.
The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent.
Recent indicators have suggested somewhat firmer economic growth, and some tentative signs of stabilization have appeared in the housing market. Overall, the economy seems likely to expand at a moderate pace over coming quarters.
Readings on core inflation have improved modestly in recent months, and inflation pressures seem likely to moderate over time. However, the high level of resource utilization has the potential to sustain inflation pressures.
The Committee judges that some inflation risks remain. The extent and timing of any additional firming that may be needed to address these risks will depend on the evolution of the outlook for both inflation and economic growth, as implied by incoming information.
It's worth remembering that this month the membership of the FOMC changed with new Fed presidents replacing old ones (four seats rotate annually.) The Richmond Fed president Jeffrey Lacker has rotated off the committee; he had voted to tighten interest rates at the last few meetings.
Because they are looking out for you
I am still partial to bison grass vodka.
Tuesday, January 30, 2007
The way to control prices is to increase demand?
Raising spending for the Pell program and for scientific research was among the top budget priorities announced by Democrats during and since their successful campaign last fall to take control of Congress. The Democrats said the federal government should increase aid to college students to help them cope with rising tuitions.This is why we teach economics, to tell journalists like this one that it just ain't so.
Substituting grants for loans increased the likelihood of a low-income student actually starting college at the school by only 3 percentage points, and this number is not statistically significant. In the case of low-income minority students, the likelihood of entering this institution grew between 8 and 10 percentage points, with statistical significance at the 10 percent level.
Another new book to read
The review makes clear that Kornai is no conservative -- he is said to have respected Marx as an economist -- but there is little doubt he understood the perils of transition from socialism.
At one point in 1974, under the more relaxed rule of János Kádár, when Hungary was the "most cheerful barrack in the camp," Mr. Kornai and his wife decided to build their own home. Over the course of several months, they personally confronted the corruption, endemic shortages and shoddy construction materials that were so common in Eastern Europe. A year later, on a trip to India, Mr. Kornai was faced by idealistic young Maoists whose concern for the desperately poor reinforced their support for socialism. Mr. Kornai responded to them by arguing, as he puts it here, that "rationing systems that spread misery equally may assuage feelings of injustice for a while, but they will not solve anything."
"It's business, not personal"
[W]hen a student challenges a professor, it's business, not personal. Part of personal development is learning where the limits are and whether or not they are credible. One simply has to learn to say "no" very pleasantly and stick to it. (I don't get paid to prepare my notes, I don't even get paid to check the marginal conditions in my research. I get paid to say no and to enforce standards.)I have many young faculty now, with the department shepherding its Vietnam-era faculty into retirement. Some are good at saying "no", and a subset of them can do it pleasantly. Sadly, I have to "mentor" the ones that don't come off as pleasant, as the rest of Stephen's post explains.
Marginal or inframarginal?
The JOBZ program, launched in 2004, has given qualifying firms exemptions from sales, income and property taxes for up to 12 years. Of the nearly 300 firms getting the tax breaks, 13 moved to Minnesota from other places, according to the state. The bulk of the firms in the program expanded existing operations in Minnesota or relocated from a taxed zone to a tax-free one.Some of the debate over JOBZ has been over the wages paid by these firms, but that's not the real issue. If you agree to take a job at the wage offered, you've revealed that the money earned on that job is worth more to you than what you could earn elsewhere, and worth more than if you were at leisure. The wage requirements in JOBZ are an attempt to make the jobs created worth the amount of tax breaks paid. (For example, there's got to be a very big wage differential over existing jobs for the $336,000 per job subsidy John Palmer reports on an electric plant in Quebec.)
An analyst from the Department of Revenue said this month that the exemptions could cost state and local governments more than $100 million through 2015.
The state says businesses that entered the program since 2004 have committed to creating 4,236 jobs and retaining 9,131 in outstate Minnesota.
But some who have scrutinized the program wonder how many jobs have been created and how much credit the program deserves.
"There is really no way at this point to figure out if these jobs would have taken place in the absence of the program," said Laura Kalambokidis, a University of Minnesota economist who has been studying JOBZ.
What's more important is whether the tax breaks actually increase jobs. One local economic development official refers to JOBZ in this story as "the extra dollop or two of whipped cream on top of the pudding." The question is whether the extra dollop of whipped cream induces more pudding to be consumed -- is the JOBZ money changing the marginal cost of hiring another worker? If it is, then you have the question of elasticity, or "how much does a $1 property tax break lead to hiring of an additional worker?" (Attention students: Seminar topic.) John's comment on the long-run Phillips curve, as he acknowledges, doesn't apply if you've changed the marginal revenue produced by a unit of labor. But if JOBZ is just a transfer to the capital owner without any change in labor's marginal value, then there would be theoretically no effect on the amount of labor hired. Moreover, if there is an effect that causes JOBZ-favored firms to increase wages then all wages go up, even at the firms not gifted by JOBZ, as good workers are bid away to the place where their marginal revenue product is higher.
Worth a read: Prof. Kalambokidis' 2003 summary of the effects of enterprise zones. She's a skeptic; I don't agree with every point she makes, but on balance I share her skepticism. See also this MN House research report from 2005.
Monday, January 29, 2007
Repaying the sugar
An e-mail from the team late Thursday offered each lawmaker the chance to purchase a pair of tickets at the face value of $600 apiece.Scalping is legal in Indiana, but let's be real: A politician that took the tickets as a gift from the team -- gift insofar as the face price on the ticket is below its equilibrium price -- and converted that gift to cash would be roasted. (Although giving them to someone, having them turn it to cash might be palatable. Whether that sugar comes back to the legislator or not is hard to say.)
"I can't spend that kind of money," said state Rep. Vernon Smith, D-Gary. "It's not only (the ticket price). It's what the hotels are going to cost down there and flights. I know making a flight this late is going to be high. I can't do that."
Smith said his nephew, a coach at Westside High in Gary, expressed interest in the tickets, but the e-mail from the Colts said lawmakers must use the tickets themselves.
State Rep. Bob Kuzman, D-Crown Point, said he already had bought his own ticket to the game but might use the team's offer to score a seat for his wife or his father.
So why give the tickets to the pols? Here's why. And bet your bottom dollar that if the Twins make the World Series in the next five years, this dude isn't paying for his ducats.
No SchillingvKerryPariahBoy.com, just beat the Yankees

Boston Red Sox pitcher Curt Schilling has announced he would rather pitch than face Sen. John Kerry for U.S. Senate in Massachusetts in 2008 which has been widely rumored after an appearance on a local radio station.
The right-handed ace, who last week had been rumored to be a U.S. Senate candidate in Massachusetts in '08, announced Monday morning on Boston-based WEEI-AM that he plans on pitching that year.I'm not posting this as a Republican but as a Red Sox fan. Forget Kerry, G38, and keep pitching for Boston. Let's focus on the real pariah.
"My wife and kids want me to continue to play, which was the only reason I was retiring in the first place ... they talked me into it and I felt it was a decision that I wanted to make to continue to play, so [2007] will not be my last season," Schilling told the sports-radio station. "I was convinced and my family was abiding by that decision [to retire], and they talked me out of it, so I will be playing in 2008."
Mr. Taranto should try university campuses
Sgt. Jason Hess, who's stationed in Iraq, wrote to a company called Discount-Mats.com, and asked, Can you send a delivery to a military address? He got a reply saying, no, they're not able to do that, quote, "and even if we did, we would never ship to Iraq. If you were sensible, you and your troops would pull out of Iraq." He's sending this to a sergeant in the Army. Well, this started getting circulated on the Internet. Talk radio show hosts were talking about it. It caused an outrage. The company claims that it's fired this employee.James Taranto, on the Journale Editorial Report over the weekend. He should come to SCSU, where for example a student can dress in drag to win Homecoming Queen but it's irresponsible for this blog to talk about it. Or a faculty member can come in physical contact with a student while arguing over a display in the student union, but it's irresponsible for us to talk about it. I'd provide links for those stories, but that would be, um, irresponsible.But my favorite comment as a result of this comes from a peace activist named Julie Enslow, who is quoted in the Milwaukee Journal Sentinel as follows: "This is a matter of free speech," she says. "It is totally irresponsible for radio stations and bloggers to attack a person for his personal political views."
So free speech means if you agree with her, you can mouth off on company time. If not, you can't say it in a public forum.
No podium is worse than one-sided podium
Duquesne President Charles Dougherty's decision, based on a new university policy and concerns about partisanship and Catholic Church teachings, has sparked debate on campus and led to circulation of a petition in the law school by students unhappy with it.It has offered these and other politicians other venues for their views, but has done so in places where they can invite opposing viewpoints.
...In a letter this week to deans and other leaders on the campus, explaining his decision, Dr. Dougherty cited a policy enacted in June under which Duquesne generally avoids politicians at graduation ceremonies.
"I had two reasons for disapproving the politicians," Dr. Dougherty wrote. "First, I believe that a high-profile partisan political figure is inappropriate for a commencement speaker.
"Anyone of that description, including all three proposed, is sure to offend large numbers in the audience," he said.
"Even if such a speaker steers clear of political content, it makes a political statement that we provided them an occasion and a platform -- and one in which there is no possibility for dialogue or the expression of alternative points of view."
Dr. Dougherty also cited "the likelihood that some or all of these politicians have taken public positions on issues in opposition to Catholic Church teachings."
A private religious school of course has the right to decide who can and can't speak on its campus. It's inimical to its mission, however, as a campus that has a mission of
serving students – through commitment to excellence in liberal and professional education, through profound concern for moral and spiritual values, through the maintenance of an ecumenical atmosphere open to diversity, and through service to the Church, the community, the nation, and the world.How can it maintain an ecumencial atmosphere open to diversity when it fears having commencement speakers that might offend someone?
Friday, January 26, 2007
The 3 Es: Environment, Economics, Education
Mr. Gore is traveling around the world to tell us how we (he, too?) must change our civilization b/c of global warming. He was in Denmark last week. The main Danish newspaper, Jyllands-Posten, requested and got confirmed that Mr. Gore would have an interview with Bjorn Lomborg, author of "The Skeptical Environmentalist". The interview had been scheduled for months. Guess who was a "no show"? Not only did Mr. Gore try to change the terms of the interview 24 hours before the meeting was to occur, he backed out totally at the last minute. Wonder why?
Mr. Lomborg took his share of criticism for his book - criticism that was never proved. However, he has been critical of Mr. Gore's claims and can substantiate his views. Does Mr. Gore dislike it when someone disagrees with him and his agenda? We don't know but there is substantial accurate information that contradicts Mr. Gore's mantra:
1 - The U.N. CLimate Panel suggests that if we follow Al Gore's path, the average person will be left 30% poorer. (Note, this is a UN study - that organization the left loves to quote - except when it doesn't agree with them.)
2 - Mr. Gore's movie sites a 20' rise in sea level, the same U.N. panel expects only a 1' rise by 2100, the same as the last 150 years. Why exaggerate by a factor of 20? (Might there be an agenda?)
3 - He cites Nairobi as experiencing an increase in malaria - problem with this is that WHO (World Health Organization) has stated that Nairobi is free of malaria.
4 - He tells us that Antarctica is warming - well, 2% of Antarctica is warming but 98% is cooling and getting thicker. Guess he didn't want to take his cameras to the other side of the continent.
5 - Sea ice is decreasing in the Northern Hemisphere but increasing in the Southern Hemisphere.
There are numerous other problems with the global warming fear proponents. But there are also related economic and education problems.
Economically, to implement Mr. Gore's plan, would cost $553,000,000,000,000 (that is $553 trillion) over the next century. Do we really want to spend this kind of money and saddle our kids with this debt and a lower, less healthy standard of living for a problem that will happen (thanks to the sun) no matter what we do? Maybe we should spend the money on something constructive vs. destructive.
Educationally - just why do we continue to tell our youth only the facts we want them to know versus all the facts? Are they that slow? No - but they are impressionable and feeding them data that is at best half-true is a detriment to all societies on the planet.
Today, there is no doubt the planet is warming yet in the 1970's we were told we were entering another ice age. What is it? "Climate" is weather over a long period of time - not just the last N years - take your pick, whatever fits your agenda.
It's time to learn the facts, all the facts. Humans have adapted for thousands of years - we will again. It will be much easier if we tell people the whole truth and nothing but the whole truth.
Capitulation
My objection to the logic of Pawlenty and Severson's position is that any bar is in a sense a private club. You're just fussing over the membership rules. But I admit to being quite disappointed with Rep. Severson's response to the challenge that smoking bans violate personal rights:It would outlaw smoking in indoor workplaces and public transportation. They said it's an issue of workplace safety, nonsmokers' rights and public health.
"I believe it's the right thing to do," said Severson, who supported a similar bill two years ago.
In the past 10 years, there has been a "consistently steady move toward a smoke-free environment," he said, "because we know it's healthy and because the public overwhelmingly supports it."
Smoking opponents made their last run at a statewide smoking ban in 2005, when the House Commerce committee killed the bill.
Debate centered on how far to extend smoking restrictions, and one panel supported a scaled-back ban that wouldn't hit bars and American Legion posts.
Gov. Tim Pawlenty's spokesman, Brian McClung, said in an e-mail that the governor supports a statewide smoking ban but would prefer that it contain an exemption for private clubs such as VFWs.
"The most important part, though, I think we need to understand is 20 percent smoke. Eighty percent don't," Severson said. "That 80 percent has to have a voice in this personal rights issue as well. When that smoke impinges upon our ability to breathe without our consent, that impinges upon our rights as individuals as well."Personal or individual rights do not need protection if they are being done by a majority or even a supermajority. The purpose of claiming something as a right is that it is something not subject to majority rule. A right is a restriction on the power of government. Severson's explanation says that 80% of the public can run over the right of barowners to their property or the 20% of the public that smokes who enter into contracts with bar owners by buying a drink and asking for and receiving an ashtray.
(Note: I am not a smoker save for the occasional, open-air cigar. I felt like I was choking in the smoke outside the conference room in Yerevan when I was there two weekends ago, but I understood the rights allocation to be different there, just as I do when I walk into bars. I have, in short, invited myself to the nuisance, and cannot both receive the benefit of a bar being in that place because of the business it receives from smokers, and the benefit of kicking out those smokers.)
This is drawing many comments and much ire from conservatives on the Times chat, including this post:
Sorry to say I supported Dan in both elections. My vote, my money, my time making contacts. But he has knuckled under to the radicals and is willing to take the freedom away from the business owner to operate his livelihood as he sees fit. And he claims to be a Republican, a party against big government. Well, Dan, goodbye. No more money or support.I don't know as I'd go that far. It is a much smaller issue to me that a Republican supports a statewide ban on smoking than, say, passing sense of the Senate resolutions opposing administration policy in Iraq. But it is symptomatic of what Paul Mirengoff discusses in reviewing a lunch speech by Judge Janice Rogers Brown, "that erosion of our freedoms and, more importantly, the philosophic underpinnings of these freedoms, have caused a critical mass of the body politic to become too comfortable with the 'parasitic state.'"
Yet it seems that local barowners are capitulating to the predation of a tyrranical majority: Many reports include a line that says they will accept a statewide ban as preferable to a city-by-city ban. (Barowners in Duluth and Moorhead might have a different view of this.) Resistance is futile. And so Leviathan marches on, and Republicans seem willing to join arms with Democrats on the parade. If the barowners will not protect themselves, they get the government they deserve.
Undeclared, undecided, uninformed, and unformed
You might train people in logic and critical thinking earlier, and you might want students to choose earlier. But that doesn't change the fact that students simply do not know themselves well enough at age 18 to say what they want to do at age 48 with any degree of certainty. Would it not be better to give them time to form as college students before they choose?
Thirty percent of students change majors at least once. Do you really think 70% got it right the first time?
Matt finds the kernel
I think the policy is kind of unfair to Minnesota residents, but instead of blaming Wisconsin, they need to look closer at why they pay more.From Scholar's Notebook, regarding the news today that the Universities of Minnesota and Wisconsin might end their reciprocity agreement. But you know what the answer will be, don't you? "Minnesota has reduced its 'investment' in higher education." Richard Vedder discusses whether the investment is wise. There are arguments that the return on the investment could be positive or negative.
The first argument suggests that universities have what economists call "positive externalities" or spillover effects. For example, the knowledge gained through education allegedly makes us more discerning citizens, more likely to elect level-headed leaders and not charlatans. The advance in higher forms of literacy facilitates communication, making markets function better. Tolerance learned in the course of advanced study ultimately reduces divisiveness, rancor, and arguably civil uprisings. Those subscribing to this view argue that since some of the gains of higher education accrue to the broader populace, it should subsidize it --via appropriations for universities, grants for students, etc.
Yet maybe college has "negative externalites" as well. For example, maybe the celebration of multi-culturalisim in universities has reduced social cohesiveness that binds diverse persons together in a nation. Maybe universities preach a moral relativism that ultimately leads to more crime, greater corruption, etc. Maybe universities promote sin more than virtue, ideology more than knowledge. Maybe the taxes used to finance government support have severe disincentive effects on private activity, and that the "crowding out" of such activity by universities lowers GDP since private market activity in general is more efficiently generated than that at our largely not-for-profit universities.
It is very difficult to measure externatlities or spillover effects. The limited work that I have done in the area, however, leads me to believe that the negative externalities may well exceed the positive ones. For example, states that spend more on higher education, other things equal, tend to have lower rates of economic growth. People do not flock to higher education-intensive areas because of their alleged higher quality of life (the reverse is closer to the truth). If the negative externalities dominate, not only should we stop subsidizing higher education, but probably we should tax it (a point made to me first by Milton Friedman in an e-mail).
Thursday, January 25, 2007
How about "first-year crooks"?
Among the things attendees at this morning's National Journal /NBC post-SOTU breakfast learned was that it is no longer politically correct in the House Dem caucus to refer to the newly elected members from '06 as "Freshmen." How did we learn this? House Maj. Whip Jim Clyburn referred to the "freshmen" and then corrected himself and then went on to admit the new policy. Freshman, er newly elected Rep. Jason Altmire (D-PA) told the crowd that he "suspected" it had something to do with the word "new" being more appealing to the public than "freshman," which can be seen by some as derogatory.I note that in the programs at SCSU athletic events, 'FY' has replaced "Fr" or "Frosh". Al McGuire's famous crack doesn't work here.
(h/t: Our House. Fix yer RSS, ye champions of the taxpayer!)
Union membership continues its decline
The union membership rate for government workers (36.2 percent) was substantially higher than for private industry workers (7.4 percent). Within the public sector, local government workers had the highest union membership rate, 41.9 percent. This group includes several heavily unionized occupations, such as teachers, police officers, and fire fighters. Among major private industries, transportation and utilities had the highest union membership rate, at 23.2 percent, followed by construction (13.0 percent). Within the information industry, telecommunications had a 20.7 percent union membership rate. Financial activities had the lowest unionization rate in 2006--1.9 percent.I would have guessed manufacturing was higher than the reported 8%. This puts in rather stark relief the relationship between the Democrats and unions -- it's actually the relationship between government workers and their paymasters.
Conservative optimism
...the data do not tell us that conservatives are uncaring; they actually tell us that conservatives are optimists. Conservatives are relatively untroubled by inequality, and unsupportive of government income redistribution, because they believe the American economy provides private opportunities to succeed. Liberals are far more pessimistic than conservatives about the possibility of a better future for Americans of modest means.He's quoting from the 2005 Maxwell survey; here's the new 2006 survey. Interesting results in that survey include:
Consider the evidence. While 92% of conservatives believe that hard work and perseverance can help a person overcome disadvantage, only 65% of liberals think so. This difference of opinion, contrary to the convention, is not because conservatives earn more money. In fact, lower-income conservatives are about twice as likely as upper-income liberals to say they think there's "a lot" of upward mobility in America. If a liberal and a conservative are exactly identical in income, education, sex, family situation, and race, the conservative will be 20 percentage points more likely than the liberal to say that hard work leads to success among the disadvantaged.
Among those who think everyone has the opportunity to succeed, President Bush’s job approval rating in 2005 and 2006 was 49.5 % approve – 42.1 % disapprove, a relatively positive reaction at a time when his overall ratings were 31.1 % approve – 59.3 % disapprove. Among those who think only some have the opportunity to succeed, his ratings were 11.3 % approve – 81.6 % disapprove.
And,
Those who are optimistic about opportunity, do not see a haves-have-nots society, who do not see inequality as a serious problem, and think government should do less and emphasize individual motivation are much more likely to identify with the Republican Party. Those with opposing opinions are much more likely to identify with the Democratic Party. The parties are attracting voters with very different views, which provides them with the electoral base to be strong advocates for diverging positions.But in general, 88% of respondents to this poll thought that, "given the effort you have put in and the talents you have ... things have worked out for you have been fair" or somewhat fair. Less than ten percent think family background drives economic outcomes.
I read these polls with an eye towards the distinction between how people view their own experiences versus how they view others' experiences. People tend to be more willing to ascribe other people's problems to circumstances than their own; they believe their situation is he fruit of their own hard work. There's a lesson in that, I think, for how the political parties can talk about inequality in the 2008 election.
Not inconsistent?
Wednesday, January 24, 2007
No truer words are spoken
2) If you’re in college, make friends with the secretaries and computer jocks. Between the two of them, they’ll get you everything you need.The other two rules aren't so bad, either.
It's in character
Private university functions
Meanwhile in Virginia and Missouri, legislators are proposing bills that would require public universities to report on their efforts to assure intellectual diversity. Such bills would probably cause them never to host Mr. Carter.The Brandeis administration would like to keep the event at arms length. It was an ad hoc committee of faculty and students that invited the former president. Nevertheless the university remains quite attached to the event by having to assume logistical and security responsibilities.
What is more important is whether the event will turn out to be a publicity stunt for Mr. Carter or whether it will actually be an opportunity to question his views. The event is open only to members of the press, students, faculty members, staff, and trustees. Already, though, rigorous critics are not permitted to be present at the speech. Alan Dershowitz, a professor of law at Harvard, who was supposed to debate Mr. Carter, will now speak at a separate event later today due to Mr. Carter's unwillingness to enter a debate with Mr. Dershowitz. Stephen Flatow, whose daughter, Alisa, was a Brandeis student killed in an Islamic Jihad bombing in 1995, says he was "privately discouraged" from attending.
Had he attended, Mr. Flatow, who endows a scholarship in his daughter's name, would have asked Mr. Carter whether he supports Palestinian violence directed against civilians. "I would have liked to stand up there and say ‘My daughter would have been a Brandeis graduate in the class of 1996 had she not been murdered by Palestinian terrorists. Is it ok for Palestinians to resist the Israeli occupation with murderous force?'"
I'm sure I'm repeating myself, but...
Raising the minimum wage is a low-cost way for politicians to show they care for the downtrodden in society - low-cost to the individual politicians, that is - not to those negatively affected by higher minimum wages.Costs are always costs to someone. Minimum wage increases are a low-cost way to politicians; they tax only a subset of businesses or, if the tax can be shifted forward, the consumers of the products and services created by minimum-wage labor. To one of those two groups, they are not low cost.

There is no free lunch; it's only a question of who pays.
Beware the "fud"
It all came together in my class last night. We were reviewing Moore's Law, the statement that the number of transisters on a computer chip would double every 24 months, eventually reevaluated to every 18 months. We heard horror stories that the rate of change would fail in the 1980's; then, 2000 would result in the crash of every stock market on the planet; then science would have reached the end of its computer applicability by 2007, then 2015, now, it's 2045, etc.
The point? No matter what the doom and gloomers say, given enough freedom and open markets, we will keep on improving. As I told my students, the naysayers and doom and gloomers simply have no faith in the human spirit and they will always be there. THerefore, listen to them, assess their words, then get on with your life.
Tuesday, January 23, 2007
Benefits are harder to figure
Last week it was reported that two Colorado legislators had asked the state's auditor to investigate the spending of $21.8 million in 2006 of the University of Colorado's Diversity Administration. The Independence Institute in Golden reports that the spending may be more than that, and that there is inadequate oversight.
Any organization undertaking a major expenditure like this would engage in some kind of assessment of the costs and benefits, right? According to the Chronicle of Higher Education, though, maybe not. (subscriber's link)
News of the Colorado development distressed, but hardly surprised, many of the nearly 170 college administrators, faculty members, and admissions counselors who were gathered here on Monday for Clemson University's Fifth National Conference on Best Practices in Black Student Achievement.
Although several said they had grown accustomed to justifying their affirmative-action efforts and felt confident they would be able to account for every dollar spent on diversity programs, others said they worried that colleges were ill prepared to defend such efforts against those demanding that they be subjected to a strict cost-benefit analysis.
...One of Monday's featured speakers, Damon A. Williams, the University of Connecticut's assistant vice provost for multicultural and international affairs, said he saw the Independence Institute's efforts to scrutinize university spending on diversity as representing "the next wave" of attacks on affirmative action. He said he had responded to news of the institute's report by sending letters to three major national higher-education organizations, which he declined to name, urging them to mobilize colleges elsewhere to defend themselves against similar scrutiny.
"I think many institutions are greatly at risk," Mr. Williams said. Colleges have only in the past few years begun documenting the educational benefits of diversity, he said, and while they generally can make good arguments that the diversity programs serve a valuable purpose, they have not done enough to document and track the money spent on such efforts and their results.
Richard Bayer, dean of enrollment services at the University of Tennessee at Knoxville, said he saw the inquiry about diversity spending at Colorado as part of a broader movement to demand accountability of higher-education institutions. "To some degree I think it is going to have an impact on diversity on campus," he said. "It makes you stop and think very carefully about how you are spending your dollars, and are you making a difference."
"Every time we try to do something, there is a group that is challenging what we are doing," Mr. Bayer said. "We are going from analysis to, almost, paralysis."
Translation: "If we have to document and justify what we do with public money, we might not be able to spend as much." Those who have been challenged to do just that are said to be best able to meet the challenges of reports like II's. But the problem is that few do so, because again, the measurement of the benefits are quite difficult.
Following the U.S. Supreme Court's 2003 decisions involving race-conscious admissions policies at the University of Michigan at Ann Arbor, colleges throughout the nation were advised by lawyers to document the educational benefits of diversity in case their affirmative-action programs were challenged. But when UConn's Mr. Williams asked the nearly 170 conference participants to raise their hands if their institutions were actively trying to measure the educational payoffs of diversity efforts, only a few hands went up.Discriminations asks:
Why should they have to do that, they might well ask, when they can’t even document the “benefit” of History or English or a whole slew of the social sciences? But while the benefit of the Humanities might be hard for accountants to justify, their cost isn’t hard to document. At most institutions this is not true of “diversity”spending, and some honest accounting would seem to be entirely in order.That's a good point: The opportunity cost of a discriminatory system is hard to measure since those costs -- mismatching students with universities that can serve them best -- are not directly observed.
Jumping sharks and tunas
- I am very unpleased with the turn 24 took last night. (If you want spoilers, go read Jeff's liveblog.) I won't say much here in case you still need to fish it out of your TiVo. The shark has not been jumped, but the shark is in the pool and the show is strapping on skis. But the first two weeks I spent in LA were in Granada Hills, and I had a nostalgic moment there...
- Did you not see Parcells quitting? As a Giants fan I am elated, not because Parcells has been disgraced -- he isn't; that team is one defensive stud away from being really good -- but because Parcells is the guy who could get them all the way to the Super Bowl. (Tell me they'd not have beaten the Bears had Romo held the snap.) And Jerry Jones will now get the Second Coming of Barry Switzer. Now if my contract on Andy Reid comes through...
- Now on DirecTV, the Peyton Manning channel. I will now set my TV on fire...
- Think this might harm Larry Jacobs as the font of dispassionate political analysis on every Cities TV station? No, me neither.
Do athletics affect academics positively or negatively?
- Fleisher, Goff and Tolllison, The NCAA: A study in cartel behavior (1992) contains a chapter by the latter two examining the relationship between football success and academic contributions, and finds an effect.
- Paul Grimes and George Cressanthis, 53 Am J Econ Soc 27-40 (1995), argue that athletics success increases donations to the academic programs of universities.
- Toma and Cross, 39 Res Higher Ed 633-661 (1998), argues that athletic success induces more applications from students to the university.
Monday, January 22, 2007
Cost of D-1, again
The timing of this column is a little fishy. There is nothing timely about an article about SDSU, unless it's because of the meeting last Monday. At that meeting individuals pointed out that the record of the Northern Sun Intercollegiate Conference -- into which the rump North Central Conference would be folded into -- was to have wonIn its last nine Division II seasons, South Dakota State led the nation in men's basketball attendance six times, with a peak of 5,350 in 1997-98. The Jackrabbits' home record in those nine seasons: 125-15.
"A lot of times, it was hard to communicate with players on floor because of the noise. We had to use hand signals," Schlagel said. "It was the event in that area of the state."
Said Huskies athletic director Morris Kurtz: "They were the crown jewel of Division II basketball."
No longer. Brookings is now the Siberia of men's college basketball: the Jacks are in the big time, and the big time is treating them shabbily.
Since South Dakota State quit the NCC and moved up to Division I in 2004-05, the men's basketball program has gone from being a Division II national power to a Division I punching bag.
The column compares South Dakota State's participation as an independent D-1 school to its performance as a member of a highly-ranked and very popular D-2 conference. How many independent D-1 programs make money besides Notre Dame? Even Penn State finally succumbed to the Big
One speculation: Four of the NSIC schools are members of MnSCU, as are petitioners St. Cloud State and MSU-Mankato. Will there be pressure from the chancellor to grease the skids to allow the two big schools in with the rest of MnSCU? Because if there's not, why would the NSIC allow two schools with 13-14,000 student bodies join a conference with no school over 10,000, and against which the NSIC schools have not been very competitive?
UPDATE: Twisted a sentence up badly, whoops! Edits displayed.
It's net price, Princeton
The University denies that these new room and board fees are linked to the tuition plan, but one can only wonder if they are being 100 percent honest here. They claim that the university heavily subsidizes student housing (which may or may not be true) – but why cut that subsidy in the same year that you are freezing tuition? Purely a coincidence?What does it mean to say you are "subsidizing student housing"? What are the opportunity costs of putting a student into a dorm room if the dorm is already built? Am I to believe that the cost of feeding a Princetonian is being subsidized with below-market meal plan prices and, assuming they all eat cafeteria food, what really is that meal's opportunity cost?
Ballparks
25 days to pitchers and catchers, by the way.
P.S. For us Red Sox and Yankee fans, it looks like a great season ahead. That projects using the Pythogorean theorem to winning percentages of .583 and .584 for the two teams, or about 95 wins each.
Quick note on Ukraine
Since the orange revolution, Yushchenko has, in the eyes of many orange supporters, made so many [coerced?] political errors, that BYuT see him as a 'busted flush' [a poker term meaning someone or something that had great potential but ended up a useless failure] having no future prospects.Perhaps some broad coalition forms there, but otherwise it appears Yushchenko either will be marginalized or create a coalition with Yanukovych to keep Tymoshenko out of power. His ability to shape events in the country has decreased.
Clearly for Tymoshenko, always a high-stakes gambler, to gain power, she must defeat her biggest political enemies -Yanukovych and PoR. She is the only leader who could possibly benefit if early elections were to take place. 'Den' suggests maybe Friday's maneouver was an attempt to drive Yushchenko, from whom power is rapidly draining away, into a corner, and leave him no other card to play but to [somehow] force early VR elections.
Sunday, January 21, 2007
Armenia from afar
Pointing to [Ogun] Samast's young age, Dink's lawyer raised the possibility that he might only be a hit man. "The boy might have pulled the trigger, but the authorities should find those who are behind him," Erdal Dogan told the Aksam newspaper. "The state should not just say 'this boy did it' and shut up."Vigils have been held in Armenia and in Turkey, and sharp statements from the Armenian government have made tensions a little stronger than one would hope. The conference last weekend was a time in which we could reflect on a world in which the two countries started healing and learning to live with each other, and Dink's murder is no doubt going to slow that process. But despite hard feelings the fact remains that Armenia and Turkey are neighbors, that a closed border is harmful to Armenia much more than it is to Turkey, that one must find a way out of this mess, and that hoping the EU will get Armenia the recognition and apologies its diaspora want may be little more than wishful thinking. Onnik Krikorian says it well in this comment:
Istanbul's chief prosecutor, Aykut Cengiz Engin, said organized crime units would probe the murder, even though there was no immediate indication that an illegal organization was involved.
Among the detainees was reportedly a friend of Samast, named as Yasin Hayal, who spent 11 months in jail for a 2004 bomb blast outside a McDonald's restaurant in Trabzon. Samast said in his initial testimony that Hayal encouraged him to kill Dink and gave him the gun, the Milliyet newspaper said.
Turkey will only be changed by internal AND external pressure — and that is what we can expect from European intergration and the deaths of many Turks and Kurds, and now an Armenian, at the hands of Turkish nationalists.
Otherwise, I don’t think anybody needs to “use” Dink’s murder to campaign for Genocide Recognition. Just the very fact that a man who stood for peace and reconciliation between Armenian and Turk has been killed because he also spoke about the past does that automatically.
Friday, January 19, 2007
Tomorrow on the Final Word...
Michael has apparently gotten fishy on the minimum wage, so I will bet the issue comes up again on the show. And who knows what else? Maybe my Armenian travelogue?
That's tomorrow, 3-5pm. Tune in, or stream it, or podcast it.
Driving up demand for season tickets
I don't think it's personal against the Patriots or their fans. Indeed, if I were the Colts front office, I'd subsidize at least one ticket for Tom Brady to improve fan ambience.
Students hung by PAYGO
The problem for the House was how to pay the subsidized interest under its new PAYGO rules (or actually the old rules, according to Dick Armey -- WSJ subscriber link.) The subsidies are a $6 billion gift to young college graduates which must be paid by increasing taxes and fees or cutting spending somewhere else. In this case the burden is being paid by lenders who provide students with college financing (if you own Sallie Mae or Nelnet stock, you lost money this week.) Thus the House is reducing the amount of money available to finance incoming freshmen to give a temporary tax break to young college graduates. So which group votes more?
UPDATE 1/20: KT correctly points out that the interest rate falls immediately in increments, but is subject to a sunset in 2012. The rate schedule is
- July 2007: 6.12%
- July 2008: 5.44%
- July 2009: 4.76%
- July 2010: 4.08%
- July 2011: 3.4%
A larger point, however, is that setting any credit control that binds interest rates below what the market will bear shifts money out of the controlled market into uncontrolled markets. A bank that might have made subsidized student loans in the past may instead now shift their assets into Treasury bills or business loans.
Reduced demand for the M.R.S.?
There are many demand-pull factors, including delayed marriage, increased female labor participation, and the "pill". The authors note that "the jury is still out concerning whether the full lifetime economic returns to college are greater for women than for men," but that the wage premium for college degrees for females is greater than that for males.
More surprising to me, however, is that the supply of males eligible for college might be dropping relative to that for females. In the paper itself (link for NBER subscribers only) :
Jacob (2002) finds, using the NELS, a much higher incidence of school disciplinary and behavior problems for boys than girls and a far lower number of hours spent doing homework for boys than girls. Controlling for these non-cognitive behavioral factors can explain virtually the entire female advantage in college attendance for the high school graduating class of 1992, after adjusting for family background, test scores, and high school achievement. Similarly, we find that teenage boys, both in the early 1980s and late 1990s, had a higher (self-reported) incidence of arrests and school suspension than teenage girls, and that measures of behavioral problems significantly attenuate the female college advantage. Reinforcing these findings is evidence that boys have two to three times the rate of Attention Deficit Hyperactivity Disorder (ADHD) than girls and much higher rates of criminal activity (Cuffe, Moore, and McKeown 2003; Federal Bureau of Investigation 2004). Boys are also much more likely than girls to end up in special education programs. The source of boys’ higher incidence of behavioral problems is an area of active research and could be due to their later maturation as well as their higher rates of impatience (Silverman 2003). Because gender differences in development and behavior are not unique to any particular country, they can explain why the reversal of the gender gap in college has occurred throughout much of the developed world once female access to college and to labor market opportunities were improved.So perhaps the cost of the 'war against boys' can now be measured. As Christina Hoff Sommers pointed out last year, it may be that the supply of female students to college is higher now because the education establishment finds it easier (or more desirable?) to generate a female college-prepared high school graduate than a male one.
We know best how to beg
Recently MnSCU started a Friends Action Network (FAN) to encourage faculty, students, alumni, and community members to sign petitions and write to legislators in support of MnSCU’s legislative budget request and legislative agenda. While I think it is good that MnSCU is developing community and alumni support for higher education funding, I am concerned that MnSCU not try to usurp the voice of the faculty on legislative matters. IFO is the official voice of the state university faculty and has its own network for communicating with legislators. We are more than willing to lend our support to most of MnSCU’s budget request, but we don’t think MnSCU is asking for enough money, and there are some portions of the request that appear to link money to pay-for-performance. Faculty are, of course, free to sign petitions and communicate anything they want to legislators, but I would urge faculty to know exactly what is in the MnSCU request before they sign petitions or write letters."We want more money, and we don't want it tied to performance." That's our union.
Thursday, January 18, 2007
I just remembered
It's also worth noting the number of DFL legislators who sent back their money (all of whom had their returns dated 10/23, by the way): Tim Faust, Andy Welti, Mindy Greiling, Sandy Peterson, Katie Sieben, Don Betzold. Why are these people running away from a potential standard-bearer of their party?
Inflating the Minnesota budget
There is a “surplus” because of Republican magic which at one time attempted to deny the laws of economics and decree that inflation is something that only happens to Minnesota Citizens,...You can look at this two different ways. One, if you believe that any level of government activity budgeted once is budgeted forever, then not budgeting government spending with inflation adjustment would be seen as a cut, and you'd want to portray expenditures with the inflation adjustment. But why would you choose this as the basis? If private companies always budgeted costs to rise with inflation without any increase in activity -- and ergo, revenue -- these firms would soon dry up of money. I'd as soon see governments engage in zero-based budgeting than use budget forecasts either with or without inflation adjustment, a zero basis meaning no need for a forecast, but at least zero-inflation budgeting puts some pressure on government servants to be more efficient.
Second, once one decides to budget for inflation, the question is which inflation rate to use. This isn't a simple choice between CPI and a few alternatives; it is a question of how one calculates the price of a government service. CPI itself includes governmental fees and some taxes, so there's a feedback loop between government size and CPI. And since the largest part of government spending at the state and local level is personnel, and since health care costs rise faster than the CPI generally, there would be a push for a higher inflation adjustment ... without any assurance that the money actually goes there.
Even if you could agree to a particular index, the question then is how to forecast it. Every forecaster deals with a loss function -- what is the cost of an error? And in particular with government budgeting, the cost to the political system of an error that requires a tax increase or spending cut in the second year of the biennium to balance the budget is much greater than cost of overbudgeting in year one and holding a surplus in year two (all the better for giving away in an election year run-up. Nice deal there -- they take credit for borrowing money from you and paying you back with zero interest!) The budgeting process would then have an inherent bias towards conflict in politics and likely to overspending and overtaxing.
The bill should be rejected -- the current system actually works quite well, protecting almost all of government spending while allowing gradual adjustment of the budget to shifting priorities.
Costs, seen and unseen
A common myth is that schools across the country with lots of low-income students are less-well-funded than schools with fewer low-income students. The opposite, actually, is more routinely the case. Minnesota, in fact, recently ranked fifth best in the nation in terms of "extra poverty-based funding per student living below the poverty line." This (benevolent) gap was $3,075.As I often teach, costs are always costs to someone. So when you hear that parents of the students at Ascension are the cream skimmed off the top, what does that mean? It probably means that those parents contribute more of the cost of their children's education in time and sweat than in cash dollars. (It's also worth noting that a religious school subsidizes education in order to gain the ears of children they hope to convince to be lifelong followers of the religion ... and adults who fill the coffers.)
But given that African-Americans in Minneapolis are doing unusually poorly academically, how do these conflicting findings compute?
To complicate matters even more, consider Ascension School, a K-8 Catholic school in north Minneapolis. Students are overwhelmingly minority; they're overwhelmingly non-Catholic; and in 2005, 90 percent of eighth-graders there passed Minnesota's Basic Skills test in math and 95 percent passed Minnesota's Basic Skills test in reading.
In contrast, eighth-graders in Minneapolis public schools, in 2003, passed at these rates in math: 82 percent for whites; 57 percent for Asian/ Pacific Islanders; 41 percent for Hispanics; 40 percent for American Indians; and 28 percent for blacks. ... MPS scores were significantly better in reading than they were in math; but again, they were significantly below Ascension's reading scores.
What are tuition rates (for non-parishioners) in inner-city Catholic schools in the state? According to the Minnesota Catholic Conference, they average under $3,200 for elementary schools and under $8,000 for high schools. By contrast, as long ago as 2003 -- in the wake of a recession -- federal, state, and local revenues in Minneapolis Public Schools totaled $13,658 per "pupil unit."
So I'm not as comfortable with the dollars-for-dollars comparison Mitch is making here. But it raises another point. Let's suppose parents invest in their children's education (for whatever reasons) by a combination of time, talent and money. If there are no financing constraints, parents choose for their children the school that makes the best use of the parents' time and talent, given the cost of borrowing for education. Constraints on financing educational choice, not least of which come from taxation to pay for public education, lead some families who can benefit to public rather than private choices. Vouchers are a way of overcoming the financing constraint; this is why vouchers seem particularly attractive to African-American families who both may face financing constraints and have historically cared a great deal about the educaiton of their children (and thus willing to commit lots of time and talent.)
Tough luck
But I held off on posting that waiting for former Scholar Kevin McGrew to post on this issue, as a fellow who devotes his life to understanding intelligence testing. He's weighed in, and I'm glad I waited. He says there's more to school performance than IQ.
I refer readers to a report I previously wrote re: this issue. It is often referred to as the "Forrest Gump" report. The report, IMHO, points out a serious flaw in Dr. Murray's logic...namely, that a specific IQ (esp. low IQ dooms a person to a lower set of achievement expectations). The bottom line...there is a normal distribution of achievement around any IQ score, whether it be below the 50th percentile or above. My point in the Gump report is that for any individual person, their general IQ score is not accurate enough to deny any individual to reasonably appropriate and high academic expectations.The below-average will always be among us.
However, Dr. Murray's position does fit with the extant body of group (vs individual) based intelligence research that suggests that, on the average, interventions to raise IQ and achievement have meet with limited success. This is one reason why the mastery learning experiment (which I have always maintained has conceptually been reborn in the form of NCLB) ran up against a major dilemma in individual differences/learning research....the "time-achievement equality dilemma." ...
In simple terms....educational psychology research has repeatedly shown us that at the group level (not to be confused with my individual Forrest Gump expectations report), education policy can either hold instructional time constant, and then achievement will vary as per the normal curve, or can attempt to hold achievement constant (standard expectations for all), and time will then vary as per the normal curve. This is the rub against which NCLB is now bumping up against. ...The educational research suggests, IMHO, that we can likely move the mean level of educational achievement (I'm not sure how far) via attention to variables "beyond IQ", such as instructional time, quality of instruction, high standards and expectations, interventions focused on non-cogntive/conative characteristics of students, etc., but that there still will be a normal distribution around the new mean. This is still a laudable goal.
Wednesday, January 17, 2007
Retreat
UPDATE: Home, but sick as a dog. Armenia gave me a sinus infection as a gift and I tried to lead a retreat with one eye watering constantly for the last hour. The screen is too hard to look at, so off to bed. Sorry.
Tuesday, January 16, 2007
Budgeting for inflation = higher spending
This week Rep. Rukavina and Senator Cohen introduced legislation to require the Governor to include inflation estimate in future budget forecasts, starting with the February 2007. This is an important piece of legislation—the Governor has not recognized inflation adjustments in his budget forecasts and budget recommendations for the last four years. In that time, inflation (the CPI) grew by 11.83%, eroding purchasing power. If inflation is recognized, there really isn’t a budget surplus. This will be a sobering realization for many legislators who had plans to use the surplus for new initiatives. The IFO’s #1 budget priority is to fund inflation at 3.5% for each of the next two years. To do so will cost $140 million.Here's the bill. The state legislators have already started correcting for inflation with their own pay. A reminder from former state representative Jim Knoblach: "I don't think it's in the state's interest for inflation and spending just be on autopilot."
A puzzle or a mystery?
He states that convergent problems are easier to solve and therefore that the word "war" is wrong to use to describe Iraq. There's nothing new in that statement, and really nothing with which I would disagree. But the word "war" isn't applied to Iraq by Bush but by his detractors. Bush's war is against global terror.Mistakenly [Bush] has defined his objective as victory. A convergent problem, call it a puzzle, is one that has a clear, even unique, solution, like a crossword puzzle or a math problem. Building a bookshelf or sewing a quilt are examples of convergent problems.
A divergent problem, call it a mystery, is one that has many solutions, none of which is definite and absolute. Marriage is a divergent situation; there is no unique solution. International diplomacy is a divergent problem.
That, my colleague would say, doesn't help matters much.
But there is no war against terrorism. Terrorism is a tactic in a divergent struggle, like the "troubles" in Northern Ireland or the Israeli-Palestinian conflict. A war against terrorism is like a war against chemical weapons; the phrase doesn't make sense.True. Of course there isn't a war against terrorism. There is a war against terrorists, though, particularly those who do so in the name of Islamism (as opposed to Islam.) To make the war one on Iraq is to say that the insurgency there and the insurgency and counterinsurgency in Somalia are separate -- they of course are not.
I wonder whether it is correct, though, to say that a divergent problem has only divergent solutions. Since the conflict is about fundamental values -- and indeed, my colleague says in his last sentence we need to first understand that make terrorists take up arms, a statement easy to say from an office at SCSU but a little more difficult in a Humvee on patrol in Iraq -- and since those views are apocalyptic, there is for both Islam and Christianity a point where there is convergence. The Second Coming is not a multiple-equilibrium solution, and Islam has its own end-times predictions. There are many paths to those endpoints, but there is a separating hyperplane between them. Each side will only accept solutions on opposite sides of that plane.
The solution then is a matter of waiting for both sides to weary of conflict, as Thomas Sowell has pointed out in his work on ethnic conflicts and civil wars such as that in Sri Lanka. That too is a convergent solution. It is the one in fact for which the insurgency waits, that America's patience wanes first. Attrition, too, is a convergent solution.
That doesn't obviate the article's conclusion, that Bush's use of the word "war" defines the problem badly. On this in fact I agree. But I don't believe it's a m