There are many news outlets, including blogs, criticizing Mrs. Clinton for her flip- flopping in last night's Democratic Presidential Debate. So be it. What got my attention were the comments made by her staffers today, that Tim Russert was too tough in his questions, unfair, biased, etc. From their defense of their goddess, it appears they have not bothered to watch the questioning of Bush's spokesperson by the Washington Press Corps or questions posed to Republican presidential candidates.

Hillary, honey, if you can't stand the heat, get out of the kitchen. Last night you were asked very valid questions and you could or would not answer them, period. If you cannot handle questions from news people, you will never be able to make a case for Americans. Therefore, you should not be president. You may think you can do the job but if you cannot answer specific questions directly either you don't have an answer or you have an answer you know the American public will not buy and you want to avoid letting us know.

Regardless, you came across a shrill, unprepared, rude, and panicky candidate. You will have to be tougher than you have shown. You cannot play the game as your hubby did - he didn't have to deal with the threats to freedom that we face today and in the future. Either grow up, make your case, state your position or get out of the kitchen.

The answer is, "it depends!"

It depends on your choice of how you keep it real (to use my previous metaphor). Terry Fitzgerald finds that if you use the same deflator for all three series commonly used to discuss real wages -- average hourly earnings, median hourly wage, and national labor income per hour -- and you look at the same types of jobs being measured, average real hourly earnings rises 10% between 1975 and 2005, rather than falls 4%. Median hourly real wage rises 20% rather than 12%.

It also depends on whether or not you count benefits, which national labor income includes. Fitzgerald finds that counting in benefits would help you shrink the three figures to 16% for AHE, 28% for MHW, and 39% for NLI per hour. That still is a pretty big difference, which Fitzgerald thinks is partly accounted for by the difference between median and mean, and the difference between the groups of workers covered in the three measures. But that won't likely take care of all of those differences. And even if you take the largest of the three numbers, that's a real wage increase per year averaging only 1.1% -- lower than most other 30 year periods in U.S. history. (Fitzgerald seems to prefer the 28% figure for the thirty years, or around 0.83% per year over the time.)

So when you hear about the declining middle class yet read that things are just grand, the question to ask is, what exactly are they measuring? Skepticism is highly recommended.

Labels: economics

D.J. Tice has been posting on The Big Question some excellent material on the Social Security debate that I really hope will happen. While he did some factchecking of Hillary Clinton's claim that the global war of terror threatens Social Security -- which could also be said, albeit to a smaller degree, about earmarking transportation money for bike trails -- he stated that the Republicans have been "less than wholly impressive" on Social Security, except for Fred Thompson. In an earlier post he notes Thompson's position is to switch from indexing benefits to wage inflation to indexing on price inflation.

It’s a real plan for restoring Social Security’s solvency — real enough to be scaldingly controversial. By most estimates, so called price indexing would cause future benefits to fall enough to balance Social Security’s books without tax hikes, about 25 percent from the levels now promised. In effect, it would simply cut benefits to match Social Security’s existing revenue stream.

All the same, price indexing would still mean that future retirees would receive real benefits, after inflation, equal to those of today’s retirees.

Here's an example of the kind of attack on the Thompson plan you can expect, from our liberal friends at the Center for Budget and Policy Priorities. The price indexing idea has been around for quite some time, and was considered the starting point for discussions President Bush tried to have in 2005; you might remember how well that went. Economists and public policy specialists have known of this option longer than that.

So what's wrong with it? For one, it means you cannot grow your way to funding Social Security liabilities (unless all of a sudden profits and interest grow much, much faster -- not a position likely to be supported by CBPP.) Wage indexing means that any gains in productivity created by future generations will be transferred off to the retired generation. Insisting on the maintenance of wage indexing means you are moving the cost of public pensions increasingly onto future generations.

Second, as David Leonhart's column today makes clear, the Social Security problem is only part of the larger issue of unfunded liabilities we have. Medicare is much larger, and nobody seems willing yet to discuss that issue. Last night Rep. Kucinich argued for extending Medicare to all, and the other Democratic candidates weren't far behind. Republicans aren't any better. When Ben Bernanke brings it up, he gets scolded: Why should presidential candidates be expected to be any bolder? Well, here too, Thompson has at least said he wants to address the topic.

Labels: economics, politics

This is the sort of thing that gets us a bad name. Tyler Cowen correctly points out that we probably have the right structure to giving.

[I]n-kind transfers are often more efficient than cash gifts, and that holds for public policy as well. (Imagine giving "money to buy kidney dialysis," instead of "kidney dialysis," and see how many people fake kidney disease.) The candy transfer insures that a) mostly young kids do the asking, and b) at some point everyone just stops and goes home.

Now we have a rule in our house not to buy candy until 10/31, because there is a high degree of fluctuation in visitors depending on weather. (Currently about 50 and breezy.) I did not create this rule; Mrs. S did (though I think it's just keeping candy out of the house due to her own lack of willpower.) But I wonder now -- if our time is more valuable, why don't we give large, low-value items? Heavier bags cut down the travel of the trick-or-treaters. The loss of fruit as a treat for Halloween has made bags lighter. If Cowen's logic is correct about why candy over cash, why not press the advantage further by giving candy in heavy wrapping?

Someone brought candy into our office today, though we are closed before any trick-or-treaters would come. Why would they do that?

Labels: economics

Mitch says we need to pander to him to get his endorsement for MOB Mayor. I don't think I can afford his breakfast tab on Saturdays, and he has only his vote to give -- he's banned everyone else but Flash from his blog. So we would like his support but need to focus on those whose support we can use to push us over the top.

Thus we turn to the chimp. We have not yet gotten Bobo's support, but we have asked his brother Yoyo to help us out here.
We have already awarded Yoyo the bachelor's degree, thus his tassel, and made him Director of Recreation in our new Administraiaiaiaiaiation. We expect that Bobo will withdraw from the race and join Yoyo and me on the ChimpEconomistBushIsBobo Ticket. Atomizer does martinis; we do daiquiris, name your flavor. Yoyo, naturally, likes banana. And he gives generous pours.

Voted yet? Once a day, here. Borrow your friend's computer while they're grabbing coffee and vote again.

Labels: Bobo the Talking Chimp, MOB

My review of the movie is up at the The Minnesota Free Market Institute. I'm glad they picked that title for the review; I didn't give them one for some reason.

Labels: higher education

If you recall the 2004 election, there were many complaints by Democrats of how the Republicans cheated. That's because the Dems lost. In 2006, the Dems won big time. Prior to the election, there were cries of voter fraud, etc. Well, the Dems won - never heard another word, did we.

ACORN, Association of Community Organizations for Reform Now, members completed and filed more than 1,800 fictitious voter-registration cards during a 2006 registration drive in King and Pierce counties in the state of Washington. Seven were accused of voter fraud, three admitted guilt, one has been sentenced.

Did you see this on the evening news? No, I didn't think so.

Labels: elections, Freedom, Media

We spoke in August on the Final Word with Lee McGrath and Scott Bullock of the Institute for Justice about their case defending a Minneapolis City Council decision to end the use of entry restrictions into the Minneapolis taxi market. The case was in court because existing members of the taxi cartel argued that changing the regulation and removing the restriction was a regulatory taking. IJ reports that they have won a ruling from the magistrate.

Can an entrenched cartel of Minneapolis taxi drivers violate the civil rights of entrepreneurs and consumers?

No, according to U.S. Magistrate Judge Franklin L. Noel. In an opinion released today, the judge recommended that a lawsuit brought by members of the taxi cartel to overturn the city’s free-market reforms be dismissed.

In his opinion, Judge Noel determined: “The [established] taxi vehicle license holders do not have a constitutionally protected freedom from competition.”

Taxicab regulation has long been seen by economists as an entry barrier protecting cab cartels. Here and in Canada, such regulations make it difficult for the poor who want to travel to places inconvenient by bus. (Here's a survey of the literature.) In St. Cloud, one of the most frequently cited problems for people with modest or low incomes is the lack of public transportation; yet we have had a system that has prevented immigrants from even holding a license. While St. Cloud has a pretty good bus system, there are still places of work that would be difficult for the car-less to get to regularly. ("I used to walk to work, in the winter, in the snow, uphill, both ways." Yeah, I hear you.) If cabs were to operate freely in the city, could workers find better jobs off the bus routes, get their children to child care more easily, and get to cheaper grocery stores for food? It might be worth the effort.

Labels: economics, Minneapolis, St. Cloud

Suppose you have a high school junior or senior looking to attend a nice college. Nothing real fancy, mind you, just a reasonable quality school with faculty who commit to teaching, a nice campus and dorm life, etc. You get the materials from one school, whose Office of Residence Life has an education program designed for those living in the dorms. It has a set of "competencies" for your child to develop in the interest of learning "citizenship." These include

• “Students will recognize that systemic oppression exists in our society,”
• “Students will recognize the benefits of dismantling systems of oppression,”
• “Students will be able to utilize their knowledge of sustainability to change their daily habits and consumer mentality.”

You think "that stuff looks pretty liberal," but you decide that because it's a public school (so tuition is reasonable) they probably can't go too far in pushing this stuff, right?

Welcome to the University of Delaware.

Students living in the university’s eight housing complexes are required to attend training sessions, floor meetings, and one-on-one meetings with their Resident Assistants (RAs). The RAs who facilitate these meetings have received their own intensive training from the university, including a “diversity facilitation training” session at which RAs were taught, among other things, that “[a] racist is one who is both privileged and socialized on the basis of race by a white supremacist (racist) system. The term applies to all white people (i.e., people of European descent) living in the United States, regardless of class, gender, religion, culture or sexuality.”

The university suggests that at one-on-one sessions with students, RAs should ask intrusive personal questions such as “When did you discover your sexual identity?” Students who express discomfort with this type of questioning often meet with disapproval from their RAs, who write reports on these one-on-one sessions and deliver these reports to their superiors. One student identified in a write-up as an RA’s “worst” one-on-one session was a young woman who stated that she was tired of having “diversity shoved down her throat.”

...At various points in the program, students are also pressured or even required to take actions that outwardly indicate their agreement with the university’s ideology, regardless of their personal beliefs. Such actions include displaying specific door decorations, committing to reduce their ecological footprint by at least 20%, taking action by advocating for an “oppressed” social group, and taking action by advocating for a “sustainable world.”

In the Office of Residence Life’s internal materials, these programs are described using the harrowing language of ideological reeducation. In documents relating to the assessment of student learning, for example, the residence hall lesson plans are referred to as “treatments.”

You can see other stories like this now through Thursday night by watching Indoctrinate U at the Oak Street Cinema in Minneapolis.

I've written years ago about our own student orientations and those given to others and their parents, but this one appears to jump the shark.

UPDATE: In comments, Jeff makes a one of those "wish-I'd-thought-of-that" point:

I'm less worried for the average dorm-dwelling student (who can probably ignore this nonsense; in reality, it's rarely "mandatory") and more troubled by the fact that becoming an RA is apparently conditional on professing a particular set of beliefs. The RAs are the ones who are most likely to find themselves in the awkward situation King is describing, wondering if thoughtcrime is going to prevent them from gaining the assistantship for which they are otherwise qualified.

George Borjas knows a thing or two about this sort of thing as well:

Why am I super-sensitive to this? Because as a young boy I myself went through a one-year course in ideological reorientation. I attended an elite elementary Catholic school in Havana. Castro took over, the Catholic school was shut down, and I got transferred to a revolutionary school where the entire day was spent teaching Marxist-Leninist ideology. Luckily, this lasted only a year and I continued my education in Miami (where the entire school day was instead spent talking about the upcoming football game). I am certain that the blind zealotry that I saw in the young teacher's eyes that year turned me off from that particular way of viewing the world for the rest of my life. One can only hope that many of the students forced to attend the re-education programs at Delaware and other universities react in the same way.

Borjas says he is looking forward to seeing Indoctrinate U.

Labels: higher education

If you live in the Twin Cities, look around you. One of your neighbors might be getting money from agricultural subsidies. Over a billion dollars in an eighteen month period. While there have been repeated attempts to limit farm subsidy payments to only those who are actively participating in farming, the article claims some are getting checks merely for participating in a conference call once a year.

There's a new farm bill working its way through Congress right now, and fixing this problem is not on the agenda. If someone would like to wear the mantle of fiscal conservative -- let's say you, Rep. Bachmann -- how about a proposal to stop this silliness?

H/T: Mark J. Perry, who has a map of where the money goes.

Labels: economics, Minneapolis

I was at the Patriot Saturday when Michael noted he received a press release from the Governor's office that said a deal he had agreed while in India regarding Essar Group's purchase of the Minnesota Steel and to construct a new plant in Hibbing. News reports describe the problem:

The Essar Group closed Monday on a deal to buy Minnesota Steel, planning to begin construction on a steel mill near Hibbing early next year -- a project that Pawlenty said holds great promise for the state of Minnesota. But later in the week, federal officials contacted the governor to inform him of Essar's possible ties to Iran.

Reuters reports that Essar plans to begin work on an $8 billion to $10 billion oil refinery in Iran early next year, working with the National Iranian Refining and Distribution Co. Such a deal may constitute or lead to business practices that are prohibited by the U.S. government. Pawlenty said Essar officials have confirmed talk in Iran, but say they do not have any commitments there.

If the federal government finds Essar's actions in Iran to be a violation of U.S. policy, Pawlenty said he would withdraw his support for the company's planned steel mill on the Iron Range.

The deal includes $30-60 million in state money for the Iron Range, and potentially scotching the deal has got the Ranger Mafia up in arms.

"It never ceases to amaze me how this governor can change his mind from one day to the next. It's frustrating that a project we've been working on for seven years is finally picked up on by the Twin Cities media a couple of days ago when the governor says it's going to be a good deal for the Range and state. Then days later, a complete reversal," said state Rep. Tom Rukavina, DFL-Virginia, in a telephone interview Sunday evening. ...

"I was stunned. This is so extraordinary. We were told the meeting with Essar went well (on Thursday) and then he gets back to Minnesota and immediately draws this line in the sand. I find it puzzling," said state Rep. Tom Anzelc, DFL-Balsam Township.

Anzelc said he had been out at some hunting shacks talking to some guys prior to next weekend's opening of the deer firearms season and had also been to an anniversary party.

"People are puzzled. But they're still upbeat. After all, we're Rangers," he said.

What on earth does that mean, "we're Rangers"? We're used to getting our way? We're used to getting easy money from the state?

So while the governor says "There are certain things in life that are more important than a steel mill," the Rangers think that trading with a company that deals with Iran is no big deal. All of a sudden, Rangers like globalization.

As to whether there should be a concern of a potential new corporation on the Iron Range and in Minnesota would have dealings with Iran, Anzelc said, "Sure it's a concern. But it's a concern that will always be there when you are engaging in a global economy with a very tense geo-political situation.

"We can't control all the countries of the world and all their actions. Essar is a company from India interested in building a steel mill using our iron ore because it's a steel company that has a market. Our traditional domestic steel interests don't have those interests available. That's why it's Essar," he said.

"Let's look at China. It's the largest communist country in the world with the third largest army. But we're sending them plenty of materials and they're sending back a lot of cheap goods that people buy ... not me. Look at Pakistan. Every T-shirt you see is made there and they're sheltering Osama (bin Laden, the architect of the 9-11 terrorist attacks that killed about 3,000 people in the United States). And we're worried about India building a refinery?" Rukavina said.

You know what? Give me a search warrant and fifteen minutes, and I bet I can find items from China and Pakistan in Rep. Rukavina's home.

But this isn't just trading any ol' thing. This is a refinery. One of the real possible places where the U.S. has leverage with Iran would be a military strike on the one refinery the country has. Iran would like very much to have another refinery to reduce that pressure; U.S. interests are clearly in keeping this from happening via peaceful means. Why the state of Minnesota should give money to that company that helps them build the plant is quite beyond my reasoning skills, but I'm no Ranger.

Labels: Iran, Minnesota, Pawlenty, politics

I'm sure 95% of my readers read PowerLine, but for the remainder, today's introduction of the anti-Keillor is a moment to cheer. To sum up the point we turn to Will Rogers: "I can remember way back when a Liberal was one who was generous with his own money.'' Here's hoping ol' Gary can toss a few Powdermilk Biscuits to the poor...

Also, in the voting for mayor of the MOB, the incummbet is resorting to scurrilous tactics, like using dog pictures to win votes. Not to be outdone...

...here is a fine creature preparing to listen to a scintillating lecture on computational general equilibrium models in economic development in Mongolia. She will be chief of staff in the Banaiaiaiaiaiaian Administration should you elect me.

Which you can do here once every day. Have both an office and home computer? You get to vote twice. Each. Day.

Labels: MOB

This article from National Review Online discusses the latest round of congressional ethics laws. While many of us would like to see more sunshine on the behavior of our politicians, we'd also like to believe that our news was free from bias.

This quote about the Washington Post from the above article says much:

The [ethical] waters are much murkier for the Washington Post, whose parent company shelled out $91,000 for an in-house lobbyist through the first six months of the year, according to the Senate Office of Public Records. (Not only did the Post lobbyist cover the Free Flow of Information Act, but he also lobbied on such varied issues as immigration reform, No Child Left Behind, and the District of Columbia Appropriations bill.)

Hmmmmm.

We know much of the MSM coverage is biased but for the nation's paper to hire a lobbyist on some of the biggest issues of our day, well....

Wouldn't it be of interest to you to have the Washington Post disclose, when they publish an article about, for example, immigration reform, what position they lobbied for and how much they spent?

Labels: Media

This story just cracked me up. And not just because the Iowa Department of Revenue wants to tax your pumpkin if you use it for a display, but not if you want to use it for food. No, it's for this first sentence.

The Department recently refined its position on whether pumpkins are subject to Iowa sales tax to more closely match what we believe to be their predominant use.

In the past, pumpkins were exempt from sales tax as a food (edible squash), even if they were to be later made into jack-o'-lanterns or used as decorations.

Our position now is that pumpkins are taxable if:

So what I want to know is how many people attended the meeting where "The Department recently refined its position..." How many, and at what cost? What could these people have been doing instead of cogitating on the burning question of pumpkin use?

The Tax Policy Blog provides more feedback here.

Labels: taxes

Our local state senator Tarryl Clark is not going to let go of this idea that we can spend our way to prosperity. There would be more jobs in Minnesota, she says, if only Governor Pawlenty would have let the legislature spend more money. Via Larry Schumacher (referring to a news column that I guess I didn't get, maybe Mrs. S figured it would be bad for my blood pressure?)

"In this year's legislative session, the Minnesota Senate passed a capital investment bill with broad bi-partisan support. The bill funded dozens of construction projects across the state including a new biomedical research facility at the U of M, new public safety training centers, and economic development projects around the state. However, the Governor vetoed this bill and by doing so he vetoed thousands of jobs. If he had instead signed the bill, Minnesotans would be working on these projects right now.

I think I should mail Sen. Clark a copy of Bastiat. It is easy to see the jobs created by the additional spending on these construction projects; that is what is seen. But she seems incapable of understanding the jobs lost due to the higher taxes to be paid now and in the future by businesses in return for these projects. That is what is unseen. Government consists of elected officials who necessarily have short time horizons and thus think they can borrow their way to prosperity. This doesn't work for homeowners, and it doesn't work for businesses, and it doesn't work for state governments. Just ask Michigan.

There are any number of reasons for the Minnesota unemployment rate to exceed that of the U.S. If you look at the annual figures, job loss in Minnesota is focused on the goods-producing sector, particularly manufacturing and construction. The service sector is moving at a fairly normal pace; health care services are strong. Given manufacturing is in a secular long-run trend downward around the country, how much of this do you want to lay at the feet of Pawlenty? And do you want to spend $200 million to try to get back 2,000 jobs in construction? How many jobs in the service sector might be lost to create those construction jobs?

Labels: economics, legislature, Minnesota, St. Cloud

I'd encourage you to read Larry Schumacher and Charlie Quimby on lack of transparency in Minnesota government. Charlie's correct to write:

Last session, the legislature passed, and Governor Pawlenty signed, the State Government Omnibus Bill, which contained a provision for a web-based contracts disclosure system. But no money was appropriated to create it.

This is just one example of the political struggle to reconcile public demands for more government accountability with pressure to control spending. One side says, here's a needed reform and the other side says, fine, but don't spend any money on it unless you cut something else.

The bill passes with bipartisan support and everyone is on record as being in favor of greater transparency, but there's no money or accountability for actually making anything happen.

This results in a patchwork of the good, the bad, and the unfunded.

I can tell you about how contracts work through our university system, but I can't show you who got paid for what, even though there's no problem with you coming to the library here and getting data on my salary. There's enough blame here to be bipartisan; we should ask our candidates next year if they intend to fund this program.

Labels: legislature, Minnesota, Pawlenty

Being an economist in a smaller place, and particularly one willing to speak on public policy, means you get lots of calls for commentary. One such call showed up Thursday night while I was driving back from watching the World Series: an 8am appearance on Hot Talk to talk about the school levy in the St. Cloud school district. I got all of about three minutes in, just enough time to say something I thought was relatively non-controversial -- increasing property taxes tends to push down house prices, which around here (and damn near anywhere else in America) don't need any more pushing.

I guess it was controversial to one of the other people on the show, school board president Jerry von Korff. I received Friday night an exhaustive email suggesting that I am incorrect on this basic point. So I spent a little time thinking before returning his email -- indeed, I get to be wrong every day here on Scholars -- and then sent the following back to him (personal notes edited out):

I think there are two points on which we have some disagreement. First, that property values include some prospective valuation of both tax and government service flows and, second, that the cost of 7% of 742's income would be catastrophic. While I think it would hurt, I don't think it's nearly so calamitous, except to the employment prospects of some teachers.

One of the points you did not make in the part of Barnett's show that I heard was that the property tax paid by 742 residents if the tax did not pass would fall, and not by a little bit. Had I had enough time, I would have read the data from your own FAQ. So a no vote is in essence a vote for property tax owners to receive a tax cut. People have a right to make that choice. The possibility of that choice means that the expected value of taxes to be paid on a house are lower right now than they will be if the levy passes. (That doesn't mean, by the way, that I think the levy will fail; in fact I'll be surprised if it does. But that would not invalidate this analysis.)

The value of that tax cut has an immediate benefit, in the form of lower taxes, and a second benefit in the form of lowering the PITI -- principal, interest, taxes and insurance -- on a house in the district. (Added here later, not in letter: The district has a tax calculator that says on a $150k valued house you would only pay a net increase of $1.50 a month, but what the top line really says that if the levy expires you get a tax cut, which I estimate to be about $9.80 a month. On net, then, the vote is costing you $11.30 a month.) That means that more buyers would qualify for a mortgage to buy that house, and certainly that means house prices could be sustained. Surely you are aware of this from your work with appraisers, and I apologize for boring you with things you already know, but this was the basis of my comment. I'd expect any economist to agree that if the number of people who can afford to be a house falls, demand declines leading to a drop in price, all other things equal.

Now to the second point, which you probably are thinking right now: The reduction in services in the district would be a negative for potential homeowners with children. Laying off teachers means increased class sizes, and you may wish to argue that this will lead to parents wanting to move to Sartell or SRR [Sauk Rapids-Rice] districts. This would make those houses even less desirable! you might claim.

Parents might believe this. But they would find that smaller class sizes really are not that helpful to student learning. The evidence from Project STAR in Tennessee done by economists like Eric Hanushek or Caroline Minter Hoxby are pretty clear that there are many better ways of spending money than by keeping class sizes at, say, 20 rather than 25. Hanushek has a meta-study that looks at evidence from a hundred or so separate pieces of research and there's just no evidence that 742's students would be helped by maintaining class sizes two students less than they would be if the levy went down. (Two is my very quick-and-dirty estimate from the MDE's statistics. If it's much more, you should show me why that's true.) In STAR, Hanushek found that a 10% reduction in classroom size cost about $850 a student but raised student achievement only 0.02 standard deviations. Surely you could find a better way to spend the money.

I have a great deal of sympathy for your point on the unfunded mandate of NCLB and if the district made accountability the key of its pitch, arguing that to do so it needed money for online testing, I might be willing to support something here. But if you can only argue that the loss is in classroom size and extra-curriculars, I have a hard time with the argument that these will offset the loss in demand for houses by pricing out the lower-income families who can't qualify the PITI for their mortgages. I have less sympathy for the outcry over the state's funding formula, but that's really not the point here. I'm indifferent whether the state charges me more taxes and transfers them to you or the school district issue a bond and ask me to pay for it. If anything was to tip the scale, it would be that the bond implies local control. Given your comment on NCLB, I'd think you'd be for that.

Many school districts and legislators use this comment on class sizes as the trump card -- you wouldn't want your child in a larger class, she'd get less attention that way. So here's the question: At what point is the class small enough? Go ahead, ask your teacher or your school board this question. If 20 is better than 25, is 15 better than 20? If so, then is 10 better than 15? Should we have one for every student? I mean, if money wasn't an object, at what point do the gains become so small that the district and its teachers would decide to do something else with the money?

And when they tell you they want to hold class sizes down, ask if they've got enough rooms for those kids. Are they planning to come back and ask for another building levy to house those extra -- but smaller! better! -- classes? Ask them as well, as Hanushek did to Congress nine years ago, whether they are aware that between 1950 and 1995, pupil-teacher ratios fell by 35% ... without much of any change in performance?

One also needs to talk to parents and get information out about the cost of reducing class sizes compared to the benefits. Many school officials believe the voters will react negatively to increasing class sizes by voting with their feet. They may be right. To the extent that you can reduce that reaction, you might help a school board move in the right direction.

I have had a fairly long exchange with von Korff since writing this, and without either of us conceding much he and I have found a way to talk about teacher productivity. It's what we really want to know: How can we make teaching and teachers more effective? There's no doubt that much of what happens in the classroom is outside the teacher's control, and that a simple look at test scores without including environmental factors matters. We won't necessarily agree on what the right set of environmental factors are, and maybe we never will. But what also matters -- and on this I think we have some agreement -- is that teachers need to be incentivized to use the best methods. In his view, that requires smaller classes. In mine, that's a huge opportunity to discuss whether we could find a better delivery method that might mean larger classes. If the focus is on output rather than input, on production rather than class size, therein lies the possibility of real changes that matter.

In short, what's the optimal student-teacher ratio? The economic research I mentioned above suggests there's a very flat range of achievement scores for classes between about fifteen and thirty students. Where's your school? Again, I beg you to look up your own district's data. It's not hard to find, and it's not hard to understand.

Labels: education, St. Cloud

I am working in my Jason Varitek road jersey today. (If you don't know, he's that guy with the finger in the air. He wears the 'C' on his jersey.) Tired, but almost as happy as these guys.

Here's something a little weird. I am watching the game last night. We are ahead 4-1 in the bottom of the eighth, and our best middle relief pitcher, who's a little gassed from his workload the last three games, is on the mound. A single, an out, and a Garrett Atkins home run later, and it's 4-3. In the years past -- say, any time between 1918 and 2004, for instance -- my reaction would be "we're dead. We're so dead. We are Tom Tancredo Campaign dead. How do we die this time?" And you'd sit and watch with that Eyes of the Dead look like that guy with the word "Risk" tattooed on his fingers in that commercial.

This time? I say to Littlest, "hey, it's 4-3 and Paps is coming in the game. Pitched a lot this series, but he's a horse. I like our chances."

That's when I realize the curse is dead and gone forever. We could have even lost that game last night and it would still be dead. So Mitch is right; give the 86 years a rest, send it to the same history books where we discuss the Hundred Years War. Now it's our turn, and even if some gloryhounds can't even wait for the end of the series:

...we don't have to say Bambino or Yankees suck any more.

We are Red Sox Nation. Our team is World Champions for the second time in four years. We belong here.

Don't like it? Come beat us.

Labels: Red Sox, sports

In case you hadn't heard, I am running for Mayor of the Minnesota Organization of Blogs. My only campaign promise is free vowels for everyone. The polls are now open, and your support is appreciated.

Labels: MOB

Most people who have any connection with education institutions are aware that grade inflation is a topic of discussion. Resolving the issue is not. After getting inflated grades in high school and earlier, students enter universities believing they are very bright and entitled to high grades there, too. The author of this article in The Economist attributes inflated grades at the college level to a reaction to time pressures on professors and teaching assistants. Since the students all think they are very bright (and some are) they question any grade not an "A." As the author implies, it is just easier to give a high grade than spend the time and hassle defending a legitimate lower grade. However, there is far more to the problem than avoiding hassles.

Who loses?
First, the student loses because he/she believes that a high grade means they have learned something. Not necessarily so - too often grades are "given" vs "earned." The student has a poor sense of how much talent and effort it takes to be an "A" student, one that performs significantly above average. He hits the non-academic world and cannot understand why he is not rated the best employee since the 1800's.

The parents lose because they have been given an over-valued assessment of their Johnny or Susie. They believe their kid is able to take on anything because their grades are really high. Then Johnny or Susie returns home because they cannot compete in or cope with the real world. Parents also lose because they are paying taxes to support a system that in many instances does not teach what students need to succeed. Our system today has few repercussions for poor performance or bad behavior. The real world does not have "do-overs" on exams.

Employers lose because they think they are hiring someone with certain knowledge, responsibility and decent work ethics. Instead they get new employees who are often lazy, incompetent, and lacking in the ability to work well with others, yet have an over-inflated perception of themselves.

Our nation loses because these students have not been taught to think critically, do not know basic facts on which to base arguments, and have low personal standards for such basic habits as consistently showing up for work on time. Students from other nations often know more and work harder than US educated students.

We are in a global economy whether we like it or not. The attitude towards academics on most of the planet is to learn everything one can. This means learning the basic foundations of math, science, and real history (not just the guilt-driven issues of the West). My foreign students from Asia, Africa, Eastern Europe and South America have drive and reasonable expectations. Our last 40 years of coddling US students, making excuses for aberrant behavior and grade inflation have resulted in far too many "graduates" knowing less, expecting more, and running home to mom and dad when things do not work.

As always, there are exceptions but my contacts in industry are very, very concerned about the quality of college graduates today. Since this post is getting long, I will document suggestions separately.

Labels: Freedom, higher education

Tonight was the premier opening of the documentary film, Indoctrinate U brought to the Twin CIties by the Minnesota Association of Scholars. Producer, Thor Halvorssen and Director, Evan Maloney joined 65 supporters for a dinner at McNamara Alumni Center at the University of Minnesota. We learned the background of the movie, what it took to get it to its current state, and future plans.

Minneapolis-St. Paul is the first location to offer multiple showings of the film. You can see it at the Oak Street Cinema near the U of MN campus. Times are as follows:
Saturday/Sunday 7:15, with a 5:15 Matinee each day;
Monday through Thursday 7:15 and 9:15, with 5:15 Matinees Tuesday & Wednesday

If you are a college student, a parent with college students, a future college student, this movie is a must see. What has happened since the 1960's on our campuses is a disgrace, a waste of taxpayer money, but most importantly, a defeat for the open exchange of ideas. Our nation has thrived on the exchange of ideas, different opinions, and the right to express them. Forcing students to adhere to a one-sided philosophy is bad for all.

Labels: education, Freedom

Controlling P-R-I-C-E.

Seeking to tame galloping food prices ahead of parliamentary elections in early December, the Russian government on Wednesday signed an agreement with major food producers instituting temporary price controls on basic products.

A tersely worded statement posted on the Web site of the Agriculture Ministry said the producers had signed the agreement “at their own initiative.”

“Producers and retail organizations, understanding the social responsibility of business in the balanced and stable development of the consumer market in Russia, will take necessary measures over the course of the agreement to ensure that the most vulnerable strata of the population can purchase products at acceptably stable prices,” the statement read.

Prices for products like cheese and vegetable oil have jumped and even doubled in some regions in the past two months.

Here's the Nixon period from Commanding Heights. Arthur Burns at the Fed raised the money supply 13% in that period in advance of Nixon's re-election. M2 in Russia at this time is up almost 28%.

A deep recession followed the relaxation of price controls in the US in 1974-75. Those investing in Russia are hereby warned.

(h/t: Greg Mankiw.)

Labels: economics, inflation, money

Via Best of the Web, the story of students who are walking with empty holsters on campus to protest the prohibition on guns on campus.

"People who would otherwise be able to defend themselves are left defenseless when on campus," said Ethan Bratt, a graduate student wearing an empty holster this week on the campus of Seattle Pacific University.

Students for Concealed Carry on Campus, a group of college students, parents and citizens who organized after the deadly shootings at Virginia Tech University in April, launched the protest.

...Campuses are prime targets for people intent on harming others because laws prohibit concealed weapons there, Bratt said.

But others believe college is no place for firearms.

"You don't like the fact that you can't have a gun on your college campus? Drop out of school," said Peter Hamm, a spokesman for the Brady Center to Prevent Gun Violence.

I would like to think the market will take care of this; schools willing to treat their students with respect regarding their right to carry a weapon can appeal to those who wish to do so. But campuses have long been hostile to the idea -- particularly the faculty, as I found out some years ago.

As Peter Hamm's response indicates, it doesn't occur to the gun-restricter that he's even violating rights. We've seen that up here, according to Wendy Kaminer.

Want to see other students whose rights are simply assumed not to exist? Come see Indoctrinate U, opening tonight.

Labels: higher education

One thing you try to teach students is how to put numbers in context. Based on the idea that "figures don't lie, but liars sure can figure," part of educating citizens in a democracy, and of critical thinking, is to ask questions about numbers presented by political candidates and media.

Some simple rules I teach:

1. The Carl Sagan rule. For older readers, what's the one phrase you remember from him on the Tonight Show with Johnny Carson? "Millions and millions" of planets/stars/galaxies... The idea was to imply "a lot, a real lot, bigger than you can imagine." The use of large numbers is usually meant to impress or scare you. So for example, remember yesterday when I mentioned that the subprime mortgage crisis would cost $14 million in local property tax revenue in Minnesota? You should ask "out of how much total is that?" The answer is that total property tax revenue collected in the state is almost $7 billion, so that the hit is around one fourth of one percent. (That is .0025% (thanks for the correction, Dale and Peter!) for those of you scoring at home.) Doing things in terms of shares (like spending or taxes) is a help in putting things in the right context.
2. The "keeping it real" rule. You might think this is a simple matter of deflating everything by CPI, but that is a bit difficult. What's the real cost of a personal computer now versus one five years ago? That question is almost nonsense, because the computer on my desk five years ago does nowhere near what mine does now. One of the things I really like to do with this is to show students some of the annual reports of the Dallas Fed, written by Michael Cox and Richard Alm, which attempt to put the cost of things in something that really is constant, like human effort. Or by understanding that productivity at work isn't just measured by output per unit of input, but includes the quality of time at work and at home. The point is that to really keep it real, you need a real numeraire that people can hang on to, not just some "absence of money" definition. Keynes wrote the General Theory using the wage rate as his numeraire. Austrian economists have a point in referring to the use of a numeraire as "misleading". I don't eschew one, but it should be used with care.
3. The adjective rule. Pay very close attention to the adjective used in defining the term to be measured. Take yesterday's editorial in Investor's Business Daily about President Bush's spending. Spot the adjective:

   Bush is "arguably an even bigger spender than LBJ," says a story from McClatchy Newspapers on the president's fiscal record. Pretty tough words, given that LBJ conducted both a war in Vietnam and a War on Poverty simultaneously, racking up huge gains in spending over his term and a half in office.
   
   The McClatchy piece says discretionary spending under Bush has risen an inflation-adjusted 5.3% in his first six years, outstripping the 4.6% under Johnson — and way above President Reagan's meager 1.9%. By "almost any yardstick," the article continues, Bush "generally exceeds the spending of his predecessors."
   
   "Any yardstick," that is, except the most important of all — spending as a share of GDP. On this, Bush is actually lower than most of his predecessors.

   What do we mean by "discretionary spending"? The definition used by the federal government (via C-SPAN) is the spending which is annually appropriated by Congress and signed into law. Entitlement programs are out as are any other mandatory spending; combined that's about half the federal budget. But discretionary spending includes all defense spending (including supplemental spending for the war on terror.) It also includes the money spent on cleanup for Katrina, which puts a different spin on the word "discretionary". So which do you want to look at? Nondefense discretionary? Nondefense, non-disaster relief discretionary? And if that's the yardstick, why wouldn't policymakers simply choose to move more and more spending into mandatory programs so that they escape such scrutiny?

Now there's no way around Bush as someone who has spent a great deal of money and been at best a 'C' student as an economic policymaker. But looking at this chart from Heritage indicates to me that the rise in nondefense discretionary spending isn't a recent phenomenon. One can be rightly disappointed that nothing's been done to stop the rise. But when people want to talk about spending, be sure you keep it real, and keep the context in mind.

Labels: economics

The new tactic of campus officials in suppressing free speech seems to be the declaration that the annoying speaker is a threat to the campus and needs mental screening and evaluation. The latest example happens at Valdosta (GA) State, where T. Hayden Barnes, a student with strong environmental views, had the temerity to criticize an administrative decision to build new parking garages.

On April 13, Barnes posted a collage of pictures on his Facebook.com page, including pictures of [VSU President Ronald M.] Zaccari, a parking deck, a bulldozer excavating trees, a flattened globe marked by a tire tread, automobile exhaust, a gas mask, an asthma inhaler, a public bus underneath the “not allowed” symbol, United States currency, and a photocopy of the Climate Change Statement of the American College & University Presidents’ Climate Commitment. The collage was also marked with a variety of captions, including “No Blood for Oil,” “More Smog,” “Bus system that might have been,” “Climate change statement from President Zaccari,” and “S.A.V.E.—Zaccari Memorial Parking Garage,” a sarcastic reference to concerns he says Zaccari had expressed in a meeting about his “legacy” as president of VSU.

Barnes also penned a letter to the editor of the VSU student paper about the proposed parking deck plans on April 19 and wrote to Zaccari on April 26 to ask for an exemption from the mandatory student fee designated for funding the parking garage construction.

According to VSU, Barnes also “posted a link on his website page to an article discussing the massacre at Virginia Tech”; linked to an advertisement for a film competition sponsored by commercial photography site Webshots.com, which featured the tagline “Shoot it. Upload it. Get famous. Project Spotlight is looking for the next big thing. Are you it?”; and commented on his website that he was “cleaning out and rearranging his room and thus, his mind, or so he hopes.”

On May 7, Barnes found a notice of administrative withdrawal from Zaccari underneath his dormitory door. The notice informed Barnes that “as a result of recent activities directed towards me by you, included [sic] but not limited to the attached threatening document [the Facebook collage], you are considered to present a clear and present danger to this campus.”

FIRE has stored the Facebook page which looks pretty innocuous. I'm going to guess that Barnes committed the same 'crime' as Troy Scheffler did -- he mentioned Virginia Tech without denouncing guns. Unlike Scheffler, Barnes actually went ahead and got his required psychiatric evaluation and submitted it to the university, which is now dragging its feet on reinstating the student to campus. All about a parking garage.

Pres. Zaccari deserves some scorn for his poor handling of this situation. But I want to call attention to this increased use of psychiatric screening as a retaliation for speech administrators don't like. Here's a case from Regent University, a private school that expelled a student for posting an obscene picture of the school's president. These three cases within the last six months point up a disturbing new trend. All the more reason for you to join us for Indoctrinate U this weekend at the Oak Street Cinema in Minneapolis!

Labels: Freedom, higher education

After waiting a couple of days, all I can say is "How sad, how very sad." Michael Murphy, a Navy Seal, lost is life in Afghanistan after his group got ambushed. He exposed his position when calling for help; sustained a number of wounds but relayed his group's position to headquarters. Before any could be rescued, Michael died along with other Seals that day, a low for Seals, but also a riveting memory told very well by Marcus Lattrell in his book, "Lone Surviver."

We still read and hear of heroes - unfortunately, not on the so-called news channels. Their anti-military bias has tarnished their views to the point where a fact challenged would-be reporter gets more attention than a true hero, one who really deserves honor and respect from the American public.

On October 22, President Bush presented the Medal of Honor to Michael's parents. We are indeed fortunate that we still have young men and women who understand honor, country, valor, truth, and freedom - without the soldier, our freedoms are gone.

Thank you Mr. and Mrs. Murphy for raising such a fine young man. We are indebted to you and his memory as well as others who have made the ultimate sacrifice for our freedom.

Labels: Freedom, US Soldiers

I realize that to some readers details of monetary policy are arcana. If you feel that way, go to the next topic; I'm going to work through this morning's report on the Federal Reserve's increased transparency proposal.

The discussion about Ben Bernanke since the minute after he was nominated to chair the Fed was whether and when the Fed would switch to an inflation targeting strategy for monetary policy. Today's report says the Fed is deferring that debate to a later time, and some might take from this that the inflation targeting is not in the cards. I read this report to say just the opposite.

The centerpiece of their new communications steps would be the release of economic forecasts of policy makers four times a year, instead of the current two times, with additional detail and background, according to people familiar with the matter. Moreover, the horizon for those forecasts would be extended to three years from two.

The new initiatives have been in the works all year. Earlier this year, the Fed had hoped to finalize them by this month. But the fallout of the market turmoil that erupted in August has complicated the agenda of next week's meeting of the policy-making Federal Open Market Committee and it may defer decisions on its communications policy to a later meeting.

Inflation targeting is really inflation forecast targeting. The central bank issues a report on what it thinks inflation will be over some time horizon. It then establishes a target inflation rate. The two put together inform one what the path of monetary policy would be. But they pretty much have to come in that order: A target without a forecast is a useless signal; a forecast tells you something even if you do not have a specific target in mind. I can think inflation should be higher or lower than the forecast without saying how much, though how much is something we would want to know.

Bernanke has been using forecasts more, elevating them in policy discussions. To have those now made public and more frequent is an important first step necessary for inflation targeting. It's not sufficient, though.

So what has to be discussed? This gets to the very heart of the Federal Reserve Act of 1913, the law that created and controls the behavior of the Fed. The Federal Reserve has a dual mandate to both maintain price stability and provide for high employment. Frederic Mishkin, in an interview just published by the Minneapolis Federal Reserve, discusses this compared to the European Central Bank, which has a mandate for price stability first. He says

The Congress has given us a dual mandate; that is, the Federal Reserve seeks to promote the two equal objectives of maximum employment and price stability, so that's what we have to execute. Even if the Congress hadn't given us such a mandate, the basic structure of the dual mandate is what I would feel is appropriate, and so we should be aiming to pursue such an objective anyway.

A hierarchical mandate says that first we focus on price stability and if we're successful then we'll focus on other concerns, particularly output fluctuations. If you interpret a hierarchical mandate as focusing on price stability in the long run, making sure that long-run inflation expectations are grounded—and we've seen tremendous success not just in the United States but in Europe in terms of grounding inflation expectations—then the dual mandate and the hierarchical mandate are identical.

Some people have said to me that the dual mandate versus hierarchical mandate dichotomy is a red herring. I don't agree, because I think it is an important issue in communications strategy. It's important to make it clear that you care about output fluctuations, but you're going to look at this from a long-run context and never take your eye off the inflation ball. That's the right way to do the dual mandate.

Similarly, with the hierarchical mandate, you should not be an “inflation-nutter,” as Bank of England Governor Mervyn King has expressed it. That is, you shouldn't be focused solely on inflation control. You must also worry about the fact that if you act too quickly to get inflation down to your long-run objective, you might have excessive, unnecessary fluctuations in output. So I think modern monetary theory, in writing down a hierarchical mandate or a dual mandate, will write exactly the same loss function, exactly the same kind of optimization theory for a central bank.

My suspicion is that this statement by Mishkin reflects Bernanke's view as well. (It's very unlikely that in a Fed publication a governor is going to say anything contrary to the view of the Board.) So the Fed may think it can accomplish the inflation target within the context of the dual mandate. But it has a second issue -- does it have complete goal independence to make this statement on its own, or will it need Congress to give some support? I turn to the means by which the Bank of Canada adopted inflation targeting, in which the Bank and the government made a joint statement in 1991. In both cases, the legislature can stop a proposal to create inflation targeting; in the Canadian case, the Bank was able to convince the government of its plan. (I'll point to this paper by Michael King for Canadian central banking history.)

It is interesting then that the Fed continues to refer to these changes as part of its communications strategy. Communicate with whom? I suspect communication is much towards Congress as it is with Wall Street. It needs at least tacit approval from both, in my view, to put inflation targeting on the front burner, and it may need legislation -- something to which both Congress and Wall Street will be loath. It should make for an interesting few years with Bernanke's Fed.

Labels: economics, Federal Reserve, money

The Joint Economic Committee's Democratic membership has released a report on the impact of the subprime mortgage crisis on property values and property tax revenues. This morning's press release includes this statement from our own Sen. Klobuchar.

“In the world of subprime lending, the chickens have come home to roost,” said Klobuchar. “If we are to contain the economic spillover effect of the subprime lending disaster, we must act now.”

They claim over $100 billion in lost home value and, not to be ignored, almost a billion dollars in property tax revenue.

Yet while claiming they are using conservative estimates, the report itself contains this paragraph on page 12:

The effects of larger price declines could considerably increase the magnitude of these damages. For example, Moody’s forecasts that, in the aggregate, housing prices will decline by about 6.9 percent between Q3 2007 and Q2 2009 and rise mildly thereafter. If we instead assume that the aggregate price decline is 20 percent over that period, the total number of foreclosures for the period 2007 to 2009 would be nearly 2 million and the loss of property values would total about $106 billion.

That is indeed what they go for, and as a result for Minnesota's estimated 121,000 subprime mortgages, 28,000 will end up in foreclosure, and the repricing of those homes and the homes near them will lead to a $14 million loss in local property tax revenue.

Of course federal government officials have been peddling solutions like it was soda pop. Klobuchar and other Democrats on the JEC have been pushing for increasing the repurchase of mortgages by Fannie Mae and Freddie Mac, changing bankruptcy laws and attacking "predatory lending practices". Norm Coleman has proposed allowing borrowers to tap tax-free accounts without penalty to refinance. But if you think prices are going to drop 20% as the JEC report projects -- and given the sales of existing homes, I wouldn't say that is an impossible outcome -- it's not clear any of these are good solutions -- the Democrat plan puts the taxpayers on the hook, while the Coleman plan has the borrower bear the cost and sacrifice some of his or her retirement funds to help let the banks off the hook.

So here's your quiz: How much in local (county, municipal, school) property tax is paid in Minnesota? I'll put the answer in comments after you put your guesses there. Or you can Google it if you like. Then ask yourself -- how horrible would a $14 million hit be? And how likely will it be that local officials will cry panic over the number at any rate and rail louder than ever for property tax relief from the state next spring?

Labels: economics, housing, taxes

In economics, you look often for natural experiments to test a hypothesis. In Florida, schools are graded and vouchers are given to students in schools who "fail" the test twice. Thus one failure doesn't invoke a penalty but increases incentives to improve performance.

Rajashri Chakrabarti writes about these incentives. (h/t: WSJ Real Time Economics). Because the Florida program only requires a school to get to minimum standards in one area of the three 'R's, Chakrabarti tests whether the schools focused on one subject over the other two. They do: the focus is on writing rather than reading and arithmetic "because it was easiest to improve in."

Case studies reported in Goldhaber and Hannaway (2004) are very much consistent with this picture: ‘Writing came first “because this is the easiest to pass”...“With writing there’s a script; it’s pretty much first we did this, then we did this, and finally we did that, and using that simple sequencing in your writing you would get a passing grade.”’

Telephone interviews conducted by me with school administrators in several F schools in different Florida districts also show a similar picture. They reveal widespread beliefs among school administrators that writing scores were much easier to improve in than reading and math scores. They say that they focused on writing in various ways after the program. They established a “team approach in writing” which introduced writing across the curriculum. This approach incorporated writing components in other subject areas also such as history, geography, etc. to increase the students’ practice in writing. They also introduced school wide projects in writing, longer time blocks in writing, and writing components in lower grades.

That is an interesting result, reasons for which I do not really know but can speculate. If you are grading writing, it has to be by a template -- "three points for this; five for that"; the template is something teachers will know. As a result, they can teach to the template. That and repetition, it appears, did the trick. Is this learning? To some extent yes, but it would be useful to know if there were cross-effects to other student subject areas. It doesn't appear to be so, but the results are not clear on that question.

The study also finds that schools focused on the low-performing students, but that the higher-performing students did not suffer a decrease in scores as a result. If anything, the higher-performing student results went up with the lower-performing students, just not as much.

The important point is that the threat of vouchers appears to motivate some behavioral change in teaching strategies that improve learning. It is another example of why the voucher program is worth further investigation and study, and supports the claims of its advocates.

Labels: education

A few months ago Private Scott Thomas Beauchamp submitted articles describing supposed ugly behavior of American soldiers to the left-leaning New Republic Magazine (TNR). The descriptions reported were absurd to anyone who has a clue about the caliber of our military. Of course, the left is not interested in supporting our military but will eagerly publish anything that is critical, but check facts? Nah. Writers in the blogosphere took one look at the articles and immediately, red flags appeared.

Further research indicated that TNR had done minimal fact checking and ignored the full disclosure practice of identifying relationships with staff. Turns out at the time of Mr. Beauchamp's written submissions, his wife worked at The New Republic.

Over the past 10 weeks, TNR editors have refused to admit their errors, have pulled the articles, and entered the "hide in the cave" zone. Appears they want people to forget their lack of editorial responsibility. TNR accused the Army of stonewalling - yet it's TNR who has been stonewalling the truth. Our Army did its investigation and concluded the stories were false.

Yesterday, Drudge got copies of the Army's investigation and conversations between the TNR edictors and Mr. Beauchamp who now wants the whole thing to go away - I wonder why??? The Drudge documents are now gone but can be accessed through Michelle Malkin's website.

Mr. Beauchamp is the product of an education system that tells everyone they're special without providing grounding in honesty, integrity, and personal responsibility. Because Beauchamp had access to a left-leaning, anti-Bush and anti-US military magazine, by his own admission, he submitted articles based on fantasy and gross extrapolation of facts (one article appears to be an based on the actions of German soldiers in Afghanistan a couple of years ago). He dreamed about being another Hemingway.

When we teach children that everything and anything goes, and they are not accountable for what they say and do, they develop a very warped idea of life and will have major difficulties living on their own. Mr. Beauchamp got caught. Hopefully he'll learn from this experience. On the other hand, TNR does not appear to have learned anything from this experience. A once decent left of center magazine has shown its inability to deal with facts that do not support thier bias, again.

Labels: education, Freedom, soldiers

I was reading Phil Miller's excellent essay on McMansions in Edina and saw that he used the "bundle of rights" approach pioneered by Armen Alchian. Here's an essay by Anthony de Jasay on that point. de Jasay makes a useful point on the nature of rights versus freedoms.

A freedom is a relation between one person and a set of acts. The person is presumed to be free to perform any act in the set that does not breach the rules against torts (offences against person and property) and (a less stringent requirement) the rules of civility. A substantial obstruction of freedom (e.g., gagging or threatening to hit a person to stop him from speaking freely) is a tort or an incivility. As such, it is wrong. To say that a person has a "right to a freedom" is tantamount to saying that he has a right not to be wronged—a redundant and silly proposition. It also implies that he would not have this freedom if he had not somehow obtained a right to it—an implication that is at the source of much false theorizing. You do not need a right to move if your moves stay within the rules—this indeed is what it means to have rules.

In contrast to a freedom, a right is a relation between two persons, the right-holder and the obligor, and an act the obligor must perform at the rightholder's bidding. A right may be created by contract in which the obligor, in exchange for a consideration, surrenders his freedom to perform (or forbear from performing) some set of acts as he pleases, and agrees to perform (or forbear from performing) it as required by the rightholder. Here, both parties enter voluntarily into the right/obligation relation. However, a right may also be created by some authority, such as the government acting on behalf of "society", conferring it upon rightholders and imposing the corresponding obligation on obligors of its own choosing.

There is no right that I see for the homeowner to build, as the building contract is between the owner and the construction company, and to a lesser extent between the owner and the zoning authority. Whether or not someone is free to build a McMansion is, however, a matter where civility does play a role. Suppose St. Cloud did not have a noise ordinance, and you were to play Iron Maiden very, very loud at 3am. You may claim you have a right to do so because the government has not enjoined you from it, and courts might declare your behavior not to be a nuisance (I hear you could get a good ruling about Iron Maiden from Justice Foot) but you do not have the freedom to do so without consequences. It is, among the non-Iron Maiden-loving crowd, uncivil.

I agree with Phil that it's troubling that positional goods are a call for government action which turns the question of freedom into a set of rights (as de Jasay's last sentence discusses.) P.J. O'Rourke's idea of the rules of governance as "keep your hands to yourself, and mind your own business" appeal to me, but a government by the people means the people have to accept those rules first. In the town of Edina, it appears they do not.

Labels: economics, libertarianism, Minneapolis, Minnesota, St. Cloud

I think it's been a while since I feasted at the Coleman Cornucopia of Crapola. So hitting a hanging slider from Nicholas should be permitted.

He's having a cow over the purchase and registration of cars for the I-35W bridge reconstruction from Colorado.

Tuesday, I saw 15 trucks parked by the bridge site -- 12 Ford F-150 Supercab 4-by-4's with Triton V-8 engines, two Ford Explorers and one Ford Escape -- so new that many still have instruction tags hanging from their ignitions and control panels, and they have temporary state registration cards taped in their rear windows.

But those registrations are not from Minnesota, where Flatiron -- costing far more than local bidders, and taking longer to complete the project -- is scheduled to begin work next week. Flatiron's Fords are registered in Colorado; they were purchased in Littleton, a Denver suburb.

A Flatiron spokesperson did not respond to requests for comment, but permit me to sum up the situation here: Buying Colorado trucks for a high-profile project in Minnesota that still carries the emotional pangs of death and destruction? Dumb, Flatiron.

As Mark Perry points out, these are not Colorado "imports".

Ford F-150 pickup trucks are built in Kansas City, Norfolk, Detroit and Louisville, and would have therefore been "imported" from Missouri, Virginia, Michigan or Kentucky to Colorado, before being "imported" to Minnesota from Colorado.

As would be the trucks sold by John Wiese Ford in Sauk Centre, whose owner whines to Coleman about losing the sale. Perhaps Mr. Wiese could explain why, on a state contract, it would be acceptable to pay an additional 2.8% tax on the Minnesota-bought vehicles rather than those in Littleton, Colorado. That cost would have been projected into the contract Flatiron signed with the state and its taxpayers.

This is a company that was judged to have better public "outreach" than the local firms that lost out on the project, despite submitting lower bids. Would a Minnesota company buy a shiny new fleet for the project from, say, Colorado?

To save $39,200 on the expenses for this project? We may be dumb here, but we're not stupid. It would be an easy thing to fix -- just announce that contractors buying materials to fulfill a state contract get the goods tax-free if bought in Minnesota (which would push bids down; JOBZ has such a provision.) And Coleman also wanted to pick up the Hennepin county tax on this purchase, a cool $2100 towards building the Twins stadium (using his figure of $1.4 million for the trucks Flatiron wants to purchase, not the even million Coleman uses to keep his math simple. My students are quite capable of .0015*$1.4 million.)

What was actually lost to Minnesota was merely the $48,475 to the state coffers from the state sales tax, plus the profit margin that John Wiese or some other dealer would have made on the trucks, which if Flatiron is as skilled at buying as it is at bidding isn't more than $1000/truck. A far cry from $750,000, not likely a tenth of that.

Even with a generous fleet discount, we are talking a million dollars. While that may be a drop in the bucket on a $234 million project, a million bucks means $65,000 in lost sales taxes, which could have helped MnDOT add, who knows? Maybe a bridge inspector!

This is sheer demagoguery, of the same type as Don Boudreaux points out in Barbara Boxer's complaint that the war in Iraq makes fighting California's wildfires worse. Losing sales tax revenue makes lots of things more difficult to buy. You can say the same about resources consumed to fund the DREAM Act or bike trails. But of course you won't, because that's not your hobby horse.

Yes, but it's a MnDOT project. About the only surprising thing to me is these new trucks aren't on fire.

What the hell is it with Coleman and fire, anyway?

Labels: economics, Minnesota, StarTribune

Lew Rockwell thinks he's found an economist who succumbs to the broken window fallacy. But look what the economist says:

"In the odd nature of economic accounting, this will probably be a stimulus. ... There will be a huge amount of rebuilding in the next couple of years, financed by insurance payments."

The emphasis is mine. If you inserted the word "regional" in front of "economic accounting", it would be clearer. Much of the money that covers the insurance claims comes from outside the region. The premiums of all homeowners who buy fire insurance rise; they are the ones who buy less of other things to pay for the insurance (or go without.) Now certainly some construction workers are going to move into San Diego to take up those jobs, but it's not entirely clear that the economist is wrong from an economic accounting point of view, and no reason to excoriate the economist as if he did not know the broken window fallacy.

UPDATE: James Hamilton at UCSD checks in that he's fine, and then tells us about the fires.

Labels: economics

The cover story of this week's Business Week is titled Little Green Lies, about the on-the-job education of one Auden Schendler. After a few years of trying to get his company to make investments directly in reducing energy consumption, he was finally able to get them to make a commitment to purchase renewable wind energy credits. (They tout this on their environment page.) This gave the company a leadership position but Schendler a queasy feeling, because it wasn't really changing energy consumption, just buying a green plaque.

Any student of economics could have told you this would be true once they read the economics of these credits as described in the article.

Credits purchased at $2 a megawatt hour, the price Aspen Skiing and many other corporations pay, logically can't have much effect. Wind developers receive about $51 per megawatt hour for the electricity they sell to utilities. They get another $20 in federal tax breaks, and the equivalent of up to $20 more in accelerated depreciation of their capital equipment. Even many w