Monday, April 30, 2007

A short, sad note 

I shot a note out to Rep. Steve Gottwalt after seeing that he had missed the vote on the smoking ban (something he was voting for) and the tax debate about which he was passionate. I worried something was not OK. Saturday night I found out that his mother-in-law had passed away on Friday unexpectedly. The funeral is here in St. Cloud tomorrow. Our prayers are with Steve and Paula.

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The Undertow of Over Taxation 

Today I had lunch with a friend whose other friend, whom I'll call Bill, stopped by our table. Bill had a small business in a St. Paul suburb. Over the years he'd hired and paid between 5-10 workers annually. The business was his life. His dream was to sell it and retire on his life's work. He sold it just fine. But then the government stepped in: MN took 12% in taxes, the Federal Government took another 40%. Why should anyone, anyone, work for 40+ years to give the government over 50% of a life time's efforts?

Second blow - he also owns property in downtown St. Paul. For years, no one paid any attention to him. Now, seems like the city wants the property. "We never knew this building was here," commented the inspector. Duh - do you read tax records, property records? They didn't tell him why, just that the city was interested in his property. He won't make any money on this sale for sure.

Third example. Though a small business, he's required to place a sign on the door that says "door shall remain unlocked during business hours" and another displaying his right to be where he is. Well, these were missing - sloppy, yes! Over $600 in fines, NO. But then, a bureaucrat must keep busy.

So why are these three, small examples important? See, the owner, the one who took all the risk, the one who worked for over 40 years to provide for himself, his family, his retirement, the one who provided jobs for others, paid all his taxes, etc. ends up getting used by the government. Not only did the government take a huge chunk of his hard-earned money, but the jobs he provided will be gone. MN got their pound of flesh and then some. But they won't get any more.Why? He's moving to a lower tax state and taking jobs and money with him. He's also taking his work ethic and entrepreneurship and ideas and enthusiasm and energy, etc. with him.

Try to explain the fallacy of "taxing the rich" to an anti-business, socialist minded legislator.


How much more progressivity would you like? 

This graph shows the level of state income tax paid per dollar of income earned by income classes in 2006. This is the product of a new study by the Minnesota Taxpayers Association. It reports that we have been passed by other states in terms of lower income taxes. For example while we've fallen from 23 to 26 in the rankings of income taxes paid by households with $50,000 income (1 being highest, 42 being lowest), we have gone from 18th to 13th for families with $100,000 income. For single individuals with $50,000 income, we've gone from 11th highest in 2003 to 8th highest. For families with $500,000 inocme, we have risen from 10th to 9th already. Alas, for the DFL that's not enough -- the House proposal would take that to sixth, and under the Senate we would be #1.

Our state in 2004 has the fifth highest total taxes (state and local) per capita, and fourth highest per $1000 personal income. (The study notes that these numbers change depending on assumptions about the composition of income earned between capital gains, wages, and other income sources.)

The upshot -- we already have a more progressive tax system than most other states, with a great deal of generosity in tax treatment of lower income families. Executive Director Lynn Reed said in this press release:
Minnesota�s income tax system remains mostly competitive since the cuts of 1999 and 2000 for incomes up to $100,000. However, no state can afford to ignore how its taxes rank compared to other states. It is commendable for the Legislature to be considering the regressivity of Minnesota�s entire state and local tax system, but relying solely on increases to higher income households to balance the rest of the system runs the risk of violating not only the competitiveness principle of sound tax policy, but also the principle of visibility, by concentrating tax increases on very few taxpayers to pay for benefits to millions.

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Tax death certificate 

This is the death certificate that House Republican Leader Marty Seifert waved at lawmakers while speaking on the floor of the Minnesota House last Friday. His efforts may have been helpful in peeling off 11 DFL legislators -- including St. Cloud Rep. Larry Haws -- from supporting the DFL income tax increase (not "shift in tax burden" as the DFLTribune published Saturday morning.) Seifert has a press release that most papers covered, but you have to read the text of what he said on the House floot to get this. Seifert's office sent this to me a little bit ago. While realizing this is a little long it is an excellent summation of the House Republican position, so here it is:
"Madame Speaker:

"If you didn't get the message today, I will repeat it one last time.

"A $2.2 billion surplus ought to be enough. A 9.8% increase in spending ought to be enough.

"The average person out there has figured it out. But the Democrats in this chamber have not.

"And we are trying to figure out if this bill is shameful or shameless in all of its tax increases.

"Madam Speaker, we have a Certificate of Death for this bill before us today. It is frankly a waste of our time, as Rep. Pelowski has said, in marking up a bill that is going to meet the fate of a veto.

"Every single member of this Caucus will sustain it, and I would suspect that some folks on the other side of the aisle, in the Democratic Caucus, would be very uncomfortable in voting for an override as well.

"You are asking for $784 million in new taxes while we have a budget surplus.

"You are asking for a new gift tax to go after dead people. Thank you, Rep. Joe Mullery of Minneapolis.

"You are raising taxes by hundreds of millions of dollars on job providers. You get less of what you tax and more of what you subsidize. You are going to tax job providers more, so you will have fewer of them in this state . . . and fewer jobs.

"You have people on the Democrats' side of the aisle who say they are pro-jobs, but they are going to vote against job providers today. That is like saying you are pro-egg, while you are voting against the chicken. Where in the world do you think jobs come from? They come from job-providers, from growing markets.

"You are asking for $18 million more in tobacco taxes.

"You are asking for $4 million more in taxes on contractors.

"You are asking for millions more in a tax on snowbirds, as I call them.

"And of course, you put back in the tax on hockey tickets after we debated that for hours the other night and found another way to fund the hockey museum. You just couldn't help yourselves, could you? We shamed you into removing the tax the other day, and you snuck it back in. Congratulations. The 10-year-olds who are going to hockey games get to pay higher taxes because the Democrats need more of your money. I didn't know all those 10- and 15-year-olds around the State of Minnesota who are going to hockey games were "rich" people.

"Don't try to fool the people of this State, riding into town with your square wheeled wagons and trying to sell the elixir of high taxes.

"The elixir of high taxes is not selling. If it was, you would see 90 plus votes on the board for this bill. You will be lucky to get 72 votes [not a bad piece of forecasting; the bill got 75 --kb] , because people are not buying the elixir of high taxes.

"Where are the DFL moderates? Where are the people who campaigned as fiscal moderates last year? Was it just rhetoric, or was it reality? Let's look at some quotes, shall we?

"Rep. Paul Gardner of Shoreview was quoted as saying "I don't envision suburban Democrats going for an income tax or sales tax increase." Indeed, he won't be in office two years from now if such tax increases take place. It was a pleasure to serve with you, Rep. Gardner. Your Caucus is going to throw you under the bus wheel of tax increases.

"Speaker Kelliher, you were quoted at the Chamber dinner as saying "we can do it with what we have."

"Mike Hatch was quoted at the State Convention as saying "we can do this without raising taxes."

"Rep. Tony Sertich said the $530 million in additional money the new DFL programs would need "is well within the growth of the state."

"At the State Fair, Rep. Sertich and then-Minority Leader Kelliher said no tax increases would be needed, although they promised to push for collecting currently-unpaid taxes.

"Gary Eichten on Minnesota Public Radio asked the Speaker "other than a possible gas tax increase, do you see any need to raise taxes in the next couple of years?" Madam Speaker, you answered "No."

"Madam Speaker, at another event, you said "increasing taxes is not a top priority." You also said "I don't foresee any major changes in our taxing structure on business."

"Two days after the election, Speaker Kelliher also said that she did not expect Democrats to try to raise the state income tax, which House Republicans succeeded in cutting twice shortly after they took control of the House in 1998. Madam Speaker, you said "we are a fiscally moderate caucus."

"Oh, really? What's the definition of "fiscal moderates" these days?

"We get $1 billion of tax increases proposed by the Speaker and the House Democrats.

"The voters of the state voted for one thing last fall, and now we're being sold a bill of goods, and they're not buying it.

"Here is the language of the new DFL tax form: "How much money did you make last year? Now please send it in."

"You are offering unsustainable spending increases.

"You are offering unsustainable tails, or spending in future years.

"You are offering unsustainable budgets.

"And now you are offering unsustainable tax increases.

"You are living in a fantasy land. You are living on Gilligan's Island, and you are trying to figure how to get off. And it is not working. The people are not buying it.

"Our positive agenda in saying no to the tax increases today will result in more good-paying jobs, growing our economy, and letting people keep more of their hard-earned money.

"I know that he who promises to rob Peter to pay Paul will always have the support of Paul. The robbers are here today.

"But you are robbing people from throughout the state to make government bigger. You are robbing St. Peter to pay St. Paul.

"But you are also robbing Minnetonka, Rep. Maria Ruud and Rep. John Benson.

"You are also robbing Woodbury, Representatives Julie Bunn and Marsha Swails.

"You are also robbing Rochester, Representatives Kim Norton, Andy Welti, and Tina Liebling.

"I think all of you Representatives are good people and wonderful personalities. But at the end of the day, you are empowering liberal leaders to take more money out of your constituents' pockets.

"At the end of the day, you are empowering liberal leaders who said one thing last November, but are doing something terribly different today.

"It is not fair to the voters.

"You are simply taking the tax ax to the golden goose that lays the golden eggs of jobs in this state.

"You are going to have one big feast of property tax reductions . . . not in this year . . . but surprise, surprise, in 2008, the election year.

"You're going to have a nice big feast at the expense of the taxpayers while jobs continue to move out, while people hide income, while people hide from the tax collectors. Unfortunately, many of the people who create jobs are frankly just going to move out of the state because of the policies that you people are setting up today.

"Madam Speaker, we heard a lot about bipartisanship last year. There is no bipartisanship in or for this Tax Bill. There is not one Member of the Republican Caucus who is going to vote for it. And the Governor is going to veto it.

"Madam Speaker, recently you and I spoke to the Citizens League at the Allianz facility in Golden Valley. Rep. Winkler was there, and so was Rep. Garofalo. We were asked on tape in front of the Citizens League "will there be more income taxes." There were lots of people there who make more than you or me. And the answer from the Speaker was "No."

"Madam Speaker, you were right when you said that there will not be income tax increases this year. But the reason is not because of the Democrats. The reason is in spite of the Democrats. The reason there will be no more income taxes this year is because of the Governor and the House Republicans. That is the second part of the answer.

"And I think everyone in this Chamber knows that. Rep. Pelowski knows that and he was wise enough to tell everyone.

"Don't waste your time. The Legislative session is over three weeks from Monday, and we are arguing about a tax increase that is not going to happen. It is not going to happen.

"Madam Speaker, we did not offer amendments to this terrible tax bill, and I will tell you why. You and I grew up on farms. I grew up on a hog farm and you grew up on a dairy farm. We know that you do not pay a veterinarian to come out to the farm to save a hog that is already dead. This tax bill is a dead hog. The Senate will push through one that is even worse, and the Governor will veto it.

"Members, this hog is dead. It is dead on arrival. Vote Red."

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Do professors have "qualified immunity"? 

On Friday on Phi Beta Cons, David French posted the disappointing outcome of a suit he was trying to protect the rights of former Temple University student Christian DeJohn. French's version of the facts:

In late 2002, Christian was deployed overseas to serve as a peacekeeper in Bosnia. While overseas, Christian received a series of anti-war messages from a university listserv. While Christian didn�t dispute the right of professors or anyone else to protest the war in Afghanistan or the (at that time imminent) war in Iraq, he also didn�t want to receive such messages while in a hostile fire zone. At trial, Christian testified that he wrote back to his department chair and asked to be removed from the e-mail list.

When Christian returned home from Bosnia, he found that he had been expelled from the university. When Christian challenged the expulsion, the university re-admitted him, claiming computer error. What Christian didn�t realize (at the time) was that the attitude of two key professors � his department chair and academic advisor � had dramatically changed towards him.

In university e-mails, these professors variously described him (among other things) as a �fool or liar,� a �gnat,� �mentally unstable,� and �trained to kill by the U.S. Army.� The department chair hoped he�d �self destruct,� and his academic advisor (in a later message that attempted to justify his actions against Christian) claimed that Christian was �obsessed� with �liberal bias.� One of his professors even went so far as to urge the department chair contact key Temple alumni (individuals who would be in a position to hire Christian after he graduated) and tell them that Christian did not represent Temple�s �best and brightest.�

The lawyer for the two members of the history department is quoted in the Chronicle of Higher Education (temp link, permalink for Chron subscribers) as finding Mr DeJohn a "marginal learner, barely passing" and that his masters thesis "flabbergasted" the faculty. So while French is certainly trying to bring out the worst of DeJohn's professors' behavior, they aren't exactly hiding their dislike for the student.

Two facts also bear notice: First off, Mr DeJohn was called a "peacekeeper", which I guess is the word of art for a sergeant in the National Guard who pulls overseas duty. So this is potentially retaliation against a member of our military. Second, Mr. DeJohn was someone who testified at Temple during the hearings surrounding Pennsylvania's inquiry into political bias and the possible need for an Academic Bill of Rights.

The judge threw this case out, though. He said there was no evidence that the chair had retaliated against the student -- a finding that I can't judge based on the information received -- but this from the Chronicle raised my eyebrows:
And the judge said that, while the jury may have discerned some evidence that Mr. Urwin had retaliated against Mr. DeJohn, the professor deserved "qualified immunity," which means that he behaved toward Mr. DeJohn in a way that could reasonably be seen as within his rights.
Excuse me? It is within one's rights to retaliate against a student? So if a student is retaliated against by a faculty member and can prove it in a court of law, a faculty member may nevertheless have some kind of immunity from prosecution for violating a student's due process rights?

French has indicated he may appeal the ruling. One hopes the rights of students will be upheld.


Friday, April 27, 2007

Guns, Virginia Tech, and Thugs 

After the shootings at Virginia Tech (VT), along with millions of Americans I thought about the 2nd Amendment to our US Constitution, the right to bear arms. Contrary to the wishes of many on the left, the United States Court of Appeals for the DC Circuit ruled that this right is for individuals, not just the various branches of our US military. (It will most likely go to the US Supreme Court.)

So, just why is this right to bear arms important?

One of my former college students was an immigrant from Addis Ababa, Ethiopia. He is a very bright, articulate young man. As with most of my African students, he fluently speaks three languages, one of which is English. He shared the following stories with me.

As a teenager attending junior high school in Addis Ababa, he and his friends were often pursued by what he called the government "goon squad" on their way home from school. If they did not outrun the thugs, they were kidnapped and sent to the mine fields between Ethiopia and Eretrea - where they were forced to walk the fields to trigger mines set by enemies. As he said, the only time his friends returned alive was when they were missing an arm, a leg, an eye, etc. He was lucky, he was always able to outrun the thugs.

Part two of the story was this. His father kept a loaded handgun with him at all times in their home. His dad's logic was that even if the goon squads entered their house, he (the dad) could take out one or two of the thugs before being murdered himself.

In spite of our problems, in spite of many of the leftist, control obsessed politicians, we do live in a safe country - just ask a legal immigrant. Our 2nd Amendment is one of the key reasons we are free.

First and Final Word 

The Strommer is on his back in hospital, and the Taxpayers League has called up the minor leaguer. The great thing about Taxpayers League Live is that the TPL staff gets great guests. This will be no different. I get to interview state representative Kurt Zellers from Maple Grove, a Republican likely shellshocked from his treatment to the marauding band on the House Tax Committee. He'll be on after 9:15. Then it is my honor to interview not one but two U.S. representatives, John Kline and Michele Bachmann after 10am.

If you miss that, you get the usual dosage of the Final Word at 3pm. (The interregnum of John, Chad and Brian at 11am, and Mitch and Ed at 1pm, will allow me respite to get my NFL draft fix and a chance to watch Ed burn his Brady Quinn ND jersey after he miraculously becomes a Detroit Lion.) Michael probably has all there is to know about the Swanson Mutiny, and I got a thing or two about this smoking ban thingy that I need to get off my chest.

Four hours? Heck, I eat four hours for breakfast.

Be sure to listen in at AM1280 the Patriot (also online.) And if you miss all that, archives for NARN and TPL are available.


GDP numbers -- what impact housing and exports have 

The first quarter GDP figures are out, and a 1.3% growth rate looks pretty bad, almost half of the previous growth rate. But what interests me is the breakdown in contributions to GDP growth. Personal consumption held its own, contributing 2.6 percentage points to GDP growth this quarter versus 2.9 last period. So household spending has been fine. Residential investment knocked off almost 1.0 percentage points from that, but that's less than was in the fourth quarter. Business investment contributed a little more of the decline. Much of the news seems to be focusing on housing.

What really caught my eye was the contribution of net exports, which swung from contributing 1.6% to growth in the fourth quarter last year to knocking off 0.6% this year. Reuters at least touches on that. That swing had more to do with slowing exports than increased imports. This may stay the hand of the Fed in raising interest rates any time soon (higher interest rates increase exchange rates and make our exports less competitive.)

Worth noting: When this number is revised (and there will be two such revisions) the trade figure is the one that changes the most. So I expect this GDP estimate to be rather volatile to trade revisions.


Profiles in courage, Republican edition 

"Those who deny freedom to others, deserve it not for themselves; and, under a just God, can not long retain it." -- Abraham Lincoln.

"Minnesotans have asked for this because they're tired of breathing smoke in public places," said Rep. Steve Gottwalt, R-St. Cloud. "The only way that this ban works is across the board with few exceptions. Across the board, make it even."

"Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same." --Ronald Reagan

"Today we're talking about the freedom to breathe for those people who do not smoke," said Rep. Dan Severson, R-Sauk Rapids, one of the bill's authors. "Forty years ago you could smoke anywhere. Twenty years ago they banned it out of airplanes. Ten years ago California put in a smoking ban. This is time for this particular bill."

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Where to tap the money to make kids safe 

Reading Peggy Noonan this AM:

We are frightening our children to death, and I'll tell you what makes me angriest. I am not sure the makers of our culture fully notice what they are doing, what impact their work is having, because the makers of our culture are affluent. Affluence buys protection. You can afford to make your children safe. You can afford the constant vigilance needed to protect your children from the culture you produce, from the magazine and the TV and the CD and the radio. You can afford the doctors and tutors and nannies and mannies and therapists, the people who put off the TV and the Internet and offer conversation.

If you have money in America, you can hire people who compose the human chrysalis that protect the butterflies of the upper classes as they grow. The lacking, the poor, the working and middle class--they have no protection. Their kids are on their own. And they're scared.

And they're in public schools. If you wanted to keep them safe and you had a school voucher, would you keep them there? Public schools have to accept all students, government education supporters would say, so it's not fair to make that comparison. But would it stay that way? If you could opt your kids out of that school thanks to vouchers, do we really believe the public schools would not do more to identify and isolate dangers in their schoolhouses?


Thursday, April 26, 2007

Test the sock 

That's the only way to answer the question of whether Curt Schilling really bled red that night in 2004. The sock is on display in Cooperstown. This suggestion came up on Mike and Mike, and it seems only reasonable. If it's positive for blood and not paint, Gary Thorne apologizes, and the Orioles can decide whether or not he keeps his job.

Lots more coverage linked from The Boston Sports Media Watch.

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This is the kind of coverage we need 

Want to see how the DFL behaves in our state legislature? Michael has a video of one DFLer who is for against the smoking ban referring to another DFLer who is against for the ban "makes Saddam Hussein look reasonable." It takes a senior DFLer to stand up and rebuke the first fellow as "a little out of line, even for the customary standards of this house" and the first fellow offers a non-apology apology.

It is my hope that more YouTubing of the Minnesota Legislature would allow Minnesotans to see who currently represents them. And, with luck, recoil.

UPDATE: I reversed the roles of Rukavina and Huntley. Coverage made the StarTribune.

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Outsourcing professors 

There is a proposal at the University of Illinois to create an online program that could scale up to 70,000 and avoid many of the costs of bricks and mortar ... and mortarboards.
When Global Campus was proposed, in May 2006, officials envisioned it as a corporation that would rely on part-time instructors, and be free of university regulations.

Administrators said the setup would reduce faculty expenses. Operations like payroll and other tasks could be outsourced, presumably allowing the Global Campus to run more efficiently than the regular university. The online institution would be nimble, responding to market pressures with frequent revisions in the curriculum. By comparison, proposed changes in the traditional university curriculum are vetted by many scholars in a time-consuming process.

Faculty members complained that the project treated them as irrelevant.

"It presented a huge danger, not only in and of itself but as a kind of model for the university of the future," says Cary Nelson, an English professor at Urbana-Champaign who is president of the American Association of University Professors.

Faculty members would have had no say in curriculum development or the hiring of instructors, he explains: "It was the development of a whole segment of the university completely outside faculty input and completely outside shared governance."
The university has relented and created a partnership with the faculty union. Yet there are online courses at some of its campuses, such as Springfield. (
Source, hat tip: loyal reader JW.)

What will become of these online programs and why would the universities of Illinois and Maryland, among others, push for them? We turn again to Richard Vedder, reporting from a conference studying collective bargaining in higher education:
The reality is that spending at American universities is not rising as rapidly as in the salad days of the 1950s or 1960s, but it is still growing. It is true that a smaller proportion of that spending is going to the professoriate. To the attendees of the ... meeting, on average, the solution is to get the taxpayers to fund higher education more generously, rather than to reallocate university funds back to historic proportions with respect to spending on instruction.

To be sure, there were pockets of realism and analytical thinking. Dan Julius, the Provost at Benedictine University, called for more serious academic research on labor issues, suggesting good ideas for studies. For example, has the spread in the use of part-time non-tenured ("contingent") faculty led to reductions in academic or instructional quality? What is the relationship between academic quality and unionization? Good questions, deserving serious scrutiny. And Ernst Benjamin, who runs the American Association of University Professors (AAUP), saw a potential dilemma. In pushing hard for higher salaries and fringe benefits for mostly tenure track full time faculty, unions increase the incentives for institutions to hire more adjunct faculty with low pay and fringe benefits. He came close to suggesting that unions are promoting the demise of their own membership by driving universities to lower cost substitutes for their services.
Which takes us to online learning.


Wednesday, April 25, 2007

Most interesting thing I read today 

Rich Vedder:
If Becker were right on the economics of higher education, one would expect spending on colleges by governments to positively impact growth rates. The work I am doing, now in conjunction with Tony Caporale and Whiz Kid Jonathan Leirer, convinces me that spending on higher ed by state governments has, at the margin, no positive growth effects whatsoever, and probably even negative ones. As to the other dimensions, do college graduates smoke less (and thus live longer) than non-college graduates because of what they learned in college, or because they are smarter and more disciplined? ...

If James Bryant Conant, former Harvard president, had gotten his way, we would today have perhaps five or at the very most 10 percent of the adult age population with college degrees. Would we be poorer, less healthy, etc.? Maybe, but to me the evidence is very far from clear. As Posner notes, many studies on these issues were based on K-12 results, and the marginal benefits of subsequent education may be quite different than that associated with basic literacy and numeric skills.
Links to Becker and Posner added. I'm hoping Vedder posts this paper of his soon.

Sorry to be shorter today, but a day from hell it was, and now the final papers for senior seminar come tomorrow. Rest is required, though one more blog may come from me tonight if I can extract it from the muse.

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It'll violate your rights just a little 

Several posts by others today on the StarTribune's defense of Minneapolis Community and Technical College's purchase of foot-bathing facilities for its Muslim students. See for example PowerLine. Mitch asks a very good question hypothetically of MCTC's administration:
Since washing feet - the feet of others, in this case - has a tradition in Christianity that was practiced by Christ himself, I�m wondering; would I, a Christian, be able to wash feet in this foot bath (following Christ�s example, I�d be washing the feet of others rather than my own - a typically-Christian model of self-abnegation, if you know what I mean)?
I suspect I know the answer, and there'd be a way for MCTC to differentiate re-enactment of the Last Supper, an annual event, with the five-times-daily washing required of observant Muslims. So perhaps Christians would get access only on Maundy Thursday. To be frank, that'd be enough for me.

But the part that I've been wondering about is in the STrib editorial,
If MCTC were setting some unusual precedent, we might worry. But it's not. St. Cloud State University, the University of Minnesota-Duluth and at least a dozen other colleges around the country have installed small foot-washing facilities for their devout Muslim students -- at modest cost and often using student fees rather than state revenues.
If student activity fees were purely voluntary payments, distributed democratically by a student government, I might agree with the distinction the editors make. But this is a false dichotomy. It takes as little as 7% of the student body to impose fees, and student government elections are typically with less participation than that. After voting a fee, the university takes the money from students and deposits it into an account for them. So the state is involved in enforcing the fee, and the university does have oversight. I think the distinction between student fees and state revenues is less than one would believe.

At SCSU, there are Friday prayers for Muslims in the student union; it is my assumption that to do so requires the washing of feet, and perhaps a facility is provided. It's not clear to me if it is provided by the Muslim Students Association, or the Arab Students Association, or by student government more generally. There are 17 student organizations on campus that are religious, most of them Christian. The question of who paid for the washing basin is not terribly important. That it's just a few dollars, and it comes only from student activity fees, doesn't help us understand the lack of equal access to religious practice on our campuses. The question worth asking, like Mitch does, is whether each enjoy equal access to the fees collected by the state on behalf of a student government that would not pass the test of being representative even if you had Jimmy Carter judging them. I have not heard any reports like this, so I assume nothing has happened, but I do not know. (If you are an SCSU student with an opinion on this and wish to remain anonymous, drop an email at comments-at-scsuscholars-dot-com)

It's not an idle question. FIRE has a list of cases in its past that cover religious liberty on college campuses. Most, though not all -- LSU once tried to not recognize a Muslim student group because it had the requirement that its members be Muslim -- have pointed at restrictions on freedom of religious expression of Christianity. It is that backdrop that causes questions to arise when we find dollars spent on public university campuses in support of religious practices of others.

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Tuesday, April 24, 2007

John Stossel at the Univ. of MN, Mpls. Campus 

John Stossel of ABC's 20/20 was in MN for a two-day college tour. King wrote about his talk at St. Johns, in Collegeville, MN on Monday, April 23. Tonight, Stossel spoke at Northrup Auditorium in Mpls.

The title of his talk: "Freedom and Its Enemies"

One can summarize his views as follows:
The touted belief/myth that the free market economy is so cruel and unfair that government must take over is simply wrong. Frauds avoid the rules and regulations. But, once it's apparent the fraud will lose, they move on to something else. In the meantime, creative people learn and comply with all the rules. This is creative time wasted; they get stifled by government regs. Companies in business for the long haul pay for all the regulations as do the consumers. Good companies that serve customers well, grow; those that don't, die.

Ralph Nader originated the idea that commercial TV would not do consumer programs because TV would lose advertisers. What happened? Consumer programs thrive on commercial TV and are non-existent on public TV because the PBS regulating boards are too scared to try anything.

People have been told by government and tort lawyers that business is a zero sum gain. In reality, business is a win/win. You buy a cup of coffee, you hand the server your money. You get your coffee, the server gets their money. "Thank you" and both of you are happy.

Free enterprise has lifted more people out of poverty than any other economic system.

Fearful and bad reporting encourage people to be fearful.

In summary, in addition to our military heroes, America's other heroes are free people, the inventors, entrepreneurs, the creative geniuses who design, develop and deliver innovation after innovation after innovation - not the government regulators.


Taxation, the peddler class, and the StarTribune 

A story of despair...

I was in the Cities this weekend and as fate would have it a StarTribune was in front of my hotel room door Sunday morning. I could have returned it for $.88, I was told, but decided to keep it. A Sunday morning with a good sports section during baseball season, and a hearty cup of coffee, is a pleasure even if the rest of the paper is crap.

Alas, my eyes insist on busyness at all times -- this will be their ruin, I know -- so eventually I got around to the editorial page, whereupon I found this.
Politicians often find it convenient to assert that taxes are paid by two kinds of entities -- businesses and people. Economists -- and this page -- don't buy it. We maintain that all taxes are paid by people.
Search the internet for "corporations are people too" and you get a lot of leftist bilge. But the editorial is correct -- all taxes are paid by people, since entrepreneurs are people too.
Tax a business' property, payroll or purchases, and to the best of its ability, that business is bound to pass the bill along to its customers and employees, in a way that bears little relationship to ability to pay.
So it only took the third sentence to go awry. Businesses don't pass along all their taxes. Some they do, but only by willingness to pay. In a free market, when you shift a tax onto me, I can say no. I don't because I value the good more than the money I give up including the tax (what Stossel referred to last night as the "weird double-thank-you", where each party to a transaction thank the other for completing it. That still happens with a tax, just less often, proof that some social welfare is lost when you tax goods and services -- there are fewer double thank-yous.)
Of late, some Minnesota politicians -- including Gov. Tim Pawlenty -- have been giving this argument an odd twist. They argue, in effect, that the one state tax that is clearly based on ability to pay -- the personal income tax -- is really a tax on business. For that reason, they say, the Legislature should not raise taxes on the state's highest earners, even though these taxpayers now pay state and local taxes at a lower effective rate than other Minnesotans. Those fortunate few are job producers, the argument goes, and making such businesses pay an equitable share of taxes would drive this flock of golden geese away.
"In effect" are weasel words. They know we don't really argue this, as they admit:
Their contention is grounded in this much reality: Small businesses, particularly sole proprietorships and partnerships, are typically organized in a way that allows their profits to be taxed only after they have been passed through to their owners, as income.
How many could this be? It's certainly many. Of the 2.4 million tax returns filed in Minnesota in 2000 (last year I could find online), 343,249 of them listed business income on their individual returns and thus would be eligible to pay the higher rate the DFL proposes. About 47,000 of them had business income over $100,000 that year, 9,000 more than a quarter million. By comparison, there were less than 30,000 100% Minnesota corporations in 2001. So it's not an insignificant amount.
But small businesses come in all sizes and profit margins. The vast majority of their owners report incomes well below the thresholds for the new top bracket being considered by House and Senate DFLers. What's more, to thrive, these business owners need the services that tax money buys: education, transportation, public safety and more.
"You can't do it without us!" When I arrived back home after the weekend and picked up my mail I got a copy of Frank Chodorov's "The Peddler as Hero." That peddler, the old middle class, had died by the time Chodorov wrote this in 1962:

The middle class, of the earlier period, was identified by something besides economic status; one thinks of them as a people motivated by certain values, among which integrity was uppermost. The middle-class man was meticulous in fulfilling his contractual obligations, even though these were supported only by his pledged word; there were few papers that changed hands, fewer laws covering contracts, and the only enforcement agency was public opinion. In the circumstances, personal integrity in the middle-class community was taken for granted; anyone who did not live up to his obligations was well advertised and lost his credit standing. Bankruptcy carried with it a stigma that no law could obliterate and therefore was seldom resorted to.

The life of the old middle-class man was, by present standards, rather prosaic, even humdrum, being enlivened only by plans for expanding his business. If he had dreams, these were concerned with getting ahead by means of serving his community better, of widening the scope of his enterprise. But, his personal life was quite orderly and quite free of eroticisms; rarely was it disturbed by divorce or scandal. His sense of self-reliance imposed on him a code of conduct that precluded psychopathic adventures and gave him stability. Orderliness in his personal life was necessary to his main purpose, which was to produce more goods or render more services for the market; that burned up all the surplus energy he had at his disposal.

It never occurred to this middle-class man that society owed him a living, or that he might apply to the government for help in the solution of his problems. The farmer is a particular class in point; the present day agriculturist, who must be included in our present day middle class in terms of income, holds it quite proper to demand of government, that is, the rest of society, a regularized subsidy, even a subsidy for not producing; the farmer of the early part of the century would hardly have thought of that.

The merchant or manufacturer located in the area served by the Tennessee Valley Authority has no hesitation in accepting electricity at rates that are subsidized by the rest of the country, and even demands more of that handout, without any hurt to his self-esteem. The pride of the peddler, the entrepreneur, has left the industrialist who now grovels before legislatures and bureaucrats in search of government contracts, while the independence that characterized the early banker has been replaced by a haughty obsequiousness of the modern financier in his dealings with government.

Indeed, it has become a "right" to demand a special privilege from the authorities � as, for instance, the urgency of professional athletic organizations for publicly financed stadia in which to display their wares; and the man who secures such a privilege does not feel humiliated by its acceptance, but rather holds his head as high as did the earlier entrepreneur who made his way on his own steam.

Perhaps the StarTribune editorialist is correct: We have raised a generation of middle class entrepreneurs that are willing to game the system, seek favors from government to line their pockets. If so, they have only themselves to blame. You now must share your wealth with the other guys in the bargain, and the other side has a monopoly on using the police to enforce their will. But there are certainly some that do not. Why are they to be punished by the force of taxation? The editorialist continues,
The argument that those who have profited most handsomely in the environment those services helped create deserve to pay a lower effective tax rate than other Minnesotans, including most other business owners, doesn't wash. Neither does the presence of business owners among the state's top earners, a group that includes ballplayers, CEOs and top professionals of all kinds, warrant a lighter tax burden for the lot.
No, you must all pay to Leviathan. Bow before your master.
What Pawlenty and other Republicans are invoking is trickle-down economics, a theory that has remarkable staying power in this country given how poorly it has aligned with experience.
And yet count the countries of Eastern Europe that have adopted a flat tax! These countries are run in many places by ex-communists. And it really fooled this guy:
Our true choice is not between tax reduction, on the one hand, and the avoidance of large Federal deficits on the other. It is increasingly clear that no matter what party is in power, so long as our national security needs keep rising, an economy hampered by restrictive tax rates will never produce enough revenues to balance our budget just as it will never produce enough jobs or enough profits� In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now.
This is not Reagan, but John F. Kennedy, 45 years ago.

The editorialist continues,
According to trickle-down notions, states with high taxes and progressive tax structures should be flagging economically. The evidence is otherwise. The state with the highest per capita taxes, Connecticut, had the highest per capita after-tax income in 2006; conversely, low-tax states such as Alabama and West Virginia also rank at the bottom in after-tax personal income.
This is of course the post hoc (or perhaps in this case post non hoc) fallacy. There's ample evidence to the contrary, if you wanted to look. In short, any paper that shows no effect of state tax rates on growth also shows no effect of state spending on growth, meaning all those "investments" the DFL wants to make have a zero return. Those things that made high-tax Connecticut grow also made Christine Whitman's New Jersey grow after she passed 30% tax cuts. The same can be said for southern states. This helps explain the last paragraph of the editorial:
But Minnesota doesn't have to look to other states for a model. It need only look to its history. Decades of higher-than-average taxes and spending on public services helped Minnesota become the most prosperous state in the Midwest in the 1990s. Only since big tax cuts began to squeeze those services in this decade has state income growth lagged behind the national average. That trend needs to be altered, and pinching public services in order to perpetuate sweetheart tax treatment of the wealthy won't do it.
There is no sweetheart tax treatment. Nominally, we've built in a good deal of progressivity; the "sweetheart tax treatment" is the ability of Minnesota businesses to shift taxes onto labor and consumers. I keep coming back to the same point -- raising the taxes to compensate for shifting only leads to more shifting. The only way to control shifting is to control prices and wages. That's been tried before, and the Soviet Union now lies in the dustbin of history.

The reason Minnesota is lagging behind the nation now is a shift in demographics and in comparative advantage. Minnesota used to have 16% of its workforce in manufacturing; now it has less than 13%. This is a national trend, but it hits Minnesota (and most of the upper Midwest) harder than it hits the rest of the nation, and St. Cloud harder than most of Minnesota. This is about 50,000 jobs lost in that region. What area is growing? Health care. You can say this about any state in the old Rust Belt. It has nothing to do with tax cuts or Ventura or Pawlenty or our own history. Welcome to the country that is getting older, particularly if we keep trying to keep immigrants out of it.

Those older people will remember the simpler time, and may be the people who are remembered by Chodorov,

And so it has come to pass, during the second half of the 20th century, that the ethic of the peddler class has been replaced by the ethic of mendicancy. I am inclined to the thought that the change indicates a deterioration of the American character; but, then, I am loyal to my youth, as is every older man, and may be prejudiced.

It may well be that social security is an advance over self-reliance, that the individual prospers better under the ministrations of the bureaucrat, that juvenile delinquency is a social rather than individual malady, that individual proficiency is a social curse, that freedom is indeed the right to feed at the public trough. The young people, those who were born or got their rearing during the New Deal era, do not question that concept of freedom, and the professors of economics, psychology, jurisprudence, sociology and anthropology write learned books in support of it. Therefore, it must be so.

Any attempt to revive the old concept of freedom � that it is merely the absence of restraint � would be a fatuous undertaking; it would be like trying to "turn back the clock."

Yet, one cannot help speculating on the future. When the present generation, well inured to the Welfare State, shall have grown old, will it not also write books on the "good old days," even as this book speaks lovingly of the ethic of the peddler class? And what new ethic � every generation has its own � will these books decry? Maybe it will be the ethic of the totalitarian state. Who knows?

I'll link again to Chodorov and to the StarTribune and ask, has that ethic already come to pass?

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Boris was good enough 

I recall sitting in a cabin up north with Mrs. S one morning in August, 1991, and reading in the news of the tanks in the streets of Moscow and the guy who stood on top of them. Shortly after then, the Soviet Union collapsed and Russia's new leader was Boris Yeltsin.

The blogosphere is full of encomiums to Yeltsin, and I don't have a particular personal story to share about him. I have met several economists who worked with him but never the man himself. We know that when he said in October 1991...
We have defended political freedom. Now we have to give economic [freedom], to remove all the barriers to the freedom of enterprises and entrepreneurship, to give the people possibilities to work and receive as much as they earn, after having thrown off bureaucratic pressures.
...that he never really meant it, or at least he didn't know how to make it happen. As Leon Aron noted several years ago, from the moment Russia entered its own life out of the Soviet Union, Yeltsin the populist and Yeltsin the reformer were constant adversaries.

While in Ukraine in 1996 I watched Yeltsin's re-election; given up for dead by most observers early in the year, he rallied back from two heart attacks and a moribund political party by being the populist again, by claiming his own cabinet had not provided for social protections, handing out huge unsustainable increases in pensions, playing to nativist fears with Chechnya, etc. (I argue with people still that the Russian bond defaults in August 1998 were predictable consequences of Yeltsin's electoral largesse, and the West's loans to him the worst part of our relations with post-Soviet Russia to that time.) Who can forget the man who danced his way back into a race he was sure to lose? The populist was needed at that time in order to pull out the victory. Alas, the energy expended left Yeltsin the reformer too feeble to act if he had wanted to ... and we'll never know if it was because of that or his desire to feather his own bed on the way to retirement.

I've never been a fan of populists, and Yeltsin was at his peak as a populist and that's how most will remember him. However, the reforms he tried and failed to create, particularly in the Gaidar period, were a legacy that will endure well past the tapes of the dancing candidate. A flawed man who could not reform his own country, but good enough to provide a map other countries followed to successful transition.


On becoming a pawn 

Readers might remember my trip to Armenia last January, in which I wrote:
The purpose of the conference I spoke at was to assess the economic and social consequences of opening the border between Armenia and Turkey, closed by Turkey as a response to the war between Armenia and Azerbaijan in 1993. Closing the border is a political decision. Now my job was just to talk about what the effect on foreign investment would be in Armenia if the border was re-opened -- the opening would be, in my view, a representation that the risk of external conflict was reduced in the region. But we were told that we could not talk about politics at all. There was the acting ambassador here to make sure we didn't and when he left the local USAID guy kept watch on the proceedings. The local community is upset that the issue cannot be raised. Worse, the Turkish scholars here -- who either didn't get the memo or weren't obeying it -- tried to say something about how to solve the political issue. For this, they have been hammered by the more nationalistic Armenians here. In one sense I feel bad for them, but frankly there's one that keeps putting his foot in his mouth, so to heck with him. Yet if the US government wasn't so nervous as to place an imperfect gag order, none of that would have happened. They would have debated, and at the end hopefully we all have food and drink.
A few weeks ago people believed Speaker Nancy Pelosi might bring a bill to the floor of the U.S. House that would recognize the massacres in 1915 in Turkey of Armenians as a genocide. Executive branches for years have begged Congress not to pass these rules, as Karoun Demirjian notes in today's Chicago Tribune, and this year is no different.
In a letter to Pelosi and House Foreign Affairs Committee Chairman Tom Lantos (D-Calif.) last month, Secretary of State Condoleezza Rice and Defense Secretary Robert Gates wrote that Turkey -- which borders Syria, Iraq and Iran -- is "a linchpin in the transshipment of vital cargo and fuel" to U.S. troops in the Middle East.

A negative reaction from Turkey to a resolution on the Armenian genocide "could harm American troops in the field, constrain our ability to supply our troops in Iraq and Afghanistan, and significantly damage our efforts to promote reconciliation between Armenia and Turkey," Rice and Gates wrote.
That letter included this remark:
Efforts such as the recent USAID-supported conference in Yerevan entitled "The Economic and Social Consequences of Opening the Armenian-Turkish Border," which was attended by both Armenian and Turkish civil society representatives, demonstrated that the U.S. approach to this difficult issue is, indeed, working.
That was the conference I was at. The board of the organizing research group (of which I am a fellow, but not a board member) responded that the letter was wrong,
With the full agreement and insistence of the U.S. government donor supporting it (USAID), all political issues were intentionally kept off of the conference agenda, and the proceedings were run in a manner to maintain an exclusive focus on non-political issues. Therefore, as an apolitical academic event that deliberately avoided the topic of Genocide recognition, the conference cannot legitimately be described as a component of a process of reconciliation. That process must fundamentally address a number of political issues for which the conference was not designed.
It's intriguing to get caught as a pawn in this game. But it's mostly sad. Today marks the 92nd anniversary of the day when 250 Armenian intellectuals were rounded up in Istanbul, marched out of the city and shot. The systematic massacres began the next month. (I note that my father's family roots by this time had left Turkey; my grandfather had fled to America for four years already, and my grandmother to a Beirut orphanage after losing her father in an earlier pogrom.) Regrettably the condemnation of Jewish Holocaust deniers has never been visited on a worldwide scale on those who deny the Armenian genocide (type the last two words into Google and you'll find denial sites quite easily.) Indeed, in the interest of Israeli-Turkish relations, even the Knesset has rejected a statement of recognition.

Regrettable even more is that a topic that should be left to historians and archaeologists has instead become a "process" that "must fundamentally address a number of political issues". Letting politicians decide history is how we got into this mess; hard to believe there's no other way out.

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Stossel at St. Johns 

St. John's University/College of St. Benedict had John Stossel on its campus last night. I attended with about 250 other people. The talk was put on by the schools' College Republicans and the Students Fostering Conservative Thought.

If you watch most of Stossel's 20/20 specials, you probably know his views on economics, which was the focus of last night's talk. It was largely a blend of "Greed" and "Are We Scaring Ourselves to Death?" A few things I noted of interest to me:
  1. He made a specific point to say "I'm not a conservative, I'm a libertarian." This meant he was in favor of gay marriage, mildly pro-choice, and anti-interventionist. On the other hand, he was not as libertarian on the estate tax (something to the effect of "a tax on wealth over $2 million upon death doesn't bother me") or on immigration (several references to "islamofascists" coming over the border trying to kill us.) So he has a very mixed view of Iraq, favoring a muscular presence in the region but doubtful of our abilities at nation-building. That view, by the way, is not far from mine.
  2. His description of socialist economies was summed up by a picture of a Trabant. (This site is by a fan of the ugly little boy.) They are bad vehicles, but at least everyone had practice repairing one, making yours on the side of the road that much closer to running again.
  3. He's a bit dry; his best side is taking questions -- fast and direct, gets through a lot -- and audience interview. For a guy who is probably a five-figure speaker, he doesn't look all that comfortable speaking.
If you're in the Twin Cities, you can catch him tonight at Northrup Auditorium at the University of Minnesota, at 7pm.

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Monday, April 23, 2007

When businesses buy, they want results 

In his weekly signed editorial, St. Cloud Times editorial page editor Randy Krebs is asking what businesses are willing to pay for education.

For the past several years I have regularly heard from leaders of influential business groups that among the biggest challenges they face in Minnesota is a shortage of qualified workers.

Now it seems logical to me that this shortage must be at least partially due to the state's education system. After all, Minnesota businesses essentially hire people after they have had adequate education and training, the bulk of which comes from the state's birth-to-12 and higher education systems.

So if this system is not providing these workers, I would think businesses would be among the loudest voices calling for the state to amend its education system so that potential job applicants are qualified, so they can be hired, so those businesses can have the best chance at succeeding.

It is true that businesses complain about the lack of qualified workers. I've said it myself, both on this blog and in various issues of the Quarterly Business Report. (Full disclosure: Randy's paper publishes the report.) Though I again warn people that what businesses mean often when they talk about qualified workers includes problem-solving skills that don't come from formal education (a few manufacturers say they look for young people from farm backgrounds, where improvisation is a necessity), and often about basic skills like showing up for work on time, dressing neatly, etc. It isn't necessarily about K-12 education.

But surely part of it is. And businesses HAVE been among the loudest voices. And they do pay more. The problem is that what you want in return is accountability. Where is the evidence that these additional dollars spent (per student, inflation adjusted) have produced better results? If they haven't, why haven't they. Krebs asks,

And while I'm not so na�ve to believe "more money" is the main answer to what ails education, I've also had enough recent school experiences to see that this state is trying to provide a 21st century education using a funding engine built in the 20th century.

Indeed, if businesses want to avoid a tax increase so badly, how come they are not lobbying so intensely (if at all) to amend state funding formulas to improve outcomes?

You know if their businesses had such problems they would make changes.

They would, but having devoted so much money to this outcome, they might have decided adding money isn't the problem. They might have chosen to reallocate dollars. Perhaps you will not find the analogy so apt, but I see this quite like Jim Souhan's piece on the Vikes and Wolves: You can't spend more money and hope that fixes the problem.

Businesses are willing to invest money to solve a problem when they are convinced that the money spent will actually solve the problem. We spend more and more dollars and get more and more mediocrity. At some point, like the Twins or the Wild, you decide that's enough and time to go in a different direction. Last I looked, those were the teams in the playoffs.

When you get results like this, the answer shouldn't be to bury an income tax increase in the education bill.

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"I'm not hiding anything" guy hides costs of gas tax 

Remember Senator Steve Murphy?
The proposed 10-cent-a-gallon gasoline-tax increase moving through the Minnesota Legislature could end up being higher than that, maybe more than twice as high.

Tucked away in a big transportation funding bill being fast-tracked to a Senate floor vote today are future increases in Minnesota's gas tax that could push it from 20 cents a gallon to more than 40 cents over 10 years, higher than any state's current bite at the pump.

"I'm not trying to fool anybody," said Sen. Steve Murphy, DFL-Red Wing, sponsor of the measure that would increase funding for roads and transit by $1.5 billion a year once it was fully implemented in the next decade. "There's a lot of taxes in this bill."

He seems to be doing a little more fooling these days, for example the article appearing in this morning's St. Cloud Times, arguing that it's fairer to pay for roads by raising gas taxes rather than by bonding as Governor Pawlenty proposes. First, let's remember what else Senator Murphy wishes to tax to pay for his roads, as written in the StarTribune piece I first linked:

� Higher registration renewal fees on future new car purchases, but no increases on currently owned vehicles.

� A half-cent rise in the general sales tax in the seven-county Twin Cities area, imposed without a voter referendum, plus a $20 excise tax on new vehicle sales in the metro.

� Local-option authority for half-cent sales-tax increases in the rest of Minnesota, subject to voter approval.

� Authority for all 87 counties in the state to impose a $20-per-vehicle annual wheelage tax. Three suburban counties levied the current maximum of $5 per vehicle last year.

The DFL has made a huge amount of noise over tax fairness, and what are they proposing to do. Referring back to the liberal's new Bible -- also known as the Tax Incidence Report -- we find the estimate that 44% of the gas tax is paid for by Minnesota businesses. This either raises prices on consumers, lowers the number of workers they can employ, or dries up business profits so that firms may move out of the state.

Second, the Suits index the report uses -- which is a measure of the progressivity of the tax system -- is -0.253. A negative reading on the Suits index means the tax is regressive. So Senator Kelley's preferred method for paying for roads is to tax the poor more. (The only tax more regressive than a tax on gas is a tax on cigarettes ... whoops!) A $20 wheelage tax is akin to the old poll or head tax -- $20 a car regardless of your income. The .5% sales tax is regressive as well. For a party that screams about making people pay their fair share, this should be criminal.

Last, the tax is neither a guarantee that the state won't borrow money later, and it's a shift of the costs of roads from the next generation to this one. If the roads are really "needed" -- and try defining need for me, Sen. Murphy, with something other than the statement of the people whose jobs depend on getting money to fulfill the "need" -- then our future income would be higher with the roads. Wouldn't it then make more sense for the people who will have higher income to pay off the bonds later rather than reduce the consumption and employment of the people who would pay for the roads now?

I'm not hiding anything -- there's little economic logic in the gas tax, particularly from those who use "the poor" as a shield for spending other people's money.

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A woman wins the Clark medal 

For the first time, the John Bates Clark Medal has gone to a female economist, Susan Athey of Harvard. The Clark medal goes to the most promising economists under forty, and is only awarded every other year. Most people will know Freakonomics' Steven Levitt won the award in 2003; Daron Acemoglu, whose work I know much better than Athey's over even Levitt's pre-Freakonomics, won in 2005.

I was looking through some of Athey's papers and found this one quite interesting. Co-authored with well-known professors from other universities in the top five in our area, it is an attempt to predict success for economists based on their work in graduate school.
The Ph.D. admissions committee�s evaluation of a student predicts first-year grades and Ph.D. completion, but not job placement. First-year performance is a strong predictor of Ph.D. completion. Most importantly, we find that first-year Micro and Macro grades are statistically significant predictors of student job placement, even conditional on Ph.D. completion. Conditional on first-year grades, GRE scores, foreign citizenship, sex, and having a prior Masters degree do not predict job placement. Students who attended elite undergraduate universities and liberal arts colleges are more likely to be placed in top ranked academic jobs.
That last sentence is rather depressing. I remember one of my professors at Claremont, a Harvard-trained economist, telling me that if I placed back at a school as good as my undergraduate institution, I would be considered to have done well. The implication was that above that I could not go. But remember that the Athey et al. paper only surveys those coming out of top-five econ programs. I have no idea what these results would look like for the next 25 graduate programs; I rather doubt they'd be the same, particularly the conclusion that first-year grades in your core courses somehow determined where you would eventually place for an academic position.


Saturday, April 21, 2007

Meet a REAL American Hero - Neil Duncan 

This afternoon I had the honor of attending a benefit for a real American hero, Neil Duncan. The Osseo American Legion Post was packed with those wishing Neil well and willing to help him as he comes back to civilian life. The benefit ran from 2:00 until 6:00 PM. The gentleman staffing the door stopped counting at 500 attendees - around 3:00 PM.

Who came? People of all ages: kids, grandparents, and everywhere in between. Patriot Riders were there in force. The food was great. There were many silent auction items as well as gift cards, There were t-shirts that recognized what Neil did and gave for his country and our beliefs.

Neil was injured in an IED explosion in Iraq. He spent the past year learning to walk and run again. He plans to play golf. This young man is everything an American hero is: strong, persistent, honest, hard-working, capable of making decisions under stress and true, red, white and blue. His attitude is upbeat, no victim thoughts here. He understands why we are fighting those who wish to destroy us; he understands the prices some will pay. We owe it to the Neils of this time to be there when they need us.

To learn more about Neil, go to this website. If you were unable to attend, you also can make a contribution.

God bless the Neils of this generation - they are our best!

Friday, April 20, 2007

John Stossel Coming to a Campus near You! 

ABC's Award-winning journalist John Stossel is coming to MN for two appearances:

Monday, April 23 - 7:30 PM - Pellegrene Theatre, St. John's campus, Collegeville, MN.

Tuesday, April 24, 7:00 PM - Northrop Auditorium, U of MN main campus.

Admission is free. See you there!

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Higher ed-gasm at the House 

The Minnesota House passed a whopping higher education budget last night that adds $168 million or 14% to the MnSCU base budget. The bill includes the provision that would permit anyone with three years in a Minnesota high school to get the in-state tuition handout from taxpayers regardless of their citizenship or immigration status (the DREAM Act.) Rep. Dan Severson of Sauk Rapids tried to get DREAM pulled out of the bill but his amendment lost 61-71. Rep. Marty Seifert is quoted as saying that provision will draw the governor's veto.

A note from our union's lobbyist in St. Paul included this:
A bipartisan amendment by Representatives Mary Seifert (R-Marshall), Gene Pelowski (DFL-Winona), Morrie Lanning (R-Moorhead), and others, to cut $6 million per year out of the MnSCU central office and use the saving to buy down student tuition, passed by a vote of 97-35. All of the MnSCU legislators, except the Metro State area legislators, supported the move. Needless to say, MnSCU officials are not happy.
Tuition increases were capped in the bill at 2%. Subsidize middle-class children or MnSCU officials? Hmmm, tough call there.

The bill goes to committee now, and we'll see if DREAM and the tuition caps stay in.

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Have you followed the Wolfowitz story? 

Someone asked me this earlier this week. I'm grading senior theses so the answer was "vaguely for now, will more later." Still going that way, but today's lead opinion in the Wall Street Journal might push it a little forward. I know no more than you do about the conflict-of-interest story and will wait to comment until I know more. But there's this paragraph screaming for commentary:
Finally, there is no question that many resent the tradition by which the nominee of the President of the U.S. becomes the president of the Bank. The resentment has been exacerbated by the staff's political preferences (roughly the same as that of most college faculty). Good philosophical arguments can be made for a more open presidential selection process. However, the same arguments can be made with respect to many other multilateral institutions such as the IMF; the African, Asian, European and Latin American multilateral development banks; and, last but not least, the U.N. The unproductive free-for-all that would be unleashed if all such understandings were abandoned would not be a pretty picture, nor, in my opinion, an improvement.
The first part -- that the average political preference of the World Bank's staff is equivalent to that of college faculty -- isn't altogether true. It's definitely left-of-center, no doubt, but most of these people are economists who happen to work in development. That group, by and large, is towards the left of the profession but still anchored by a deep respect for markets. You don't find that in the Department of the 3.7 GPA.

The second is quite reasonable. There has always been a tacit understanding of how posts in various multilateral agencies are divided between the G-7 or G-10 or G-whatever. If the EU would like to trade us the World Bank for the IMF, that's one thing. But the current push is just an attack on the US, which provides a large part of the funds for these organizations and therefore has paid for its position at the table. You might want to ask the Wolfowitz detractors if they would be willing to replace US funding of the multilaterals in return for the right to pick the WB president.

There's a running commentary on this blog, which appears not to favorable to Wolfowitz.


The farm team 

Courtesy Residual Forces, here's the webpage at the University of Minnesota that lists internships for its political science majors. Andy calls it "the of the DFL". How come Norm Coleman or Jim Ramstad or John Kline internships aren't on this list?

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Thursday, April 19, 2007

Personally Responsible 

The term paper for my class, Management Information Systems (MIS) is somewhat unique. The student must evaluate a software application installed within the last five years. There are 18 potential subtopics of which the student must select 10-12 to have the paper considered for an "A", less for a "B", "C", etc. The student must also interview four stakeholders, one of whom can be the student.

In addition, the paper is to be written in third person, past tense along with additional grammar requirements. Some students have difficulties with these conditions but most manage to get there.

Papers were due last week, returned last night. One student sent an email today wondering why her paper was a "B" when she had done all this work. I checked my notes and discovered she'd only considered eight subtopics, hence an "A" was impossible. I reviewed the requirements, the page in the syllabus where the specifics were defined, etc.

Shocking response from her - instead of whining, moaning, and complaining, she simply said, "Oh, my gosh.. it's completely my fault."

Wonder how many protected students in today's grade-inflated college environment would have the maturity to admit they simply blew it???


An old lesson still unlearned 

The most depressing thing to me about the minimum wage bill that the Minnesota Senate passed yesterday is that the lessons of their harm are so well known. (Readers of this blog have seen a whole stream of lessons.) Here we are surrounded (except for Wisconsin) by states that have a minimum wage equal to the Federal rate. We are already above that at $6.15, but the Senate believes that fairness requires raising that rate to $7.75. Why? Stay ahead of Iowa?

Here's where state minimum wage laws are
State Wages
MinnesotaDFL $7.75
Connecticut $ 7.65
Washington $ 7.63
Massachusetts $ 7.50
Oregon $ 7.50
RI $ 7.40
Vermont $ 7.26
Hawaii $ 7.25
Iowa 08 $ 7.15
Alaska $ 7.15
NJ $ 7.15
NY $ 7.15
DC $ 7.00
Michigan $ 6.95
Maine $ 6.75
California $ 6.75
Illinois $ 6.50
Florida $ 6.40
Arkansas $ 6.25
Iowa 07 $ 6.20
Delaware $ 6.15
Maryland $ 6.15
Minnesota $ 6.15
WV $ 5.86
Wisconsin $ 5.70

Does this make sense? Should we really put the state's least skilled, least educated, least experienced workers at this disadvantage to our neighbors. Walter Williams observes,
...if higher minimum wages could cure poverty, we could easily end worldwide poverty simply by telling poor nations to legislate higher minimum wages.

...In research for my book "South Africa's War Against Capitalism" (1989), I found that during South Africa's apartheid era, racist unions, who'd never admit blacks, were the major supporters of higher minimum wages for blacks.

Gert Beetge, secretary of South Africa's avowedly racist Building Worker's Union, in response to contractors hiring black workers, said, "There is no job reservation left in the building industry, and in the circumstances I support the rate-for-the-job [minimum wages] as the second best way of protecting our white artisans." Racists recognized the discriminatory effects of mandated minimum wages.

I doubt the MN DFL is racist in its desire to push up the minimum wage, but its effects on teenage blacks will be negative.

Again, if the state wants to help the poor, at least be honest and take it from taxpayers. Maybe you could call them "wealth impact fees." But at least then it'd be a more honest looting.

Footnote: During Senate debate Wednesday, Senator Vandeveer decided to test a theory and offered to raise the minimum wage to $10.75 for this year and $11.75 the next year. This lost on a 10-48 vote. We credit Senators Chaudhary, Higgins, Marty, Moua, Prettner Solon, Torres Ray and Wiger for voting for the higher rate. If they believe raising minimum wages helps reduce poverty, they were right to vote for as high a minimum as possible. What's the matter with the rest of them?

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Did anybody say no new taxes? 

Speaking of marketing, let's have a caption contest.

Here we find Senators Tarryl Clark and Larry Pogemiller, the leadership of the DFL in that august house, looking, well, a little less than august. I'm pretty sure this is from the press conference last November in which Clark is reported to have said the Senate wanted to be prudent with taxes. Not sure that went so well there.

Comments should be only for possible captions for this picture.

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Sometimes partisanship is a good thing 

A few weeks ago Andy Cilek of the Minnesota Voters Alliance appeared on the Final Word with Michael and me. Here's the recording. Tuesday I received an email that the MVA has succeeded in getting enough signatures on a petition to get party designations on the ballot in St. Paul municipal elections. From their press release:
Certification of the petition will place the question on the 2007 ballot, allowing voters to decide whether candidates should be identified on the ballot by party affiliation, which would also allow each party to advance from the primary and be represented in the general election along with each qualified independent candidate. ...

Nonpartisan elections deprive voters of knowledge (on the ballot) of the candidates' political affiliations, and fail to guarantee that more than one Party can be represented in the general election. This has alienated the electorate, stifled debate, resulted in many �one Party� elections, and has limited the accountability of elected officials who have no Party platform, or specifically stated principles to abide by.
I can imagine Mitch on a ballot sometime soon. Don't you think it's time people knew who they voted for? Doesn't the label mean anything?


Wednesday, April 18, 2007

Show your colors 

Virginia Tech is asking people to support its students, faculty, administrators, staff, alumni and friends by wearing orange and maroon this Friday. Given the number of colleagues I've worked with over the years that are from that fine institution, count me in, as long as I can find something in those two colors.


The ex-legislator employment plan 

The Minnesota Senate declined to stop their former colleagues from lobbying them. Gary has details. This appears to be a bi-partisan action to be sure senators who fail to retain their offices still have the ability to get money in St. Paul, though I don't know what the per diem would be.

UPDATE: It dawns on me as I drive home: This was the amendment that Rep. Steve Sviggum had worked hard to get into a bill earlier this year. Its authorship was bipartisan too. But I received a note today that the House had passed HF1048, which eliminates the Department of Employee Relations but saves every job in the place except one, commissioner Patricia Anderson, the former state auditor. She's managed to work herself out of St. Paul. Maybe that can be an example for others.

Oh gosh, just saw that Bob Collins used the same title. Like THAT happens every day!

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Keeping one's promises 

The Chronicle of Higher Education this week published (subscribers' link) a full assault on the Foundation for Individual Rights in Education by Jon Gould, a professor of law and womens' studies at George Mason University. He claims that FIRE has greatly inflated the claims that speech codes on American university campuses are infringing on free speech. Moreover, he says, the demand for speech codes are from the very students bound by them, and that the students come wanting to be restricted. To wit,
It is simply not the case that "free speech no longer exists on American college campuses," a charge made in an American Enterprise article about FIRE several years ago. There is a reason that large majorities of freshman students arrive at their institutions already believing "colleges should prohibit racist/sexist speech." They're developing those attitudes, before they ever set foot on a campus, from a civil society that has supported the restriction of hate speech � not from colleges that are "indoctrinating" their charges.

One sees such general attitudes in public-opinion surveys. Last year, for example, the First Amendment Center found that 55 percent of respondents in a national survey did not believe that the First Amendment right of free speech should allow "people ... to say things in public that might be offensive to racial groups."

But universities have a special place within First Amendment law, and Gould's wrong to extrapolate from a general survey to the special requirements of academia. See for instance Eugene Volokh's summary.

Moreover, Gould's claim arises from the fabrication of taste for multiculti education by the government education establishment. Joanne Jacobs observes, for example, the Seattle government school district sending its students to a "white privilege conference" and holding an "equity summit." Thus the liberal education establishment's control of public tax dollars is used as an excuse to suppress speech on college campuses.

FIRE is running a series of rebuttals on its blog, The Torch. They make several points, but the one I keep returning to is this: All public universities are required to permit free speech, and most private and religious schools promise in their materials for prospective students that they will. Having done so, FIRE argues, the schools have a contract to uphold with students and cannot impose speech restrictions when someone is offended.

UPDATE: The interview with Evan Coyne Maloney from Indoctrinate U that we did last week is up at last (the gerbil that runs the Patriot was tired and stopped turning the wheel.) I suppose Prof. Gould would like to put Maloney's lights out too?


Tuesday, April 17, 2007

The DFL mimics Colbert 

No, not Stephen. Jean Baptiste.
"The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing."
The Minnesota DFL thinks the Atomizer is a goose.
A bill moving through the legislature would add a 10 cent tax to every drink at bars in Minnesota. A dime a drink would raise tens of millions of dollars that would pump money into law enforcement including catching drunk drivers.

Supporters of the drink tax say it is not really a tax, it's more of a user fee. Chemical dependency experts say only 10 percent of drinkers are responsible for 60 percent of alcohol-related problems.

The author of the bill says most drinkers won't even notice the tax.

"The impact here is very, very small. On the individual drink. Very, very small. Probably a stick of gum. You can't even buy a piece of candy for what we are talking about here," said Rep. Karen Clark, a Democrat from Minneapolis.
We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle� -- Winston Churchill. Which reminds of the time I saw the Fraters at a bar...

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Returns to tanking 

OK, something a little more lighthearted.

Like me, Bill Simmons is a Celtics fan, an NBA fan. (I only watch the NCAA tournament, not much of the regular collegiate season. I have season tickets I share for the Huskies basketball teams.) He has been incensed about the obvious tanking of games by NBA teams, none more that our Celtics. And this morning on Mike and Mike the listeners voted on whether teams should tank. I don't know who won.

Let's think about this a minute. The odds of who you get in the lottery are explained at The Celtics were angling to be sure to have the second-worst record in the NBA (they can't "catch" the Memphis Grizzlies.) By doing so they gave themselves about a 39% chance of having one of the first two picks, largely assumed to be either Greg Oden (assuming he makes himself eligible for the draft) or Kevin Durant (who's in.) Being third worst in the league lowers your odds of one of those guys from 3-2 against to almost 3-1 (27% chance of picking first or second.) The odds of picking first or second by being the worst team are less than 50-50 (46%), so there wasn't nearly as much incentive to chase down Memphis as there was finishing behind Milwaukee.

The return on tanking with two sure-fire draft picks (you can argue against Durant if you like, but given Celtic GM Danny Ainge was fined for wooing his parents you can guess the team does not agree) was therefore more substantial than any other positioning. Odds of getting one or the other went up more than 40% by finishing second rather than third.

I'm not sure that Ryan Gomes had worked through the probabilities, but what he said wasn't wrong in substance. It's just wrong that he said it in public; I'll bet NBA Commissioner David Stern reinforces that lesson with a fine sometime soon.


Virginia Tech 

Words are hard to find when one tries to address the anguish surrounding a horrible event such as that which occurred yesterday at Virginia Tech.

May all affected take the necessary time to grieve, to feel the frustration and anger that accompanies such a tragedy. As humans, we need to let our personal emotions run their course.

My thoughts and prayers go to the families, friends, acquaintances of those who were murdered. Also to those who were wounded.

The price of freedom 

As I read various reactions to the tragedy at Virginia Tech, the common thread seems to be an attempt to read policy prescriptions into the event. More gun control or less, for example? Is campus security strong enough? Are there enough valiant men?

Yet I find instead that most reactions at first are the product of a small sample of relatively rare events. Some people argue that we overreacted to 9/11 because it was just one of those catastrophic moments that can happen in a free society. It is only in piecing back the signs from there that we realize the events are not rare, the risks quite substantial. It's an argument over such boring things as probabilities, elasticities and expected values.

So too with the VT tragedy. What's the relevant sample of possible incidents with disgruntled students, and how many times do they really happen? Glenn Reynolds says not many. What is the increased likelihood of a psychopath gaining a weapon if guns are allowed on campus? Jules Crittenden says "doesn't really matter." What is important is that decisions are done with detachment, with rational assessments of all the boring numbers. And someone, somehow, has to price freedom in the equation.

Grieving comes first; time will allow better decisions to be made.

UPDATE: Found this note by the Dean Dad (via Stephen):
College campuses are incredibly vulnerable places. They're open, they're highly populated, they're lightly patrolled (if at all), and they're full of stressed-out people. In a way, they're almost naive, if it's possible for institutions to be naive. As I've mentioned before, they really aren't built for easy lockdown modes. Most were built before that term was even coined.
Absolutely so. I have never found myself thinking about my own safety in mediating disputes between students and faculty (grade appeals, classroom behavior, cheating/plagiarism), but I guess it will cross my mind for a few weeks now. Then I'll go back to my usual "these are my students, they're good kids" frame of mind. But even good kids can react badly to stress.


Monday, April 16, 2007

Now is the time for a tax cut 

As Gary mentioned on the air Saturday, the House Taxes Committee remarkably chose to schedule hearings today on HF60 and HF62, both introduced by Rep. Laura Brod very early in the session. HF60 envisions reducing the tax rate lower two brackets while HF62 would lower the rate only on the lowest tax bracket. I am inclined to argue for the broader tax cut in HF60. I sent Rep. Brod these talking points in favor of the bills:
  1. Like other bills proposed in this session, these bills increase the progressivity of the Minnesota tax system. The increase in progressivity for the system overall would be quite modest, but it comes at a time with heightened concern over tax equity, and provides greater equity without compelling anyone to give more money to the government.
  2. Lower taxes on income will increase work effort in Minnesota. By allowing workers to keep more of their income they will respond by providing more hours of employment and increase the amount of output Minnesota creates. Most research done on labor supply response to taxes indicate that women and single mothers in particular will respond to a decrease in state income taxes by increasing their labor supply. (See for example Bruce Meyer and Dan Rosenbaum, "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," Quarterly Journal of Economics August 2001.) As some areas of the state, particularly outstate, have reported labor shortages, increased work effort will help stimulate the Minnesota economy.
  3. Most importantly, this is a particularly good time for a tax cut because of weakness in the Minnesota economy. Numerous economic researchers in Minnesota have found that the economy is turning negative right now. The Federal Reserve Bank of Minneapolis forecast last November that the Minnesota economy would experience job growth of only 1.5% and personal income growth less than 5%. These are both below historical means. The Mid-American States survey from Creighton University forecasts that unemployment, while currently below the national unemployment rate, will rise above the national rate by the end of the second quarter of this year. Food processors and transportation industries have been hit rather hard. And the St. Cloud Quarterly Business Report released two weeks ago reported "The St. Cloud-area economy slowed in the past three months as firms reported weakness across a variety of activities. While these bills do not directly help business, they indirectly help in providing additional discretionary income to Minnesota consumers. (Full disclosure: I am co-author of the St. Cloud QBR.)
Additional note (I did not send this to the representative): If I was the new DFL majority in the legislature, would it be prudent for me to raise taxes when the state economy might slow down in the next year? Suppose Minnesota does slow down and thus tax revenues do not meet the forecast values from the previous forecast. See for instance this from the Dept. of Finance:
Economists have grown less optimistic about the outlook for 2007. The slumping housing sector remains a major concern, but that is no longer the only potential problem. Business equipment spending has weakened and the current inventory correction may have even further to go. With no offsetting good news, forecasts for growth in 2007 and 2008 have been cut back. The change in the Blue Chip Consensus forecast, a summary of 50 top forecasters, is typical. February�s Blue Chip forecast called for 2.7 percent real GDP growth in 2007. Now, the consensus expects growth at an annual rate of 2.3 percent.
And so on. Does this sound like a time for vast new spending programs that require $5 billion in extra taxes to you?

Someone may say that I always prefer tax cuts, and they'd be right. But just as anti-inflationary policies can be opportunistic -- using positive supply developments to ratchet down inflationary expectations -- so too can tax cuts be put forward opportunistically, to leverage those who adhere to Keynesian notions of fiscal stimulus in the package to go with those who are opposed to government spending on more philosophical grounds. Now is such a time.

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There is no midpoint between right and wrong 

Three Saturdays ago, I said as the Minnesota Senate left town that they would pass their tax increase under dark of weekend and then go out and get the local papers and the trade unions and teachers and all to beat drums in favor of it.

The Sunday St. Cloud Times outdid itself yesterday. I can barely talk about Edith Rylander's column, except that I believe she's the Edith Archie Bunker really was talking to. Her logic goes like this: Government bought something, it did some good, so government spending is good. The thought that it might be provided for less, or provided better, never enters her meathead. Forget convincing her that government spending builds dependency, she's already gone around that bend.

I gave the column by Randy Krebs attacking Steve Gottwalt a comment here. But I'd like to add something that more belongs on this blog than on a comment, regarding what I see as the education of a freshman legislator.

Recall back to last fall, when Steve Gottwalt and Diana Murphy-Podawiltz vied for the seat in 15A. I covered a debate of theirs, and at the time I said this about Gottwalt:
He is much more a moderate than I thought before, particularly on fiscal issues. While even a moderate stands out against the backdrop of DMP, Steve is nonetheless one to argue for smart, careful fee or tax increases. I was the one who wrote the "name a place that grew after raising taxes" question, and he correctly said "none." But in other places as you see in my notes, he was in favor of higher auto license fees, for MVST -- he and I have sparred on Northstar in the past, as he has a preference for spending programs for transportation. He's much more positively disposed to JOBZ and other business tax incentive programs than I would be.
I heard more of him over the last two months of the election and I saw nothing that changed my view that he wasn't altogether hawkish on tax increases -- just that he wanted accountability. That matched his behavior as a city councilor: Pragmatic, willing to put money into things he can show get results.

Now if one wanted to take a very narrow view of what's happened since then, one might say he hasn't changed a thing. He may still favor tax increases if they come with real accountability. But one very annoying thing about this legislative session is that none of the spending proposals have accountability to them. The education bill is a gigantic pork train; the governor's call for merit pay for MnSCU has fallen on deaf ears. Find a bill that has an accountability component.

I say "he may still favor..." because I don't know. I haven't asked him. But based on what he's been saying lately, I think perhaps he's learned that government is never accountable. As Reagan once said, government is like a baby, "an alimentary canal with a loud voice at one end and no responsibility at the other end." When he gets Cy Thao breathing on him, or Tarryl Clark speeding past him in a town hall meeting (notice how long those things lasted as bipartisan events?) or tries to talk compromise in a committee passing a sex ed bill and gets rolled time and again on party line votes, or ... well, at some point it becomes time to check your premises. Again, I haven't asked him, but I'd say Rep. Gottwalt has indeed changed. He's received an education in partisanship, a new experience for him vis-a-vis the St. Cloud City Council. (Not that the latter isn't partisan, but not to the extent the legislature has become.)

As John Maynard Keynes once said, "When the facts change, I change my mind. What do you do, sir?" The facts of this Legislature have changed. The DFL is now in charge of the House, and it seems hellbent on spending and taxing and not asking the GOP for any input. So my question to Randy Krebs is, was Steve just supposed to sit there and take it?

Maybe he's just learned that there's no midpoint between right and wrong, and the DFL's tax plan is wrong in kind, not just in degree. If that's what Gottwalt has learned, he's shown more intelligence than the St. Cloud Times.

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Friday, April 13, 2007

Tomorrow on the Final Word... 

We are looking forward to a great show with a couple of special guests. Brian McClung, communications director for Governor Tim Pawlenty, will be joining us. The Word has it that McClung is responsible for my favorite line of the 2007 Legislative session, spoken by Governor Pawlenty. If so, praise be upon him. I believe he will be on in the first hour, exact time is still firming up.

We're also please to have at 4:15 Evan Coyne Maloney, whose movie Indoctrinate U will be opening next week in New York. I am going to try to persuade him that his movie would make a good headline for a double-bill with the Penn and Teller episode that featured what one fellow calls "the ground zero of political correctness."

Watch the trailer below, then come listen to Mr. Maloney.

The show will be on 3-5pm on AM1280 the Patriot. The archive afterward should be up here.

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I was wonderin' ... 

... what had happened to some of our favorite silly bills? Here's a rundown:
More added to this list as I dig them up.

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The only thing I'll link on Imus 

Jason Whitlock. I heard him on Colin Cowherd's show on ESPN Radio this morning, and he was magnificent.
We all know where the real battleground is. We know that the gangsta rappers and their followers in the athletic world have far bigger platforms to negatively define us than some old white man with a bad radio show. There�s no money and lots of danger in that battle, so Jesse and Al are going to sit it out.
Bless the newspaper that lets its columnist write that. It fits this interview with Whitlock.

Rutgers, Imus, Sharpton etc. 

As many of you know, I follow the women's basketball program at the University of Minnesota. I was a pre-Title IX athlete so I understand what it takes to get to an elite level (note, I was very good but not elite). Up front, I want to say I totally disagree with what Imus said about the Rutgers women's basketball team.

One of the key benefits of participating in sports is the development of justifiable self confidence based on measurable objectives. By any standard, the women of Rutgers basketball team achieved much. Reaching the final game of the NCAA tournament is a remarkable feat. They have every right to be proud of what they accomplished.

They are justifiably angry in rejecting the false labels Imus put on them. At the core of their response to Imus was this message: "I am who and what I am, not what you say I am."

The Al Sharptons of the world are also trying to pin a false label on them: helpless victim. His actions are every bit as detrimental as those by Imus. Their response to Sharpton should be the same as their response to Imus: "I am who and what I am, not what you say I am."

The talent, dignity and class the Rutgers women showed in their NCAA run are the same characteristics they need to draw on during the current media circus.

Ladies, you are superb athletes. What you are learning bodes well for you for your entire life. Relish in your achievements! Ignore all those who will try to put a label on you. You are first class. Congratulations on your successes! Now, move forward and play even better and harder next year!


Thursday, April 12, 2007

Are you REALLY happy to pay for a better Minnesota? 

If so, we have a bill you need to support.
A bill for an act relating to taxation; individual income; providing income tax checkoffs to provide additional funding for kindergarten through grade 12 education, health care, higher education, early childhood and family education, and state parks; ...
Yes, my liberal friends, here you are! A chance to put your money where your lawn sign is!
Accounts are established in the special revenue fund to receive amounts designated through the income tax checkoffs in this section. Accounts are established for:
(1) kindergarten through grade 12 education;
(2) health care;
(3) higher education;
(4) early childhood and family education; and
(5) state parks.
I mean, goodness! Education (early, k-12, and higher)! Health care! State parks! Now these are things you should be happy to pay for, yes?
(b) All interest earned on money accrued, gifts, contributions, and reimbursements of expenditures in each account must be credited to the account.
(c) The state pledges and agrees with all contributors to the accounts to use the funds contributed solely for the purposes specified, and further agrees that it will not impose additional conditions or restrictions that will limit or otherwise restrict the use of the funds.
Why look! They are making you a deal. They'll spend only on those things. Not one dime for a tax break for businesses. Not one dime for mcchimpybushhitler's war. Just the good stuff.

I can imagine you're all a-twitter over this now?
Every individual who files an income tax return may designate on their original return that $1 or more is to be added to the tax or deducted from the refund that would otherwise be payable by or to that individual and paid into one or more of the accounts established in subdivision 1. The commissioner of revenue shall, on the income tax return, notify filers of their right to designate that a portion of their tax or refund is to be paid into one or more of the accounts. The commissioner of revenue must also provide on the income tax return for an individual to designate that an amount equal to five percent of the individual's tax due before credits be distributed equally among the five accounts established in subdivision 1.
"So I check off how much I want to put into these worthy goals and ...

"Um, wait. What's this thing about '$1 or more is to be added to the tax or deducted from the refund that would otherwise be payable by or to that individual'? Does that mean my tax refund is less? Like giving to the wildlife fund?"

Well, yes, friend. Of course it does mean that. But these are things you are happy to pay for a better Minnesota, I thought?
�We�re not trying to pick on them,� said Assistant Senate Majority Leader Tarryl Clark, DFL-St. Cloud, adding that Minnesotans who are well-off have benefited from federal tax cuts. The proposed Senate tax increase would require those same people to �pay their fair share,� she said.
Oh, so you're only happy to force someone else to "pay their fair share" for a better Minnesota. You're not actually willing to let people pay it themselves.

We thank Rep. Steve Gottwalt of St. Cloud for bringing the "Please Tax Me More" bill to the legislative session. He reports (via Psycmeistr) that the bill was heard in the House Tax Committee today. While Gottwalt reports he doesn't expect it to get into the tax bill in committee, it would make for a lovely floor amendment. Please do, sir! I want representatives to explain why they voted to not allow people to voluntarily fund public education, health and parks.

Maybe because they are afraid how little support public spending would elicit.

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Standing out is proof enough 

Reading Mary Eberstadt's article about left-wing bias on college campuses reminded me of a story I told a couple of years ago here. I am fortunate that I work in a department where my politics do not stand out as different, because there are a number of people who are conservative here as well as liberal. (Indeed, in the past six years in hiring seven new faculty members, not only have we hired a healthy mix but in two cases I completely missed on my guess of the other's politics -- one in each direction!) But the case I made then remains: A conservative who is accepted on a college campus tends to be treated as a token of the Left's self-perceived "openness".

The students, however, recognize it. Eberstadt's new book, Why I Turned Right, makes the case that famous conservatives become that way after starting out in school as liberal (David Brooks argues that they do it to be cool, to affect a superior attitude to the perceived ignorance of the Right.) That may well be true at more elite institutions. At SCSU, however, a majority of students I see know who the professors are who are putting their political views on display in the classroom, and surprisingly it's not working: On a campus where 90% or more of the faculty are Democrat, a new SCSU Survey of students says only 36% self-identify as Democrat, to 26% Republican.

Johnathan Chait pooh-poohs Eberstadt's collection of stories, likening the conversions of the David Horowitzes and Heather MacDonalds as like joining a cult. He is right insofar as those who publish as leading voices of the new Right tend to be people who knew how to be leading voices of the Left. But focusing on the few in Eberstadt's book misses a broad swath of students at non-elite schools, educated by the second- and third-rate liberals from more elite schools (who alternatively pray for their deliverance from a conservative Midwestern hell and curse the fates), who shrug, chug a beer, and head off to middle class jobs feeling like they are the ones delivered. Indeed, as a number of us were discussing over lunch today, the increased use of two-year schools as feeders for the state university system is just the thing to allow our students to avoid the grips of the displaced, dispossessed leftist's general education course.

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And so he goes 

From Scott Johnson's observation of Kurt Vonnegut's passing:
The man met the moment with Slauhghterhouse-Five in 1969 and Vonnegut became a countercultural celebrity without any discernible discomfort. Indeed, he encouraged acolytes like me in our fatuity, our grandiosity, our irresponsibility.

From an adult perspective, one can see that the novels are full of cheap irony, insufferable sentimentality, paper thin characters, and forgettable plots. If Vonnegut's novels have made it into the high school curriculum, ... pity the poor high school student who thinks that this is what literature is all about.

Like Scott I read lots of Vonnegut in my youth, though being younger than Scott means Breakfast of Champions was my plunge rather than S5.

I can hardly think of the latter without pleasant visions of Valerie Perrine. But aside that there's little I can recommend of Vonnegut any more. S5 wasn't a very good movie, and the others simply stunk. I so wanted to like Bluebeard in which he has a fake autobiography of Rabo Karabekian, but just read the excerpt of it from Amazon and ask, is this really want literature is all about? Of course not.

I remember as much his son Mark's book Eden Express where the son goes through manic depression and drugs (see for example this excerpt.) He's come out the other side a doctor, seems quite normal. For some reason the book made an impression on me as being more relevant to my own experiences than the Carlos Castaneda novels that were the rage in the mid-1970s. In some ways the son lived the life the father encouraged, slipped the bonds of reason and through his own strength found his way back. I don't know that it had any effect on the father, though -- and that seems sad.

$22k a stall 

And the owners of Mall of America would like taxpayers to pay for parking.

That detail surfaced Wednesday as the House Taxes Committee held a wide-ranging hearing into the costs and benefits of tax breaks sought by the Bloomington mall and an Eagan publishing firm.

The mall and the Thomson West company say they need breaks to proceed with large expansion plans that promise long-term tax revenue and jobs. But one economist challenged the notion that tax subsidies are needed to make the expansions possible.

"If that mall expansion is a good private investment, it will get done," Arthur Rolnick, senior vice president and director of research at the Federal Reserve Bank of Minneapolis, told legislators. "If it's not, why exactly would we subsidize it?"

The argument for the Thomson West expansion that Art makes is quite sound: You get into a bidding war with other states when you start using tax breaks to attract or keep firms in your state. The Minneapolis Fed has written several papers on this collected here. And yet the Minnesota Senate has already passed these tax breaks and the House might follow. As I argued before, the idea that more out-of-state visitors would come to a larger MOA and generate enough additional sales tax revenue to offset this is ludicrous. And the Mall, unlike Thomson, can't move.

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Wednesday, April 11, 2007


University presidents are refusing to fill out a survey of the reputation of their peer institutions that is used as part of the US News and World Report rankings.
Dozens of schools have recently refused to fill out surveys used to calculate ranks, and efforts are now afoot for a collective boycott.

..."This increasing interest in measuring everything � these so-called science-based measures of [educational] outcomes and the like � seems to me to be so misguided that it's now captured the imagination of the leadership in higher education," says Christopher Nelson, president of St. John's College in Annapolis, Md., who heads an association of 124 prestigious liberal arts schools. "This is a bad way of talking about an education. [Students] aren't consumers shopping for a product."

The boycott of the U.S. News rankings could be extended in coming weeks as a draft letter makes the rounds of academia. The letter, formulated by a dozen college presidents and an education activist, calls for others to join them in neither filling out the magazine's survey form nor touting rankings in marketing materials.

The "reputational survey," as it's called, asks college administrators to rank the quality of hundreds of schools on a one to five scale. The data � which critics call a "beauty contest" � account for 25 percent of the overall U.S. News rankings.

It's hard for me to figure out who I side with in this battle. The presidents hardly elicit support when their answer to problems in a third-party ranking system is to try to sabotage it with a boycott.

But I certainly agree that there are many "science-based measures" that are little better than a SWAG at what rankings should be for this or that. As I've mentioned, I'm working on a book looking at measures of things like corruption or rule of law, which are also reputational in nature. Country X is said to be corrupt because a group of businessspeople say it is. That seems pretty circular, and sometimes not really scientific.

Likewise, university president rating universities are relying mostly on a single vague dataset.

Several college presidents suggested that they personally could evaluate only five to 10 schools � a far cry from the hundreds on the list. "We know each other through reputation, but that's different than having the kind of intimate knowledge you should have when you are making a ranking," says Robert Weisbuch, president of Drew University in Madison, N.J., who plans to sign the letter.

The intent of the administrator survey is to capture the opinions of those who are experts inside the industry, says Brian Kelly, executive editor of U.S. News. The survey asks them to rank only those schools with which they are familiar. If that number is only five, says Mr. Kelly, "well, gee, maybe you need to know some more about your competitors."

But why? I really know only so much about my peer institutions. I don't really know that many other economists at other MnSCU institutions. I know people in my own area of research specialization, but it's sufficient specialized that knowing my field isn't that hard to do. And just because I give a school $50,000 to educate Littlest Scholar doesn't mean the school has to give USNWR 50,000 rankings, as Mr. Kelly seems to imply.

Moreover, one thing I always hate about their college rankings is that the weighting scheme is very much one-size-fits-all. Mr. Kelly says that is changing to allow you to use your own weights. But weighted bad data still gives bad rankings.

An objective measurement is only as good as the consensus on what is to be measured. We rely on thermometers' mercury because they correlate with our own perceptions of heat and cold. As long as the market purchases USNWR's college guide you have to assume somebody values the information inside. Maybe it's time university presidents figure out why prospective students need a third-party guide.


Like he hit the lottery 

Just real busy today -- seniors have senior papers due tomorrow, new advisees to point to classes for next year -- so Janet has the floor. But can I say something usually not put on this blog for a second. (Who the hell are you asking? It's your blog. --ed.)

Why am I enraged when I see this moron doing a celebration dance coming out of the courtroom? "Yessir, those were MY sperm! I knocked her up." What those arms are not holding is a child.

A REAL American Hero 

A reminder - a gathering for Neil Duncan on April 21, 2-6 PM at:

American Legion Post #172
260 4th Avenue SE
(Hwy. 169 & Cty. Rd. 81)
Osseo, Minnesota 55369

Phone: 763.425.4858

Website with map:

Hope to see you there!

Personal Finance 101 

As many of you know, I teach a Management Information Systems course in the Cities. For my last lecture I cover futures and security issues related to information systems within organizations and outside the work place.

Last evening included a discussion about software (SW) systems designed to catch fraudulent use of credit cards. As background, consider the following volume of textbook data: Visa has distributed 1,000,000,000 cards, handles $2,000,000,000,000 in transactions/year for 21,000 financial institutions. They rarely make a mistake. However, others can steal the credit cards. Then a student commented, "You know, the MNSCU system is considering mandating Personal Finance 101 for all freshmen."

J (me) - How many of you think this course is necessary?
S (students) - Almost all raised their hands.
J - How many of you would take the course?
S - Two raised their hands.
J - OK, if you think it's necessary for others to take it, why won't you take it?
S - Those freshmen need it; we can handle our finances.
S - We figured out how to use the system.
S - But those banks keep pushing credit cards at you and you spend and you get in debt and it's the bank's fault.
J - Oh? Who used the credit card?
S - Well it's their fault
J - Really. What did you do about it?
S - I got rid of my credit cards.
J - Problem solved - YOU solved it.
S - Well, yes, but....
J - OK, how many of you figured out this credit card problem through the "school of hard knocks?"
S - Over half the class raised their hands.

Our students' average age is mid to late 20's. They learned personal responsibility the expensive way and it tickled me no end that they didn't need the course but "those freshmen did."

Finally I described how financial institutions have put in place a number of automated SW security features to react to charges outside a cardholder's normal geography. One student also mentioned how ATM cards can be coded so an owner's cell-number is dialed automatically every time $N are withdrawn from an ATM - if the card owner hasn't withdrawn the money, the bank can be notified immediately. The SW capabilities to identify possible fraudulent use are extraordinary but the SW only works when the human performs their end of the deal - call your bank and cell carrier before you travel.


Tuesday, April 10, 2007

Tuition freezing is expensive 

Among the many places the Legislature wants to spend money, one of them that has special attention around here is the proposal to freeze tuition. For example, SF 773 fully pays for tuition freeze by an additional amount of money in the higher ed bill. The calls for tuition freeze are notably bi-partisan up here, though I think the Republicans have become more muted over the last month. The bill is laying in wait for the omnibus higher ed spending bill that may come up as earlier as next week. It would be part of the goodies used to buy public support for tax increases.

An object lesson comes from Ohio, where a promise to freeze tuition in return for a 5% increase in the state allocation is still leaving state universities in the red. At Phi Beta Cons, Michael O'Brien puts his finger on the problem.

No one is arguing that many large public universities couldn�t stand to trim some fat from their budgets. But the issue at hand, instead, is the Strickland administration�s imposition of what amounts to a price control on the price of higher education in the state of Ohio. As many of the economists at Ohio�s universities could tell you, the imposition of a price control below market value creates an excess of demand for a scarce supply. That is, there aren�t enough resources to meet the demands of increased numbers of students in Ohio�s universities.

Tuition should reflect the market value of education in the state of Ohio. Schools should be free to set tuition rates without having to kowtow to the demands of politicians. Indeed, it can even be prudent to raise tuition rates substantially�just look at Ohio�s up-and-coming Miami University. After raising its in-state tuition to match out-of-state tuition, the school�s academic standards for admitted students increased.

On this campus, the planning documents have an expectation of a raise in tuition revenue from $66 million to $74 million. (See documents here.) It is unlikely we would attract more students, so the increase has to come from more tuition per credit. Now some of this would come from masters and new applied doctoral programs which naturally charge higher tuition. And the nursing and art programs believe their costs are sufficiently higher that they should charge differential tuition rates for their classes. But it is highly unlikely that the university would get that much from those activities. And each 1% increase in tuition here generates about $1.5 million in additional revenue.

This is why the university (and all other MnSCU schools) have staked their hopes on a big budget bill getting through the legislature. Tuition freezes are a way to sell that, but the universities only want that if you pay for it. Our faculty union's chief negotiator, Rod Henry, testified before the legislature in January:
My organization supports a tuition freeze if the inflation request is fully funded, because otherwise institutions will have to come up with the money from employees or some other source.
Full funding begins with you, dear taxpayer.

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But is it really ignorance? 

I do not doubt the premise of this story; students do carry a large amount of debt. One of my seniors writing his seminar paper (I mentioned him before) found that higher levels of college debt per credit hour earned is associated with lower GPAs. Now I don't know what that result really means (I know he reads this blog, and I'm not giving him any hints. But you're welcome to give comments on that if you wish.)

Yet I wonder if the decision to borrow a boatload of cash to go to university is really an ignorant decision or if it is a decision made by people with high rates of time discount confronted with subsidized interest rates? If you are going to do this kind of education, it would be sensible as well to educate students on the benefits of the university education. What is the actual return on the investment? But no university has a stake in giving a realistic assessment of that because it may benefit from students overestimating their starting salaries after graduation.

Atop the growing financial aid scandal, one has to wonder if the schools really will police themselves in encouraging student debt.

Monday, April 09, 2007

Danger: Legislature returns tomorrow 

�The impact of �No New Taxes� is clear,� said Sen. Tarryl Clark, DFL-St. Cloud. �Someone else has to pick up the tab. That�s not honest and not fair, particularly to the middle class.�
Pick up what tab? Sure, if you assume all spending must be done, somebody has to pay. But you don't have to spend. Spending is a choice, be it your eating out budget ($96/day) or the higher education budget. YOU ORDERED THE SPENDING, IT'S YOUR TAB. You have misstated this case ever since your inflation dishonesty.

Gary and Michael have laid out the case for why the DFL has not been honest and fair. We'll be back at this Saturday.

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Separating theorem 

There's a little buzz running around about a well-known professor of constitutional law, Walter Murphy from Princeton (now retired to New Mexico), who was stopped from boarding a flight after being told he was on the Terrorist Watch list. (Here's an example of the telling from Balkin's blog. It was emailed around campus here last night.) The short story: The clerk at the ticket counter asks a few questions and when Professor Murphy revealed he had given a speech critical of President Bush, the clerk says "that'll do it." From this the professor concludes he was targeted by the government for dissenting from the Administration on such things as the war and the Patriot Act, and then descends into some Bush-bashing.

A few weeks after 9/11 I got a call to interview for a job in DC. I had to fly to Dulles two days after the phone call; my ticket was FedEx'd. My ticket had an 'S' after my name. Turns out this meant I was to be searched before every flight, and my bags picked over, because I had my ticket booked so close to when I was flying. The airline's computer did this to all tickets issued within 72 hours of flight with same-day turnarounds. The search included being patted down and bags searched (I had no checked luggage.) I've never had it quite so bad since, but suffice to say being Armenian doesn't exactly help me through airports.

I do a fair amount of international travel, too. US airports used to be much easier than European. Now they're only slightly better, and some of them are below better Euro airports. I am accustomed to being stopped in airports there for FWLA -- flying while looking Arabic -- and that doesn't happen here in the States. Here, when I get stopped, it's because some damn computer put an S next to my name.

Understanding that doesn't make it any more pleasant. And I can imagine in a less-guarded moment dashing off some florid letter to a constitutional law discussion list in order to vent. The letter now has entered public discourse and is being used as further indictment of the Patriot Act and the administration.

But what do we really know from this story? We really don't know why he was on the list. The clerk is not a government official; his or her statements are conjecture. Did his anti-Bush speech place him on the list? We have little data about that. The peace marches maybe, but it's again a leap that requires you to believe ill of the Administration first. As Johnny Carson always said, "buy the premise, buy the bit." Don't you think the list is created as much by software programmed with errors more than someone sitting in a dark basement under the White House saying, "oh, that guy"? All software is buggy and needs refinement; the software that put the S next to my name doesn't do that any more. Obviously here's another place that needs fixing, but we don't know from this telling what to fix.

A commenter on the discussion list wrote to me that the clerk's dataset was just as plausible as a computer error. But the clerk doesn't have data; the clerk at best is relating two anecdotes and conjecturing the causal link. It's certainly possible, but in the absence of data doesn't provide a test of the hypothesis.

UPDATE: Owen Kerr has similar thoughts.

Congress commands glass houses 

Jay Reding has an excellent note on the move to ban incandescent lights is so foolish. It's almost the anti-Bastiat. Here in Minnesota we're just trying to tax them to death.

Jay points to this article in The American Thinker which makes a salient point:
Reducing nighttime lightbulb consumption of kwhs will do almost nothing to shave peak demand. Moreover, with non-peak kwhs reduced at night, utilities will now have fewer revenues on which to earn a return on their invested capital. Utilities must build up their physical plant to meet the peaks, and the capital to finance that equipment has to be paid for 24 hours a day. Thus, utilities will have to raise rates on the remainder of the kwhs we use for everything else, from washing machines to hair dryers to computers.
Pricing the poor back to candles and increasing the amount of mercury used in the environment. All in a day's work for your local legislator.

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Really? They do that? 

The president of Missouri State is shocked, SHOCKED to hear that there's a problem in his College of Social Work. (Temp link, permalink for Chronicle subscribers -- thanks to loyal reader jw for the link!)

The president of Missouri State University has threatened to shut down its school of social work after receiving a searing external review that describes the school as, among other things, hostile to "faith-based beliefs." After reading the report, the president, Michael T. Nietzel, gave the school a year and a half to clean up its act.

"I was embarrassed by the things that were said in this report, but it was not a difficult decision to make it public," Mr. Nietzel said on Friday. "The only way, ultimately, that students and the public will have confidence in you as an institution is if you're public about your problems."

Mr. Nietzel requested the report after the university settled a lawsuit filed by a former undergraduate in the school, Emily Brooker. Ms. Brooker said in her complaint that faculty members in the school had retaliated against her after she refused to complete an assignment in which she was to write a letter to her representative in Congress supporting the right of gay couples to adopt children. Ms. Brooker cited her religious beliefs in her refusal.

Sure enough, the president posted the report. The report includes this assessment of the academic learning environment:

Does the academic environment of the School of Social Work promote learning and stimulate an honest and open dialogue in which intellectual differences are shared and respected among students, faculty and staff?

Many students and faculty stated a fear of voicing differing opinions from the instructor or colleague. This was particularly true regarding spiritual and religious matters however, students voiced fears about questioning faculty regarding assignments or expectations. In fact "bullying" was used by both students and faculty to characterize specific faculty. It appears that faculty have no history of intellectual discussion/debate. Rather, differing opinions are taken personally and often result in inappropriate discourse.

Do the faculty and staff of the School of Social Work model and communicate the CSWE Code of Ethics for students in the program?

There is an atmosphere where the Code of Ethics is used in order to coerce students into certain belief systems regarding social work practice and the social work profession. This represents a distorted use of the Social Work Code of Ethics in that the Code of Ethics articulates that social workers should respect the values and beliefs of others.

A similar story was told here at SCSU fifteen years ago. That program continues; the reviewers at Missouri State virtually plead with its administration to either close the program or find a way to move the offending faculty from the university. Both of those are expensive options; the publication of this report is indicative that the university is willing to pay that price if public demand grows enough to support the payment.


Sunday, April 08, 2007

Happy Easter 

For those of you who celebrate Easter, Christ's Resurrection not Christ's birth as misunderstood by a grocery chain in England, enjoy the day. For those of you who don't celebrate Easter, still enjoy it. It's bright and sunny here in the Twin Cities but cold.

Saturday, April 07, 2007

Meet a REAL American Hero - An Iraqi Vet 

Meet a true American hero, Neil Duncan, who incurred major injuries from an IED explosion in December of 2005. He has made an incredible recovery and will be coming home to MN. A benefit is being held for him on April 21, 2007, from 2:00 - 6:00.

As Neil will be coming home to Minnesota, his friends and family want to give him a proper welcome home and help him financially as he starts his new life as an independent person. We wish to honor Neil and to express our sincere appreciation for his sacrifice and commitment to our country. This benefit will include a silent auction, raffle, and cash donations as well as a chance for people to meet our hero. All proceeds will be used to help Neil build an independent life adapted to his specific needs - a handicap accessible house, a vehicle with adaptive equipment, etc.

The benefit will be held at the following address:

American Legion Post #172
260 4th Avenue SE
(Hwy. 169 & Cty. Rd. 81)
Osseo, Minnesota 55369

Ways you can help:
1 - Cash donations can be made via paypal - via Neil's website, see highlight below or account #9397625717 at any Wells Fargo Bank.
2 - Donate items for the silent auction - contact on Neil's website.
3 - Stop by and attend the benefit - address above.

For more information, see Neil's website, and while you're there, leave him a comment thanking him for his service.

Friday, April 06, 2007

Jobs Better than Expected 

Or expected by whom? Well, this time, everyone. The job market is humming along - how much press will it get? At least CNN is covering it this time.

A few bullets:
- Average hourly wage up to $17.22
- Wages have increase 4% during the last 12 months
- 180,000 new jobs last month
- Unemployment is down to 4.4% (2.2% with a four year college degree; 2.5% if married with a family - Larry Kudlow)

These successes are due to smart fiscal policy and the Bush tax cuts - they stimulate investment which stimulates growth which stimulates the economy. National debt is being retired at a faster rate than expected.

Let's keep the tax cuts.

Easter egg fights 

A tradition in Armenian households is the dying of eggs for Easter, traditionally using purple onions to get a dark red hue. That's not unusual, most families here in the States dye their eggs. But the difference between cultures comes when I explain Easter egg fights.

Saint Grigor of Tatev wrote in 14 th century about dying eggs red: "We dye eggs red on Easter and its symbolism is that the egg is a model of the world and as wise men say, the egg shell is the earth, the membrane is air, the egg white is water, the yolk is fire. And the red dye symbolizes that the entire world was bought at the price of Christ's blood. And we, when taking the red egg into our hands, proclaim our salvation. That is why we first eat the red egg and then the other dishes."

Almost everyone has egg fights on Easter, but children love this tradition most of all. Before a fight they test the egg's hardness by gently cracking it against their teeth. They find different tricks to win the fights. To fight, they crack the eggs against each other with either end, and the winner is the one whose egg cracks the opponent's egg.

I've heard stories of kids using a small pin to extract the yolk and egg white from their garmeer havgeet then injecting the shell with epoxy to make an impregnable weapon. My father used the more common trick of exposing as little of his egg as possible when you were to strike his egg. (He won a disproportionate number of Easters.)

I wish all readers a happy Easter. I'm off to make choereg, if Mrs. S will let me in the kitchen. NARN is on its "best of" behavior. See you Monday. Krisdos haryatz ee merelotz!


Mrs. Scholar writes again 

This month's offering is about the presence of a substantial Somali community in St. Cloud, motivated by a comment someone made about the lack of ethnic restaurants. She's utterly in love with that restaurant now -- she'd be a lousy food critic, because she likes anything that's new -- but mostly because the people who run the place are marvelous and because she learned a great deal about the country in the process.

One of the commenters notes that we have a disproportionate amount of Somalis in St. Cloud, but immigration patterns are almost always clustering in nature.I was hoping Mrs. S would get more of an answer to why the Somalis chose St. Cloud, but the best we can learn is that families called other families and said this was a nice place. Most of the Armenians in California relate the area's climate and geography to be similar to their homeland. That's not true of St. Cloud and Somalia.


Pushed out of the box 

Many of you probably read James Taranto's Best of the Web, and yesterday's edition included the story of a student, Jenny Ballantine, who had asked a question of the Edwardses during their townhall campaign stop at the University of New Hampshire. She asked a question of the would-be first couple asking for the president to "give me something" because she is afraid she might have been "just dumped in this world for no particular reason whatsoever." The story had been covered initially by Rush Limbaugh, who yesterday had Ms. Ballantine on as a guest. The exchange begins rather dully, but Rush is a great interviewer and gets to the heart of the matter. (This is a little long, but you need to read the context of what I am emphasizing.)
RUSH. ... In the first place, you were not dumped in the world for no particular reason. You have every legitimate reason to be here, as does anybody else. You weren't dumped. There is no mystery why you're here. Those of us who have life, it's a God-given gift, and we only get one, and it is to be maximized and enjoyed and however you choose to pursue it: hard work, combined with pleasure, but this business about when I saw that you mentioned "a world full of hate and prejudice and racism and so forth..."

JENNY BALLANTINE: It's really unfortunate. It's just unfortunate. I know that that's the world that we live in, and that's what's going on right now. It's just really unfortunate.

RUSH: Well, it always has, though. There's always going to be racism. There's always going to be prejudice. There's always going to be bad guys. There are always going to be enemies. There are always going to be reprobates.

JENNY BALLANTINE: There's always going to be war, too, and I understand the reason for war. I actually enjoyed Machiavelli, The Prince, very much so, and I really appreciate his philosophies, and that's what a lot of people use when they engage in war and the aftermath of it, and I respect war, and I understand why there is a need for it, and I understand why there's a need to push for democracy, and I understand the gap that occurred and happened -- the widening gap I should say -- with discrimination and so forth. It's all very interesting.

RUSH: But it's not. See, there is no widening gap of discrimination. It's getting better. See, your historical perspective as with most people, most people began the day you were born. You're 22 years old. You're going to have to really study because history education is pretty inept in this country, particularly in high school, but the discrimination that existed in this country in the forties and fifties, even before, is far, far worse. So much progress has been made in all this! Racism is far less than it was. Prejudice --

JENNY BALLANTINE: Maybe it's because of the multicultural theory class I'm taking right now. (laughs) I think --

RUSH: Well, you're exactly right. You are. Way to go. The multicultural curricula is designed to get you feeling full of chaos and --


RUSH: -- tumult over the unfairness and the injustice of the country, because the teachers -- the people that believe in it -- want that exact thing to happen in your mind.

JENNY BALLANTINE: I hope my professor is not listening to this, but I've always... This is how I feel. She says, "Think outside the box." However, it's "thinking outside the box" on her terms, on her perspective, and the books that we're reading that we're engaged in, it's just full of, as you say, chaos, and it's just full of all these, you know, "This happened and this happened! Oh, God," and it's just like, "Okay, we've addressed that. Why don't we start establishing legislation or whatever else, the Senate, to start working or progress or why don't we go ahead and state what the progress has been since we're just such a screwed-up nation back in the forties and fifties?" I just don't understand the literature that we've been reading, and it's just been frustrating -- and I'm not the only one who feels that way in my class and it's just been really different.
As Rush might say, STOP THE TAPE!!! Notice three key elements in that exchange. First, Ms. Ballantine's lack of historical perspective. There is little understanding of how different the racism of today is when compared to the racism of the 1940s and 1950s. Second, her belief that there should be legislation to fix that. As Thomas Sowell points out, it's government that created the segregated bus that Rosa Parks challenged. Jim Crow was a law. A government powerful enough to enforce equality is powerful enough to enforce inequality, and we all know that power corrupts.

But most importantly is this: I hope my professor is not listening to this, but ... She says, "Think outside the box." However, it's "thinking outside the box" on her terms, on her perspective, and the books that we're reading that we're engaged in, it's just full of, as you say, chaos. Rush points out that this is something that the professor is creating to engage her in the professor's desired actions:
RUSH: ... The United States is the greatest nation, the greatest civilization of free people ever to walk the planet. Now, of course we've had problems, but we are not inherently racist or bigoted or sexist or homophobic or any of that. We have the finest people in the world.

JENNY BALLANTINE: Something that's learned, yeah.

RUSH: No, it is something that's taught to you. It's something that people have been trying to stuff in your skull full of mush and get you to believe this. There's a certain cadre, a certain group of people that want you distrusting your own country. They want you suspecting it. You have more opportunity as a human being here. All you have to do, Jenny, is find out what it is you love, and 22 is not too old for that. You're thinking. I know you're self-absorbed right now, you're self-focused, and you're looking at yourself at 22 and you're thinking, "My gosh, I'm a failure! I'm not going anywhere." You haven't even begun to crack the egg! You've barely hatched yet. All you need to do is find out what it is you really love, whatever that is -- and don't let anybody talk you out of it, and when you find out what that is, talk to people who have done it and who have succeeded at it, and let them mentor on you or motivate you. Don't talk to people that tell you, "You can't do it," or, "It's not for you," or what have you. You know, learn all this stuff that you're learning. Keep an open mind, Understand that everybody teaching you something, including every history book, has an agenda, and don't think that you're an idiot. Don't think that you're not bright. You're capable of learning anything! Whatever you do, don't run around and think that what you think is wrong, or what you think is incorrect.
That's the answer. She wants something because the people teaching her have told her both that she is not "thinking critically," meaning, she hasn't filtered her thoughts through their prism of seeing everything she has as a product of white privilege, that she has earned nothing, she is worth nothing. And when her country tells her she is entitled to the fruits of her own labor they say the country is advancing her privilege and that she doesn't deserve it. So she goes to beg for something from the Edwardses because she hopes they can do for her what she's told she DOES NOT DESERVE to do for herself. They want her to deny her own opportunities for success. Yet humans have an innate sense of what is right, and a natural inclination to truck, barter and exchange. They want to produce for themselves because it feels right. Thus they must be told repeatedly to "think outside the box" by people who do not respect the box, for within the box these teachers see their own failure, their own lack of power, their own lack of control.

"The man who lets a leader prescribe his course is a wreck being towed to the scrap heap. " -- Ayn Rand. Substitute "academic" or "intellectual" for "leader", and you have the problem of Jenny Ballantine.

UPDATE: Taranto notes this conversation (I took the liberty of sending him this post) and concludes:

The ideologies of "self-esteem" and "multiculturalism" are two sides of the same nihilistic coin. "Self-esteem" devalues achievement and responsibility, which are the sources of genuine self-respect. And "multiculturalism" it is merely a pose of opposition to one's own culture; it entails no real regard for different cultures.

We were too hasty to mock Jenny Ballantine yesterday. What seemed a show of self-absorption was really a sincere if clumsy attempt by a confused young woman to connect with the real world. Three cheers to Rush Limbaugh for helping her along the way.

Absolutely so, and three cheers also for Taranto's recognition of the dangers of the "self-esteem" ideology.


Thursday, April 05, 2007

How do you say "d'oh!" in British? 

Numismatists love mistakes -- they are collectible. But I don't know as I'll run fast to get hold of this error. The new 20-pound note from the Bank of England picturing Adam Smith is flawed.

The Bank of England also reproduces a stylized print of a pin factory and some workers and adds the comment: �The division of labour in pin manufacturing
(and the great increase in the quantity of work that results)�, which is a most
astonishing statement.

Mervyn King was a distinguished professor of economics, most of his fellow members of the Monetary Policy Committee are economists or finance specialists, who would have attended lectures on the division of labour � some might even have read Wealth of Nations.

Yet, I would not have thought the conclusion the Bank has printed under the pin factory that it resulted to a �great increase in the quantity of work� would have passed their scrutiny. If that was the result of the division of labour then any government could achieve such increases in the quantity of work by simply creating more regulations and teams of inspectors to enforce them. Governments are �make work� institutions; commercial economies seek to economise on labour, to create wealth, which is the �annual output of the necessaries, conveniences and amusements of life�, as Smith put it.

The division of labour increases the quantity of output per worker, not the quantity of labour per unit of output. In Smith�s example (Wealth of Nations, I.i: p 15) one worker takes a day to make one pin if he does all the work needed; with a division of labour, ten men can complete the 18-steps of pin manufacture �upwards of 48,000 pins a day�.

To reach the same output of 48,000 pins per day it would take 48,000 men to do it, which is beyond doubt a �great increase in the quantity of work�. It would take one man 131 years to achieve this total. But that was not what the division of labour was about and the economists on the Monetary Policy Committee of the Bank of England should have known this when they approved the proofs some months ago. If they didn�t know this I wonder what their qualifications were for selection for the Monetary Policy Committee?

Here's the offending note, you should take the virtual tour to look at its back to see the error. (See the new twenty pound note therein. A bigger .pdf file is here.) Here's Mr. Smith himself. It's interesting that so far nobody has seemed to report this basic error, though the note has circulated for more than three weeks. The note was outsourced, and apparently the proofreaders didn't read their Smith.

Thanks to reader Tim Slade for the pointer.


I got it bad 

(A weak explanation for light work this afternoon.)

Matsuzaka 7.0 6 1 1 1 10 1 1.29

Dice-K Fever, baby. Catch it! Ha, Nate Silver.

Behold the Kaibutsu.


How multi-culti indoctrination is born 

Often it's not out of thin air but from an event. Here's the latest:
Ohio Dominican University will require all students to take a multiculturalism class starting this fall and will take other steps to deal with the aftermath of an outbreak of bigoted vandalism on the campus last summer, according to an article in today�s Columbus Dispatch that describes the recommendations of a report by the university�s Presidential Task Force on Multiculturalism. The vandalism, which included racist graffiti, remains unsolved. The Roman Catholic university also is creating a multicultural-affairs office, and will increase programming and support for minority students.
And use resources that previously went to other academic endeavors. Of course, it's not like anyone ever fakes those things. A reward for $1000 is offered for information on the crimes; if one wanted to get to the bottom of this, I'd think you would juice that bounty.


MSM Filtering, again - Iraqis are Better - Just ask them! 

Not that you will find this information on the nightly news. This is just another example of how the main stream media (MSM) wants to prevent Americans from learning the big picture. Over 5000 Iraqis were surveyed in a poll conducted by ABC, USA Today, BBC and a German TV station - 49% positive, 26% negative. Now what may account for the negativity? Could it be the bias in the MSM that continues to hammer on only the problems?

Here's some numbers in perspective - American deaths historically:
Civil War - > 600,000 north and south; adjusted for population growth, that number would be 6,000,000 today
WWI - > 100,000 - again a smaller population
WWII - > 400,000; adjusted for population growth, would have been 800,000 today
Viet Nam - > 50,000

Now, I regret the loss of every single life given so the rest of us can be free. What is extremely frustrating, though, is the total lack of knowledge by today's youth regarding sacrifices made in the past. In addition, the inability to put today's sacrifices in context with the sacrifices our ancestors made bodes poorly for the future. The current, blame the Americans for everything mantra, ignores the tremendous scarifices made by Americans for others and puts liberty for the planet at risk.

Remember, if the Union Army had stayed in the south the Jim Crow laws may never have been passed and former slaves would have gotten the land they were promised. The Union Army left, discrimination took over. If Hitler had been stopped in the 1930's, who knows how many of the 30,000,000+ deaths would have been avoided. We're in Japan 40+ years after their surrender; we're in Germany, 40+ years after their defeat.

There is a reason to stay! Besides, your kids may thank you some day.

Wednesday, April 04, 2007

An Iraqi Speaks 

Tuesday, April 3, John Kline, Congressman from MN's Second Congressional District held a town hall meet at Lakeville South HS. During the session, Freddie, an Iraqi rose to speak. The comments below are from him, at the meeting and afterwards.

Freddie is educated and had a decent future but when the Americans came, he decided he had to do something because he realized the propaganda he'd been fed did not fit the actions he saw. American soldiers had come from far away, leaving families and friends to defend the US as well as Iraq.

As he told me, Iraqis are waking up from a long time sleep under a dictatorship and darkness but just like the Americans, Iraqis want to be free. If not for the US, nothing would have changed in Iraq. Saddam invaded Kuwait, forced a war with Iran and people had to fight or get killed anyway.

Some Americans take freedom for granted. They forget that freedom is something that needs to be defended to be kept for future generations. People died for America's freedom.

At the meeting, he said, "I am thrilled to be here because it is the first time I have ever experienced an event like this. Viewing democracy in action makes me shiver. Don't, give up on us, don't give up on freedom. Iraqi people want freedom, too. The US stands as a symbol for freedom even to non-Americans all over the world."

Serving the state 

While I was reading Jeff Kouba's reply to a Nick Coleman column on how to soak the rich -- you're a braver man than me, Jeff -- a thought occurs to me. He quotes the now-infamous incidence report at page 43 while discussing the highly-regressive sales tax:
Higher income households spend a smaller portion of their income on items subject to the sales tax. This is partly due to their higher savings rates and partly to the mix of consumer goods and services they buy. Hence, tax burdens as a proportion of income tend to decline as one moves up the income scale.
Emphasis added. So here's my question: Why do we exempt services? For example, the state of Washington taxes your purchase of time in a tanning bed. I've said on the air that I think people should be taxed for their tattoos because, well, I think tattoos are stupid. But to be serious, why don't we?

Here's the answer, from a discussion about its use in California. It's bad for business, even worse than what the DFL is proposing.

I also think that the burden of the service sales tax might be felt more by the DFL's base of support. Can you imagine Mike Ciresi paying 7.15% of his legal services revenue in tax to the government? He might just hightail it to South Dakota!

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Pelosi's Propaganda Pander 

The point of the original post was the propaganda advantage Pelosi has given to people who believe that beheading people for their religion is okay. Pelosi smiling at a shrine to a beheading, especially while wearing a headscarf, provides major propaganda for the Islamic terrorists.

The issue is not wearing a headscarf per se, it's the headscarf, the smile and through her behavior, an implied acceptance of a brutal subset of Islam that has no qualms about filming the beheadings of innocents and broadcasting them to the world.

Many on the left (both in comments on the original post and elsewhere) have pointed to Republican women wearing headscarves in a mosque or a Catholic church. Such arguments for moral equivalence ignore the central difference here: Pelosi is participating in a celebration of a beheading. This is a Pelosi propaganda pander that helps our radical Islamist enemies.

KING ADDS: I noted in comments in a previous post of Janet's that Speaker Pelosi at one time favored the restriction on official contact with the Syrian government. She voted for the Syria Accountability and Lebanese Sovereignty Restoration Act of 2003, which instructed the president after a finding that Syria was still engaged in state terror:
(2) the President shall impose two or more of the following sanctions:
(A) Prohibit the export of products of the United States (other than food and medicine) to Syria.
(B) Prohibit United States businesses from investing or operating in Syria.
(C) Restrict Syrian diplomats in Washington, D.C., and at the United Nations in New York City, to travel only within a 25-mile radius of Washington, D.C., or the United
Nations headquarters building, respectively.
(D) Prohibit aircraft of any air carrier owned or controlled by Syria to take off from, land in, or overfly the United States.
(E) Reduce United States diplomatic contacts with Syria (other than those contacts required to protect United States interests or carry out the purposes of this Act).
I note that Republicans have also gone this past week to Syria. This too is regrettable, as the White House noted on Monday.

Q Thanks. The Speaker said in Beirut today that -- first of all, she's criticizing the White House for what she says is ignoring other Republican lawmakers who have made trips to Syria in recent days. And, also, she said she thinks it's a good idea to establish facts and to try to build confidence with Syria. Why is that not a good idea? And how is that just a photo op?

MS. PERINO: Let me unpack that a little bit. First of all, last week when I was asked about her specific trip, I said in my comments that, in general, we discourage members from going to the region. And that is true. In fact, I looked back, when Tony Snow was asked at this podium months ago, when Senator Nelson made a similar trip, he said the same, that this was a blanket policy -- but I was asked a specific question about Speaker Pelosi, which is why I said that.

Speaker Pelosi is a high-ranking United States official. Nothing changes -- nothing has changed in Syria's behavior over the years when high-ranking U.S. officials go to see them. We sent Secretary Powell early on; the behavior doesn't change. Syria uses these opportunities to flaunt photo opportunities around its country and around the region and around the world, to say that they aren't isolated, that they don't need to change their behavior, and it alleviates the pressure that we are trying to put on them to change their behavior.

And by changing their behavior I mean as in, stop undermining the democratically elected government of Lebanon; stop allowing foreign fighters to flow from Syria into Iraq, in which they are then killing American soldiers and innocent Iraqis and Iraqi soldiers. They are state sponsors of terrorism, of both Hezbollah and Hamas, and they support Palestinian terrorism.

And so that was the reason that we said that we discouraged her from going. But that policy applies to all.
If Speaker Pelosi "thinks it's a good idea to establish facts and to try to build confidence with Syria," she should ask to repeal the Syria Accountability and Lebanese Sovereignty Restoration Act. She has a majority that could do it; if not, I'm sure there's some more peanut research that needs funding.

But no, it's not class warfare 

As I said on the show last Saturday while interviewing Sen. Geoff Michel, I think the Minnesota legislators who voted for the tax increase that day would use their week off to lobby for support. Here's an example from the Bemidji area.
Republican Gov. Tim Pawlenty holds fast to his pledge to raise taxes, but [Rep. Brita] Sailer [DFL - Park Rapids] said the House-proposed hike to higher income filers affects only 37 filers in Beltrami County, 21 in Hubbard County and none in Clearwater County. It would hit 6,763 filers in Hennepin County.

�This plan for property tax relief is really needed in rural Minnesota,� she said. �This is a way of evening out costs.�

Tax reform means "Don't tax you, don't tax me. Tax that fellow behind the tree." -- Senator Russell B. Long (Louisiana)

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That's a nice idea 

A sub-blog of Division of Labor is using music lyrics to teach economics. Several good assignments are there. I want Mitch to look at Youngstown.


Tuesday, April 03, 2007

Holy Toledo, let's take the under! 

Skip Sauer has posted twice on the University of Toledo point-shaving scandal. In an article Saturday in the St. Augustine Record is a more complete story that originated in the Detroit Free Press. Skip asks:
The idea that an operator could get $100k down on a Toledo game without the line adjusting or being taken off the board -- one of you betting hounds can check the data on that -- suggests to me that online sportsbooks may have added a lot of liquidity to the point spread market in recent years.
The size of the legal college betting market was estimated to be $2.7 billion in 1997 (Sinclair 1998) and most likely has grown much since then. Online books have come since then. And the bets placed in this scandal were mostly in illegal books rather than the legal markets. And yet it was a tip by a line-setting firm in Vegas that led officials to arrest the suspects. I don't think that if $100k was laid over several days in several places that it would be seen much.

The part of this that made it harder to see (I think) was that the strategy played is imperfect and a little puzzling. From the St. Augustine piece:

Players who agreed to participate were told about the betting line -- the point spread for a particular game -- the affidavit said.

"Once Gary and the players knew the line, they would decide if they could beat the spread," the complaint said. "If they were picked as an underdog by 10 points, they would decide if they could beat the 10-point spread. If they were picked as a favorite by a certain number of points, the players would decide if they would most likely win by that much.

"Once Gary consulted the players, he would decide how he wanted them to play the game to affect the outcome," the affidavit said.

It wasn't therefore always point-shaving; at times the players were trying to win by more than the spread. The player at the middle of the scandal, RB Scooter McDougle, had been able to participate in the scandal himself in 2004 when he gained a bunch of yards and scored eight TDs for the Rockets. But then he busted up his knee with two minutes to go in the team's conference championship game against Miami (O.) which the team won 35-27. Miami was a one-point favorite and has never been the same player since.

BTW, some think that this might extend further, including current NFL QB Bruce Gradkowski. Running backs have much less impact on games than do quarterbacks or kickers.


Pelosi Allows Radical Muslim Propaganda Coup 

Violently radical Muslims today use beheadings of Christians, Jews, Buddhists and Hindus as a terrorist tactic. John the Baptist was beheaded by a cruel tyrant, King Herod of Jerusalem.

So what does Nancy Pelosi do? She puts on a headscarf to admire (smilingly!) the entombed head of John the Baptist in a Muslim mosque in Syria. When was the last time you saw Pelosi wear a head scarf in a Catholic church?

The anti-American propaganda this woman has given the very people who want to totally destroy us is immense. Just remember this the next time you have a choice to vote for someone for freedom versus someone who wants to destroy free thinking.

MN's own Congressional Representative, Keith Ellison who is with Pelosi in Syria, should have been knowledgeable enough to prevent this, if he wanted to prevent it.

Hold that thought 

I think this snow is driving Derek Brigham crazy. Here's his latest poster (from this post). I think that one belongs on the right-side index, don't you?

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Shakedown Cuomo 

The New York attorney general, Andrew Cuomo, has obtained settlements from 36 colleges and universities that received letters threatening lawsuits over student loan practices. Cuomo's office gets $2 million for a fund "to educate students and parents about the student loan industry." What were these schools doing?

In some instances, loan companies made payments to the institutions linked to the number of students who borrowed. One lender invited university officials to an all-expenses-paid Caribbean retreat. At several institutions, students� questions about financial aid were fielded by call centers that, unknown to the students, were set up and operated by loan companies. Each arrangement, critics say, embodies a conflict of interest.

Lawyers in Mr. Cuomo�s office are in various stages of negotiations with scores more colleges and universities, and with other lenders, seeking compensation to students and signatures on the code of conduct, according to officials in Mr. Cuomo�s office.

Under today�s agreement, N.Y.U. will distribute to students nearly $1.4 million that it received from Citibank over five years. The University of Pennsylvania will distribute $1.6 million that it received over two years. The amounts for the other three universities are much smaller: $164,084 over two years at Syracuse, $80,553 over one year at St. John�s University, and $13,840 at Fordham.

Three more universities have agreed to adopt the code of conduct, but are not making any payments under the agreement: the State University of New York system, St. Lawrence University and Long Island University.

NYU claims that the money it received back from Citibank was used for financial aid and saw nothing wrong with their behavior. From the Chronicle of Higher Education (subscriber link):

But officials at several universities that agreed to settle with the attorney general said they had little choice. Although they defended their student-loan practices and criticized the tone of Mr. Cuomo's investigation, they said going to court over the practices would be costly and would bring more bad publicity.

John Beckman, a spokesman for New York University, said, "We don't think the investigation has been fair with regards to NYU." He said the university saw nothing wrong with how it recommends lenders to students, or with a nonbinding revenue-sharing contract with Citibank that guaranteed the university 0.25 percent of the value of some of the university's loans. Citibank offered the best rates for students in any case, he said.

But he said NYU chose to sign the settlement anyway.

"In the end, we had no interest in further legal proceedings," said Mr. Beckman. "I think every university has to be mindful, from a cost perspective, of engaging in such a thing."

The financial aid professionals are furious with Cuomo's grandstanding. But Cuomo is just following the footsteps of Eliot Spitzer in moving to the governor's mansion from the AG's office. That is one reason why I believe we're better off having AGs appointed by an executive branch.


Opening to the oldies 

Yesterday was Opening Day for my Red Sox, a sad affair in which the team lost at Kansas City, 7-1. I turned on the radio at the office to listen while I worked and, as is my wont, had it on early enough for the National Anthem. To my shock and horror, the anthem was performed by REO Speedwagon, a band that had one decent album in my college years and hadn't been heard from since. I walked down the hallway to a colleague's office who, being of similar age and musical taste, I thought would appreciate the mildly humorous appearance. (Lo and behold, they also performed on the national TV opener the night before. Turns out they are issuing a new album.)

After the loss, my friend wrote to me:
Because the Kansas City Royals won the first game of the season, the following policy will be implemented:
(1) whenever the Royals steal a base, the song "Take It on the Run" by REO Speedwagon will be played
(2) whenever the opposition's starting pitcher is replaced, the song "Time for Me to Fly" by REO Speedwagon will be played
(3) whenever there is a rain delay, the song "Ridin' the Storm Out" by REO Speedwagon will be played and
(4) the circle road around the parking lots will be changed from Dubner Circle to Riverside Avenue, so we can play "157 Riverside Avenue" by REO Speedwagon as people exit the stadium.
The Hideki Okajima era has started in fine form. You might say Our Time is Gonna Come.

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Monday, April 02, 2007

"Subvert the dominant paradigm" 

There's a bumpersticker with that slogan on a colleague's office door. It seems to be the attitude of a faculty member at the University of Wisconsin at Lacrosse who thinks his job is to counter right wing ideology. When a student had the temerity to suggest that a management course that discussed immigration issues might need some balance -- and offered some links to alternative viewpoints -- the professor responded:
I get really tired of right wing stuff. Surely you get enough of it. Do you ask for additional readings in your right wing classes. Obviously not. I resent your insulting assumption that you have the right to teach my class or that students are not familiar with right wing racist crap on immigration. Of course they are. My course is not being taught to reinforce right wing ideology. Don't you get enough of this in other classes, or do you need EVERY class to be consistent with extremist views.
He believes his job is to be the antidote for the "right wing racist crap on immigration" that students "of course" "are familiar with" from their other classes. It is not only demeaning to students but also to his unnamed colleagues.

This from the chair of UWLAX's "Complaints, Grievances, Appeals & Academic Freedom Committee."

Professor Betton, if you'd like to respond to my opinion that this email was unprofessional and undignified (I don't know what ethics require of management professors, but a few read here and will respond if response is needed), the floor in the comments section is yours. Forgive me if I don't wait around for your response.


Should savings influence the net price of college? 

I've been puzzling over Richard Vedder's post "Tyler's lament", on whether those who save for college for their children are penalized by university financial aid offices by a reduction in scholarship and loan offers. Vedder writes:
I was struck by Tyler's main point: his family was responsible and saved for college, and as a consequence receives little financial aid. Other kids from families with similar financial circumstances get more assistance -- often because their families were less responsible, spending more through the years and doing less saving for college for their children. Tyler, in effect, said, "my parents are being punished for being responsible." Tyler, of course, is right.
I asked a colleague over the weekend who has a very bright son applying to selective colleges, and who by his own admission is probably not the least profligate parent. He reported back that there was no such effect in his case; his impression seemed to be that income was more important than savings.

My complaint about FAFSA, the common form parents fill out to help their children get financial aid (created by the US Dept. of Education, mind you), is that it is a revenue-creating device that provides every school identical information, likely to be more truthful and more invasive of your financial situation, and allows schools to determine one's ability-to-pay. Savings is perhaps not as relevant. You may not save in accounts specifically for your children, but the net present value of your stream of labor and capital income can be borrowed against to finance the child at any rate. If you view savings as a smoothing mechanism for lifetime consumption, the lump of wealth you have in the kid's education IRA is not a big determinant of your ability to pay.

What about willingness to pay, though? A quick thought experiment: You can use student loans repaid by parents as a way of transferring income to your children. You have two goods to consume -- a good you consume yourself, and the benefit you receive from transferring goods to your children (that I assume you care about.) You do this over a lifetime. Student loans make possible transfers that smooth out the budget constraint -- you can transfer more future income (at lower cost, if student loans have subsidized interest rates) than you might be able to otherwise.

This argument abstracts from any benefit from the education itself. It could be a transfer of income to the kid who will view college as a four-(plus!-) year party. If there is a return benefit to the parent of the child's education, that makes the problem stickier but I don't know if it changes the story. If you think otherwise, comments are most welcome!

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Banner time! 

Our good friend Derek Brigham (whom you should thank for the banner at the top of this blog) has designed some delightful banners for your use if you think the Mr. Creosote Democrats have been spending too much money.

Now the buffoons are off on a nine-day whine-a-thon about how we should pay more for their interest groups' grab bag. An example from the chair of the District 14 DFL:
The broad "middle-income" households ($47,000 to $105,000 a year) pay 12.3 percent of their income in state and local taxes.

Those tragically exploited higher-income folks (more than $355,000 a year) pay 9.6 percent. And by 2009, the gap widens even more: 12.5 percent for the "middle class" and 8.9 percent for that top 1 percent.
Let's suppose this is true. Recall again the argument for how this calculation is done. It's true because after you levy a higher tax on higher incomes than lower -- as is done now -- the wealthy avoid some of the tax and shift it onto others. So somehow increasing the tax further would lessen the amount shifted onto lower income classes by higher prices and fewer jobs? No, in fact there would be MORE shifting. It is the nature of the Laffer curve that higher tax rates lead to higher tax avoidance behavior.

So even if you decide that class warfare and the crushing of the business class is your idea of fairness ...

If you are earning $100,000 per year or less, do you agree with Sviggum and our governor that you should cover the gap in undertaxation that those earning more than $355,000 enjoy?

Is this the language of "class warfare," as our Republican friends often invoke? You bet. The war is against the middle class, and Paris Hilton is winning.

... the fact is you're going to pay it regardless. The only way to make sure the rich pay the tax is to enslave them, force them not to raise prices, not to lay off workers, and not to leave Minnesota. Stopping the shift is a giant step down the road to serfdom.

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