Friday, November 30, 2007

Budget update -- about what you'd expect 

The new revenue forecast is out, and the news is not too bad.
A weaker U.S. economic forecast has changed the state�s budget outlook. General fund revenues now are forecast to fall $739 million (2.2 percent) below end-of session estimates, while spending is projected to be $66 million (0.2 percent) higher. A budget deficit of $373 million is now projected for the biennium. Previously a balance of $294 million had been expected.
The forecast notes strong second and third quarter growth but, relying on a forecast for the U.S. economy for 2.2% GDP growth in 2008 and 2.3% in 2009. The revenue reductions come mostly in corporate income tax and sales tax revenues. As we've noted, the decline in corporate profits is already ongoing.

There are two points worth noting. First, the budget reserve is $653 million and the cash flow account has another $350 million. (There's a small pot of money for Human Services funding untapped, too.) So one could easily carry on spending at projected levels without any increase in taxes. So news reports that "this might be "the tip of the iceberg" or that tapping the reserves might hurt our credit rating are pretty thin gruel. It's probably also not the time to make major spending cuts; I don't see those as necessary on macroeconomic grounds. (I would favor them on efficiency grounds, but that's a different story.)

The reason takes me to the second point. The use of Global Insights as the forecast driver (meaning their national numbers are being used to project state revenues) puts us on the low end of the economic forecasts out there. In the November WSJ Economic Forecasting Survey, GII's Nahraman Behvaresh put in a forecast of 0.7% for first quarter 2008 vs. 1.9% average for the survey, 1.6% vs. 2.4% for Q2. Following up on something I wrote yesterday, if you set those growth rates low, they have substantive impact on growth for the rest of the biennium, as they push down revenue generation for 3/4 of the period, not just those two quarters. (GII isn't far off the average survey for the rest of the survey.) Now it may be that Global Insights and, by extension, the Finance Department are right on this forecast. I'm already on record making the probability of recession up here in the local area around 40%. GII is not forecasting a recession as its baseline, but has an alternative blended model with a weight of 35% on a national recession scenario. Most economists in the recent NABE Outlook do not foresee a recession. Today's weak consumer spending report has made some revise their estimates downward, though.

Revenue forecasts tend to be pessimistic, because the costs of errors are asymmetric -- nobody minds finding extra money under the stocking five months before the end of the biennium, but a shortfall causes pain. Not to suggest that Finance is writing something gloomy (even if people do think Tom Stinson is sobering and careful), but it's a very brave forecaster who would have bucked Global's negative outlook ... and I'm not one of them either. Still, it will be hard to imagine the story getting much worse than this forecast unless there's some additional shock to the system. The biggest risk would be oil prices staying higher than $80 a barrel through next year.

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OPM compassion 

Read this.

Then this.

'Nuff said.

Thursday, November 29, 2007

What I saw at the debate 

There's already comments on last night's debate from Mitch (who sat next to me at the Patriot Primary), Michael (two seats down), Ed, and others. I'm puzzled by Scott's conclusion that Romney won. I thought he came off far too combative; the "I was wrong" on abortion line was buried in a lot of non-answering of questions. And too much attack: Even when he was right, such as tagging Mike Huckabee on signing Arkansas' DREAM Act, Romney comes off as meanspirited.

I also utterly disagree with Ed on the quality of CNN's questions (even discounting to zero the planted general.) A commenter at Powerline got this exactly right:
CNN chose the questions so once again we get the liberal's perspective of conservatism.

"What would Jesus do?"
"Do you believe this book"
Lock and loaded gun prop question.
Confederate Flag.

And of course...Should women go to jail if they have an abortion.

Not a single question on trade. Not a single question on education. Shoving the Iraq questions until late in the program. It was highly manipulative towards CNN's ends, and not for the betterment of the Republican watching this program to decide who they should support in the primary.

Last thing I learned -- Rusty Humphries is more than a Louie Anderson look-alike. Michael and I greatly enjoyed dinner with him and Patriot station manager John Hunt before the debate, and that fellow's knowledge of the Middle East was impressive. I'll have to start listening.


It depends 

It's one of these half-full/half-empty stories. The national economic news is considered delightful, as GDP growth in the third quarter was revised up (as expected) to 4.9% from an advanced estimate of 3.9%. Yay! In the same report we find corporate profits fell. Boo! Home sales went up. Yay! Prices went down. Boo! Forecasted growth for 2007 is up. Yay! The forecast for 2008 is down. Boo! Foreclosures are up 94% in the last year, but they've leveled off. Booyay?!? Yayboo?!?

What's a poor economist to do?

Pay attention to the revisions, and the effects of one-time shocks. This third quarter figure appears to be one of these. When I write a forecast within a model, I evaluate it based on whether my guess for X next period (or some periods out in the future) is close to what X turns out to be. The percentage change in X isn't the point of the forecast for the most part.

So suppose I am forecasting the value of X now (call this time t) for two periods from now (t+2). You ask me to represent that as a growth rate, and so I do the necessary calculation. You ask for a forecast for t+1 and I give you that as well, again as a growth rate.

Now let's suppose I receive data on X for next period, and suppose it's higher than that one-period-ahead growth rate I gave you. Do I revise now my estimate for X for period t+2? The answer, as always in economics, is "it depends". It depends on whether there was any information in the one-period-ahead data that causes me to change my mind about what happens two periods ahead. There may or may not be. So, for example, the CEA forecast for GDP was moved up for 2007 and down for 2008 because, for the most part, there's been no change in their medium-term forecast. The jump in 2007:III GDP is moving some of the growth of GDP between mid-2007 and end-2008 into that quarter.

An imperfect analogy: Mario Mendoza is a .200 hitter in baseball (thus the Mendoza Line). After establishing this level of batting crapitude for years, one day he goes four-for-five. Do you revise your opinion of Mario's hitting prowess, or do you think it's just one of those days (which would be expected to occur randomly about once a season?) Of course not -- hitting has a random quality. So too does GDP or about every other phenomema in economics.

Revisions also play a role. Calculated Risk shows how not focusing on the revision can completely change how you view the home sales data. Others have noted as well that these repeated revisions in previous-month home sales is softening the focus on that market's decline.

One last thought thought that might make things more rosy. Cindy discusses the state revenue forecast due Friday her in Minnesota, and fears that it will come in very negative. Revenue forecasts need a base on which to tax, so they forecast output, not percentage change in output. If today's GDP numbers turn out to be true, the additional income in the Minnesota economy is present longer, and is taxed each period. Even if a slowdown occurs next year, higher revenue collections now are already in the bank for the state government. I have no idea what the forecast will be, but a revenue shortfall of less than $500 million is possible, and that would only chew up the reserves and not cause blood on the tracks in St. Paul. Much more than that, though, and it will be one helluva spring at the Legislature.

I'll be on Heading Right Radio at 2:30pm CT to discuss the state of the economy; those reading this post are invited to question me there!

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Wednesday, November 28, 2007

Not all oppression created equal 

Students at Friends for Life, a group that advocates for pro-life positions, received a letter from another student group called Out Loud, a group "that takes a stand against homophobia and heterosexism." The letter invited them to participate in an event called the Real Real World, an event I find described from a 2004 newsletter of our Social Responsibility program as interactive program that addresses and exposes oppression on an everyday level as well as a larger level. This is mostly portrayed through visual and auditory media, where students take a tour through the life of different populations who face oppression on a regular basis.
A newsletter from this spring for students to find volunteering opportunities on campus describes Real, Real World as
a campus event ... that showcases displays on anti-Semitism, heterosexism, sexism, body image, racism and empowerment.
FfL felt it should present a booth for an oppressed group: the unborn. Its leader, David Brix, then reports to me that he received a call from Out Loud's faculty advisor, who is the interim director of the campus' GLBT Services office. While never explicitly told that FfL could not participate, Brix says he was told that the group's proposed presentation "would probably not fit with the theme of the real real world as her group is about women's progress not about restricting what they can and can not do with their bodies. " (His quote, not the advisor's.) Brix concluded from the conversation that any further discussion would not result in FfL getting the make their presentation.

Perhaps the descriptions of the event that I have are not accurate. In this case, perhaps Out Loud would like to provide a more accurate description of its program. But even then we have a coordinated event created by something paid for by state dollars, to which a student group is discouraged from participation based on viewpoint. One can only imagine what might happen on a university campus if a group created a public presentation called "Real, Real Fetuses".

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Tuesday, November 27, 2007

Quick add re: holidays and recessions 

In relation to my economics post yesterday, which included a reference to Black Friday sales, we're seeing the same pattern on Cyber Monday: Traffic up 37%, number of visitors up 38%, sales up 21%, heavy discounting experienced. Is this a blip up, or pipeline stuffing? Stay tuned.


The rest of the day 

...just got away from me. I expect a quote in the local paper on this latest report from the US Council of Mayors on the effect of the mortgage crisis on local economies. I'll add two quick points unlikely to make the paper (one I didn't even mention because it had no context in the reporter's questions). First, I think the report occasionally confuses stock measures of wealth loss with flow measures of income loss, when they get to the city level. The national estimate -- $166 billion of lost output (about 1.2% of GDP); 524,000 fewer jobs grown; $1.2 trillion in lost home equity -- is a little higher than I might have spitballed, but not outrageous. Second, Global Insights did the estimates, and other forecasts of theirs that I've read would suggest they are towards the lower end of the consensus forecasts. I visited some of the issues in this post from last month. If the Fed is forecasting 1.8-2.5% growth for 2008, you can put GI at the low end of that. Their national recession probability is at 35%.

Also finished grading and reviewing exams. There was a question on the frictional unemployment that results from a decline in the price of oil. More than half the students seemed to conclude that a decline in oil prices was therefore bad. Mr. Bastiat made a call to help explain the make-work bias. Then a pile of kid-taxiing.

Which brings me to the best thing I read tonight. Not that the NBER is going or not going to have its Business Cycle Dating Committee meet, but the history lesson Justin Fox provides.
The Business-Cycle Dating Committee is one of my favorite weird little American institutions. It was set up by Harvard economist Marty Feldstein after he took over as president of the NBER in 1977. Before that, veteran NBER staffer Geoffrey H. Moore (he'd been there since 1939) had more or less singlehandedly determined what was a recession and what was not. Feldstein decided such work was better done by a committee.

...Its members do not follow the short-hand rule that a recession is two consecutive quarters of negative growth in real GDP, a misdefinition that, I learned today (thanks, Barbara!), was probably the dastardly doing of Arthur Okun, chairman of LBJ's Council of Economic Advisers. That's partly because, given the constant revision and re-revision of GDP, you'd have to wait about five years to conclusively declare a recession. But it's also because economic downturns don't necessarily start and end on a quarterly basis.
The NBER explains its procedures here.


What if they gave a football game and nobody watched? 

Brian Goff calls the tug of war between the NFL Network and big cable firms a "classic game of chicken" and the NFL has the upper hand this week thanks to a Packers-Cowboys marquee game on a network that currently reaches 1/3 of the market. Brian worries about the government trying to force a deal. That is already happening in some parts of Wisconsin with the Big Ten Network. Smaller cable companies don't have the whip hand and usually capitulate.

At least the NFL Network is somewhat a private entity. But Steven Dubner points out they carry two tiers of broadcast, and to get the one that has what you want -- the game -- you have to put it in the basic cable and pay for every subscriber to your service ($.70@), not just the ones that want to watch pro football. Even the Packers and Cowboys get less than a 100% share. Steve Dittmore indicates the NFL Network is a loser so far.

But the cable companies aren't exempt from criticism; they are government-protected in many markets as monopolists. Indeed, given BTN has mostly public universities, it's two government created monopolists fighting each other. Too bad both can't lose.

Please help me convince Mrs. S that freedom of choice in the Banaian household means Daddy gets Dish for Christmas.

How to die happy 

Chatting with someone last night, we made one of those Man Law things: No watching bands that have tribute bands. For him it was Journey. For me, an old prog-rocker, it was Yes. Not too hard given most of the music had gone downhill the last fifteen years. But I thought, who has a Yes tribute band?

What a story this is. Not only is there one, but they end up getting to play with Steve Howe.
Following the recent highly successful tour of the UK, Belgium and Holland with Steve Howe of Yes, the founder members of Fragile have taken the decision to call time on any band activities for the immediate future. Steve Carney, Jon Bastable, Mitch Harwood and Tom Dawe (who established Fragile in 1998) intend to explore other musical ventures,...

�We view Fragile as a job done. Our recent tour with Steve Howe was a seminal moment that convinced each of us that anything after the tour with Steve would probably fall prey to the law of diminishing returns. We have nothing left to prove and the last show in Holland was a truly defining moment. We would like to extend our genuine thanks and best wishes to everyone who has supported Fragile over the last decade. ...
I'd like to know of other examples of this. They didn't just do it once, they played four shows with Howe, who hasn't been exactly lazing about. As I said to my friend, if you are in a tribute band and the guy you're tributing comes to play with you, isn't that like Costner in For the Love of the Game? Don't you just send the ball to the owner's box and ride off with Kelly Preston now?


Monday, November 26, 2007

"This Week in Gatekeeping" -- an entry sure to please 

Attention to my friends at Fraters Libertas, whose feature on NARN: The Opening Act "This Week in Gatekeeping" is always a hit: I think I have a winner. A conversation between a blogger writing about baseball in Philadelphia (and Phillies fan) and longtime sportswriter Bill Conlin devolved into this quote from Mr. Conlin:
The only positive thing I can think of about Hitler�s time on earth�I�m sure he would have eliminated all bloggers. In Colonial times, bloggers were called �Pamphleteers.� They hung on street corners handing them out to passersby. Now, they hang out on electronic street corners, hoping somebody mouses on to their pretentious sites. Different medium, same MO. Shakespeare accidentally summed up the genre best with these words from a MacBeth soliloquy: �...a tale told by an idiot, full of sound and fury, signifying nothing...�
The blogger points out several errors in Mr. Conlin's defense of the blogger's disagreement with Conlin over the National League MVP (Conlin supported the winner, Phillies shortstop Jimmy Rollins, while the blogger was persuaded by some statistics that Rollins was not the most deserving.) Conlin went on to suggest that his one mistake in his column was his editor's fault.
My columns are read by a minimum of three editors for fact, style, fairness and balance. Despite that scrutiny,errors still filter by the goalies. In my Rollins column that has upset so many of you, the only thing I would remotely take back was having Holliday performing his Game 163 heroics against the Diamondbacks when, of course, it was the Padres. D�Backs were on my mind as the soon-to-be-vanquished division champions when I wrote the line. Any editor worth his salt should have caught the error. However, most of them are so intent at catching the bad stuff they let the obvious error slip by. Who checks your facts and deletes a line that is over the edge of good taste or might demean or defame an athlete or subject? Did you take a course in the libel and slander laws? Or do you merely throw it against the wall and see what sticks? That�s what most of you do. I can�t pin that on you specifically because I have never read your blog.
So there you have it. His opinion is read by three gatekeepers, and even if they missed his factual error, it is still better than the opinion of a blogger who he never read.

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A recession is when your neighbor's out of work 

You know that old saw: A recession is when your neighbor's out of work, a depression is when you're out of work. (And a recovery is when George Bush is out of work, the Democrats will say, but that's just stealing.)

So what happens when you view it as the Goldilocks Economy? I mean, my GOD, when you can't even get Christmas lights at Costco, how can you think the economy might be in a recession? I mean, don't pay attention to that one-third of respondents to some stupid Zogby poll said they were cutting back on Christmas gift-buying:
The main reasons cited were: lower income this year (28 percent), general economic concerns (25 percent) and increasing energy prices (19 percent). Forty-five percent plan to spend under $500, and only 16 percent plan to spend more than $1,000 on holiday gifts this year.

Even if they choose to purchase an item at a retail store instead of online, 69 percent of shoppers in these cities plan to use the Internet to browse or check prices before heading to the store.

The average spent per person went down; it was just that, with all the stores opening earlier and pushing discounts, more people got through the doors. Kinda like Woodstock. For what it's worth, the online sellers today for Cyber Monday are having network traffic load problems. Not sure how that will translate to sales.

"Oh, King. So negative! Even Ed says you should just look at the data!" Well...

To those concerned: A forecast is just a forecast. And when it comes to recessions, we economists are known to predict them at least eight times in the last five. (It's amazing to me, by the way, why there are so many different ratios of predictions to recessions. I've seen 8-5, 9-5, 8-3, 2-1 in that one link!) There are things we see in the market to which we say "you know, when that's happened before, it was followed by a recession." That doesn't mean one necessarily will follow this time, but it means one had better think about risk.

The Federal Reserve surely is, when it announces that it's willing to make loans that used to be two weeks in length maximum now six weeks. It says it "plans to provide sufficient reserves to resist upward pressures on the federal funds rate above the FOMC�s target rate around year-end." Why would it do that, if not because it fears banks need more money? And why? Perhaps the Fed saw this graph showing that $362 billion in adjustable rate mortgages are going to, um, adjust. Maybe those are converted to fixed rates -- though violating contracts by insisting banks not adjust a contract they paid to adjust by offering a teaser rate seems an odd solution -- and maybe they won't be a problem to pay. But it cannot be good for home prices, and it's not wrong for Larry Summers to point out that when that's happened in the past, recessions usually follow. Not necessarily, of course, but when a rumor runs around Wall Street that Citigroup might be dumping as many as 45,000 workers, shouldn't one pay a little attention?

Not to mention the dollar. If Europe is not going to cut rates as fast as the Fed is, there's little chance that the exchange rate will turn around any time soon, making cheaper oil (in dollar terms) less likely going forward.

All this makes me think that what we're in for is a long, shallow recession. The Fed is hemmed in and unable to provide massive doses of liquidity. Tim Duy argues that the Fed doesn't want to repeat the lessons of Greenspan:
They do not want current policy to breed conditions that foster future instability, such as, for example, an extended period of ultra low interest rates that supports an asset price bubble. In order to keep current policy tethered to the long run anchor, the Fed needs to shift policy before the need is obviously evident. Which means doing something that might be surprising to market participants, such as pausing when inflation trends may still be on the uptrend (sound familiar?). Or, what is likely most challenging, pausing in an easing cycle when the economy remains weak.

Of course, it is the latter situation that the Fed is facing. Policymakers intend to pause at a time that may be somewhat �uncomfortable,� when it is not clear the economy has reverted to its upward trend.
The Fed is signaling a slowing economy that will stabilize shortly because it does not want again to have its hand forced by the market to cut rates, so it instead is having to rely on extraordinary measures like the six-week repo. It remains to be seen if that trick will work, but that it is trying a trick should give Goldilocks enough reason to keep one eye open while she slumbers in Baby Bear's bed, lest she find her neighbor jobless.


It's never the mistake, it's always the cover-up 

For those who thought the Mark Ritchie story was no big deal, the price of poker just went up.
The state's legislative auditor is racheting up his investigation of Minnesota Secretary of State Mark Ritchie after a response Ritchie's office provided proved "unreliable" regarding allegations of inappropriate use of a mailing list generated through an official program.

As a consequence, the legislative auditor will be requiring Ritchie and members of his staff to submit to questioning under oath, an unusual step in legislative audit investigations.

Legislative Auditor Jim Nobles said today his office will continue working on several other investigations but will proceed quickly into the Ritchie probe.

D.J. Tice of the StarTribune says this is no trifling matter:
Nobles is one of the most widely respected figures in Minnesota state government. When he calls someone�s responses �unreliable� and �belated� that someone may have some explaining to do.
Tice provides a copy of Nobles' letter to the Legislative Audit Commission.

The idea (for example from DFL chair Brian Melendez) that this is just Republicans hounding Ritchie is thus quite wrong. Michael of course is reporting on this. Perhaps others can now give credit where it is due: MDE has struck paydirt.

UPDATE (10:30pm): Brunswick story moved on us -- here's an alternate link that works just now. Not up on the STrib's main page.

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Taxes delayed but never denied 

In New Mexico, a county votes narrowly for a sales tax to support the creation of a spaceport (plus a fillip to the school district for "spaceport-related education.") But because the state's enabling legislation required two other counties to join in taxing for the spaceport project to proceed and expenditures to be made, the county doesn't know what to do with the money. The Tax Foundation reports that the county might "be stuck with a pool of money that it wouldn't know what to with." They might not be able to charge the tax as planned from January 1. The blame is largely laid on the other counties that aren't moving fast enough to raise their taxes.

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Sunday, November 25, 2007

Two Mini Book Reports 

Another one of my activities is participating in a book club. This one is a bit unusual - the members are mostly current and retired college professors. The intellectual discourse that occurs can be hyper polysyllabic but it is interesting. I've read two books recently and decided to share my thoughts.

Most of our selections are non-fiction, covering a wide range of subject matter areas (history, politics, economics, philosophy, religion, etc.).

We just completed Infidel by Ayaan Hersi Ali, the Somali woman who was elected to the Dutch Parliament. She is seeking asylum in the USA because of death threats in Holland. There she was under 24 hour a day security because she dared to speak out against Muslim treatment of women. The Dutch are now refusing to protect her in the US yet want her out of Holland. It appears for now that she is living in Holland while security issues are resolved. I thought the book was incredible in many ways. Her life story is absolutely amazing: from Somalia, to Saudi Arabia, Kenya, to Germany to The Netherlands and the US. She is multi-lingual and an excellent writer. Her story is one every woman should read - it is real, it is sad, it is uplifting.

The other book I just completed is Freakonomics, the best seller by Steven Levitt and Setphen Dubner. The book was interesting but after going through all their logic, ideas, stories, results, including sumo wrestlers, real estate, etc.) what I found most valuable was the classic demand/supply theory of economics, as applied to oil prices. Pages 268-271 take the reader through the impact of high and low oil prices, and the ramifications in the West, China, and Saudi Arabia. This is one of the best, clear summaries of oil prices (and any other commodity for that matter) I've read anywhere. You can substitute ethanol, corn, etc. for oil and you get it.


Our Guys are Great! 

The Air Mobility Command (AMC) has just completed its 1,000,000th sortie (defined as a takeoff and landing) since September 11, 2001. About every 90 seconds, a mobility aircraft lifts off somewhere in the world.

What do these great fliers do?
1 - Move fuel to US and allied aircraft (nearly 1,200,000,000 gallons)
2 - Keep about 12,000 people and almost 5,000 trucks off Iraqi roads each month, helping defeat Al Qaeda's IED strategy
3 - Transport senior US leaders, including our president
4 - Currently are rushing about 12 Mine Resistant Ambush Protected (MRAPs) vehicles to Iraq and Afghanistan, every day. These are awesome machines, incredibly well designed to protect our soldiers against the IEDs. Yankee ingenuity at work, again. We adapt - one reason we can achieve what we do achieve.
5 - Provide aeromedical crews to wounded soldiers on a very timely basis.

Thanks to Michelle Malkin for finding this information.


Saturday, November 24, 2007

Best of today 

Michael and I are taking a week off from The Final Word. Just as well, as Michael is busy chasing down pieces of the Mark Ritchie debacle. Gary has found another one.

Me? I'm trying to figure out how to get a gig researching a Cigar Aficionado bash. Otherwise I'm writing. Have a good weekend.

(Shopping? No, because I'm trying to improve the trade deficit and stay out of those Icelanders' way. And Greg Mankiw anticipates my Tuesday principles lecture -- all the better since I use his book!)

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Friday, November 23, 2007

The immigrant's new best friend 

More than three years ago, I wrote a study of Armenian migration and remittances around the world. (Here are the two papers that research generated.) At the time, one of the complaints I heard from many sources were the high prices charged for remittances by Western Union. The only reason I could find for the higher prices was the ubiquity of WU around the world, with over 320,000 offices. An article in Wednesday's NYT suggests it has "five times as many locations worldwide as McDonald�s, Starbucks, Burger King and Wal-Mart combined."

Stung by the criticism, Western Union now ties its future to immigration and has become a champion for open borders.

Having once stressed efficiency (�the fastest way to send money�), Western Union now emphasizes the devotion the money represents. One poster pairs a Filipino nurse in London with her daughter back home in cap and gown, making Western Union an implicit partner in the family�s achievements. �Sending so much more than money� is a common tag line.

The company sponsors hundreds of ethnic festivals, concerts and sporting events, from cricket matches for Indians in Dubai to sack races for Jamaicans in Queens. Last year it paid a Filipino pop star, Jim Paredes, to record a Tagalog song urging migrants to send money home. It paid the producers of a Bollywood film, �Namastey London,� for a scene in which a Western Union wire transfer helps rescue the heroine.

The Western Union agent in Panama played the rescuer�s role himself. With many of his customers illegal immigrants � mostly from Colombia � he put three lawyers on retainer and started a radio show. The lawyers answered callers� questions and scheduled free appointments to get them legalized.

�Every time an immigrant is forced outside the country, we lose a potential customer,� said the agent, Jaime Lacayo, who provided the legal services for two years and still runs the radio show. �We have participated in many marriages of foreigners marrying Panamanian ladies, because that is the best way to legalize your status.�

Fees have dropped, but along with this are concerns about the use of the system by illegal aliens and by terrorist groups. A slowing economy in the US has slowed the growth of remittances according to this survey from July. So if you want to place bets on the immigration debate (along with the state of the US economy), you can either go long or short in WU.

In the Armenian case, WU still has the lion's share of the market for remittances from everywhere else (there's one decent competitor making some inroads), but the ex-Soviet remittance market -- which is a majority of the market -- is picked up by banks with ties to either the old Soviet savings bank or postal bank systems. If competition works elsewhere, WU still has the largest network.

Side note: cool graphic from the Times on remittances from the US to the world.

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You have to admit, s/he's hard-working 

John Hinderaker has found the best story about this Thanksgiving -- a "Director of Equity, Race and Learning Support" who uses the Thanksgiving story to create resentment among native American tribes for "500 years of betrayal returned for friendship." Hey that's great. I hope s/he* decides next to invite guilt on the Fourth of July, for being so mean to the British. I mean, they gave us the common law and our common language, and look how we thank them! You KNOW this list is going to show up in his/her professional development report to demonstrate his/her work accomplishments.

John notices this Fox News story on the matter, which includes a quote from a native American in Seattle:
The spirit of Thanksgiving, of people working together to help each other, is the spirit I think that needs to grow in this country, because this country has gotten very divisive.
To the Seattle School District's director of Equity, Race and Learning Support, a special Thanksgiving wish from my friends at Fraters Libertas.

*This is not a bow to PC. I have no idea if someone named "Caprice" is a man or a woman. But no way is someone named "Caprice" a conservative -- you'd use "Cap" or "Cappy" instead if you were.


People respond to incentives: Newspaper carrier edition 

Mrs. S noticed this morning: Right around Thanksgiving our SCTimes newspaper is delivered with a greater amount of care. Mrs. likes to keep a number of trinkets on our front step -- seasonal lights are up year-round. The newspaper is usually thrown (a tradition I carried on in NH in my own youth) and stuff gets knocked over constantly. Breakable trinkets are broken. But over the last few days the paper is placed against the side of the entry, on end, able to be grabbed while still standing in the doorway.

What will come next is the now-standard Christmas card from the carrier, replete with cute photo. Because it's a morning paper most of us don't know who the young man or woman is. I worked delivering an afternoon paper and did collections myself, offering me more opportunities for tips and gifts. (The SCTimes collects subscription payments itself by mail.) Indeed, the afternoon delivery person, being more visible, is likely tipped at a much greater rate. No chance of the morning carrier telling the neighbors about the cheap Banaians.

Come January, of course, the paper will once again by tossed on the step, and once again I'll have to put on shoes to step through the snow to get it. That's OK, though. The WSJ is always left in the driveway, and that guy never expects a tip.


Wednesday, November 21, 2007

Starvation in a land of plenty 

I recall (can't find the story right now) that there was once a poll in the new Russia of 1992 or 1993. The question was whether you would rather have shops with goods that you didn't have enough money to buy, or would rather have money but nothing in the shops to buy. Of course, the former won handily -- getting money was something you controlled, goods in the shops was something you had no control over.

Venezuelans are getting both and neither, simultaneously.
President Hugo Chavez's government is trying to cope with shortages of some foods, and the lines at state-run "Megamercal" street markets show many Venezuelans are willing to wait for hours to snap up a handful of products they seldom find in supermarkets.

"You have to get in line and you have to be lucky," said Maria Fernandez, a 64-year-old housewife who was trying to buy milk and chicken on Sunday.

The lines for basic foods at subsidized prices are paradoxical for an oil-rich nation that in many ways is a land of plenty. Shopping malls are bustling, new car sales are booming and privately owned supermarkets are stocked with American potato chips, French wines and Swiss Gruyere cheese.

Yet other foods covered by price controls � eggs, chicken � periodically are hard to find in supermarkets. Fresh milk has become a luxury, and even baby formula is scarcer nowadays.

The shortages are prompting some Venezuelans to question Chavez's economic policies while he campaigns for constitutional changes that, if approved in a Dec. 2 referendum, would let him run for re-election indefinitely.
Perhaps ol Hugo could look at what good price controls have done for Zimbabwe.

The government says it now has to import leg of pork "because local suppliers declined to participate." This is, they say, political. So too is starvation.

(h/t: Angus at KPC)

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A few weeks back, after some investigative reporting by my NARN colleague Michael Brodkorb, we ran a story on The Final Word about a potential irregularity with the use of a mailing list from an official function of the Secretary of State, Mark Ritchie, for a newsletter that solicited donations for Ritchie's campaign. At the time, Ritchie was quoted as saying he didn't know how Republican operatives who attended the official meeting got his solicitation. Today, Ritchie admits he personally gave the lists to the mailer. Michael now documents as well that Ritchie's office claimed not to know how the lists got to the mailer in a response to questions from two legislators.

Kudos of course to Michael. Also to Mark Brunswick at the StarTribune for following up on this story and getting the scoop on Ritchie's admission.

Now it's the rest of the media's turn. On Nov. 4, 2006, the PioneerPress endorsed Ritchie (which Ritchie has reproduced on his own campaign site), including this paragraph
We will hold Ritchie accountable to his promise to run his office as a "nonpartisan" � a big challenge for anyone affiliated with a political party.
PP, you're on the clock.

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Tuesday, November 20, 2007

Property rights: The Thanksgiving edition 

Courtesy of John Palmer. Here's a much earlier version of the same story. Someone gave it to me in graduate school, and I still share it with my classes.


Return on higher education "investment" 

A new policy paper by Richard Vedder of the Center for College Affordability and Productivity argues that public higher education is overpriced and overinvested. He finds that
Looking at hundreds of regression results, the overwhelming majority show a statistically significant negative correlation between state government appropriations and economic growth�the more states spend on higher education, the lower the growth in personal income per capita in future time periods. In some estimates, the results are not statistically significantly negative, but never do I obtain results consistent with the conventional wisdom that university spending promotes economic growth.
He points to examples such as Illinois, New Hampshire, South Dakota and Tennessee (low state appropriations, high growth rate) versus Michigan, Kentucky and North Dakota (high appropriations, low growth.) The difference in income in 2002 dollars may be as much as $1400 per capita.

Some of Vedder's writing is a little overwrought, for example suggesting that university professors like myself have too large a conflict of interest to take the lead in this research. And this particular report doesn't show the research behind what he's done (though for the point above, you could read this paper from the Mackinac Center.) But he makes a couple of good points. One is that there's no real reason to believe an increase in state appropriations for higher education will increase the state's growth rate. You are measuring an input, not an output. Vedder's research shows that even holding state tax burden constant (which has a negative effect on growth, in his regressions), you get a negative impact of state appropriations on growth. I note he includes a measure of number of bachelors degrees awarded as share of the25+ population -- it does have a positive impact on growth. But he argues (in his 2004 J Labor Research paper, not openly available online) that there's only a weak link between current appropriations on higher ed and the proportion of the population holding a bachelors. Seems to me to make a big difference whether or not you believe that.

Best of what he has isn't the growth regression, but a list of reasons why college is overpriced. These include third-party payers (often by government, making the system too politicized); resource rigidities; and issues of ownership and governance. See the report for the full list. One suggestion for reducing these costs that I love is the idea to tie presidential salaries to tuition increases. Student governments should start clamoring for this now.

Anyone interested in doing something similar with Minnesota? SCSU's data is here.

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Monday, November 19, 2007

Thanks to Our Troops 

During this time of Thanksgiving, I hope all will remember our troops in a manner fitting their sacrifice. Since our inception as a nation, we have been extremely fortunate to have outstanding men and women who understand the value of freedom and the price we sometimes must pay.

Today, as in generations past, our best are protecting the rest of us. We here in the states can celebrate with family and friends. Our co-citizens overseas cannot. Please take a moment to send a "THANK YOU" to our troops. You can do it here. It won't take long but means a ton to our overseas men and women.

To all our readers, Happy Thanksgiving.


What to do with a bad state economy? 

My friend Dave Aiekens at the St. Cloud Times sends me a link to an interview with state economist Tom Stinson in the new MinnPost. I commend it to my more conservative friends; as Dave pointed out in his email, I'm not the only person who's a bit pessimistic about the state economy. Given Stinson is writing up the new budget forecast as we speak, we cannot look at this interview and figure there'll be much glee.

Stinson responds to a question

MP: There has been a lot of debate about whether this is because of a lack of investment in government or a refusal to pay taxes, or, on the other side, too much taxation hurting the business climate. How much of a factor are these things and how long does it take before these decisions are reflected in economic performance?

TS: There is not much you can do in the short run to stimulate a large economy like the State of Minnesota's. Typically it takes awhile for a cumulative impact to be noticeable. But one of the large changes that may have occurred is that the production of defense material has become more important in the U.S. economy than it was five or 10 years ago. And that is not an important sector in Minnesota. So to the extent that the growth in the U.S. economy is coming from defense production, Minnesota is bound to grow more slowly.

Another place where we have to be concerned is our investment in new technology. We are not talking about just the state government's investment, but the broad range of investments in research and development. The identification of new products and new processes and new ways of doing things has slumped significantly in Minnesota compared to what it was 20 or 30 years ago. It could be that part of our underperformance economically is that we just haven't been investing enough in r&d compared to the rest of the country.

I wonder if Tom has seen my note on the new study on Minnesota's place in acquring international patents. Now try to square that with the latest press release from St. Cloud's own state Senator Tarryl Clark:
Sen. Clark said the Legislature must focus on passing a new bonding bill, a transportation finance package to fix the state�s roads and bridges, as well as a new tax bill aimed at spurring job growth and reducing property taxes soon. Many other strategies to promote growth in the emerging bioscience and renewable-energy industries should be examined, according to Sen. Clark.
What in this would fix the Minnesota economy? The tax bill being discussed raises taxes on some in order to give others the possibility of a property tax break. At best that's sloshing money between households. If you raise taxes on rich individuals, from where do you get the money for private investment? As Craig Westover points out, "Talk about how �we� distribute the resources �we� have easily becomes talk about how �we� distribute the resources �you� have."

Gary Gross provides a reminder of what the Senator wanted to use to fix our economy last year. Leo suggests the taxing will continue until morale improves.

It's no use pretending the problem of a softening economy isn't there. The sooner conservatives recognize it and propose what to do with it, the sooner they can start beating back the tax proposals of Sen. Clark. Next week will focus the mind...

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Why wouldn't this be true? 

This makes perfect sense to me:
According to Chinese Restaurant News, there are nearly 41,000 Chinese restaurants in the United States, three times the number of McDonalds franchise units, and more than the number of McDonald's, Wendy's and Burger King franchises combined!
If you run a franchised outfit, in order to make profits you have to limit entry. Franchisers will make money by providing exclusivity, so of course the number of Chinese restaurants will be larger.

Mrs. S and I were driving out to LA once, and laid up for the night at a half-decent hotel outside Ogalalla, NE. One of the tricks of traveling as vegetarians in America is to know where all the Indian and Chinese restaurants are. We ate at this place, which looked pretty iffy from the outside. I recall the food being only so-so, no better than most St. Cloud Chinese, but given the options in western Nebraska...

You wonder how that place ended up there.

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Campus show trials 

In today's StarTribune, Katherine Kersten describes a case of campus "making an example" of a student who made a flip joke. A student at the MCTC campus newspaper jokes about missed deadlines by creating a noose out of his sweatshirt drawstring, hangs it with a note of mock warning, and then removes it before leaving the newspaper's office. Within days, he is fired.
At a meeting set up by college authorities, he apologized profusely to staffers. He called the noose joke "unprofessional" but explained that it was a misunderstanding.

"Too late," one student responded, said Keith. "The staffer told me, 'An example needs to be made. We need to raise awareness of issues like this on campus.'

"They didn't want an apology," Keith added. "They wanted me out of there so they could launch the aftermath."
Not the student's best moment; it's a tasteless joke. But one could hardly have said he was singly out black student reporters for the noose. That did not matter.
"We are angry," Lisa Dean, president of Association of Black Collegiates, a student group, told the Star Tribune for an article about the incident. "If we do not nip it in the bud, it will spread and a lot of students may not want to attend this college because of racism."

At the P.C. circus' surreal climax, Keith unknowingly walked into a protest rally where a crowd vented outrage at his bigotr. Meanwhile, administrators scrambled to use the incident as a "chance to educate our students."

Educate about what? You guessed it: "We want to educate around cultural understanding," Laura Fedock, interim associate vice president for academic and student affairs, told the Star Tribune. "We need to teach each other when something is offensive."
Kersten wonders if students learn anything else. But she then gets to the heart of the matter:
The thinly veiled secret is that an incident like this is a godsend to campus political posturers and must be milked for all it's worth.

Today, a favorite college pastime is fanning the flames of grievance. Victimhood is a tremendous source of moral power, and being outraged and oppressed is a sure bet to get your picture in the paper -- displaying a look of grave concern for all humanity.
On the St. Cloud State campus last week, some muttonhead scratched swastikas in our student union building. One was in the muticultural office, found last Tuesday. It's unlikely we'll ever figure out who did it. But this doesn't prevent one administrator of saying we will "come together as a community and develop a plan."

For what? If the perpetrator(s) are not on this campus, what good does it do? Because it gives the political posturers not only a photo op but power, power to impose a particular view of race. One member of the campus sent around a statement on the use of swastikas which concluded with this sentence:
While what might be thoughtless provocation should not be criminalized to an extent beyond room for education and socialization, hate crimes must be identified as such and condemned and persecuted.
The contradiction within that very sentence -- don't criminalize, but persecute -- is a shining example of the problem with the definition of hate crimes. (So too an exhortation at the bottom of his flyer advertising a public forum which says "Zero tolerance for undemocratic statements." In bold and underlined, just in case you might miss that.) At both these schools, statements of "zero tolerance" make it more difficult to have these conversations in the open.

Not that the posturers really care.

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Sunday, November 18, 2007

Patriotism - It's Still Here 

Normally I don't refer to Powerline because so many people read it. However, if you don't, you simply must see John's video of his youngest daughter's chorus. Part of the program was sung by the elementary students only. Much of the rest was performed by the four high school choirs. The finale, a combined chorus rendition of the "Battle Hymn of the Republic" - it is wonderful!!!

Many (many) years ago, grades five through eight, I participated in city-wide music concerts sponsored by the Catholic schools in my hometown. Participants included at least 500 band members and 1000+ choir members. The finale was always "God Bless America" and it brought down the house. This video of John Hinderaker's daughter's concert brought back the memories, the tears and had the same emotional effect. Simply awesome!


Friday, November 16, 2007

Is Chris Dodd screwing up monetary policy? 

I don't think I've ever seen this line of logic before. Senator Christopher Dodd is holding up any confirmations of Federal Reserve governors until after the elections.
Senate Banking Committee Chairman Christopher Dodd (D., Conn.), suggested Friday that he might not bring a vote on the renomination of Federal Reserve Governor Randall Kroszner, a leading figure in the central bank�s effort to overhaul its mortgage regulation.

Kroszner�s term at the Fed expires Jan. 31, and the White House nominated the former academic to a 14-year term that would run through 2022.

�There�s one nomination here that would be for somebody [for] 14 years,� Dodd told reporters on a conference call. �We�re frankly getting down to less than a year away from the [November 2008] election. On nominations of that length, I�m fairly reluctant.�
There are already two empty seats on the Federal Reserve Board of Governors. Losing a third seat gives the Fed a much smaller board with which to make monetary policy than the original Federal Reserve Act intended. The nominations were made on May 16. My impression is that having Kroszner off the board and holding up the other two makes the FOMC more weighted towards academic economists, and possibly more hawkish on inflation. Why Dodd thinks this is a good idea is beyond me. And it seems a new extension of Congressional running-out-the-clock on divided government.

At any rate, fewer members on the Board of Governors robs monetary policy of a diversity of viewpoints.

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Equal accommodation 

This article from our campus newspaper is fairly persuasive that a room to allow Muslim students the opportunity to wash their feet before prayers is less controversial than it seems. The front page of the print edition has a very large picture of a student washing his feet, but the reporting inside is thorough in making the point that there is equal accommodation of all religions. The foot sink was installed in the student union -- not a state building, technically -- in 2004, though accommodations have been made since 2001.
"The purpose of our building is to serve student organizations, and as part of freedom of religion, students have the ability to create their own student organizations based upon religious tenants," [Ed Bouffard, Atwood Center director] said. "Our function is to serve the group, not to serve the religion. And if their group gathers around a particular context, that is their choice, and we serve those groups."

"One of the big issues has been unfair treatment of Christian groups relevant to Muslim groups," he said. "Sometimes people frame it as, 'well gee, you are catering to Muslim students, and Christians can't do that.' Well in the case of the foot sink, it is done for safety. They don't pray in that room, they wash their feet in that room, and that is a cultural difference. I think here we certainly serve both groups."

Bouffard said about 12 Christian groups use Atwood's facilities, and in 2006, Christian groups made 454 building reservations compared to 55 for Muslim groups.

A Christian organization also recently conducted a 24-hour prayer room, and Bouffard said Native American students have sometimes requested to burn sage to cleanse rooms. In those cases, fire alarms were temporarily turned off to allow the burning. Certain Pagan and Wiccan groups also meet in Atwood regularly.
It's a pretty compelling case Ed makes. One question, on equal accommodation, seems to be cared to by the numbers on number of Christian building reservations (those can be anything from a booth to hand out circulars to advertise to a prayer group.) The other, state funds, is met by the use of a student union paid for from activity fees. I'm a little uncomfortable with that, as students don't really have a choice on paying for it (short of not attending a public university.) But I don't know that this is a major objection.

Anyway, compliments to the reporter who wrote this piece, Chad Eldred. It was very informative.

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The churn of Minnesota 

I was wondering about something the other day in thinking about the decline of the Minnesota economy. At what rate does the Minnesota economy create jobs?

Now, I realize you probably read that the economy lost jobs last month. But that's not the full story. Lots and lots of people got new jobs in October; lots and lots of other people lost theirs. It takes some time to get the numbers, but for instance in the quarter ending March 31, Minnesota added 140,915 jobs and lost 133,393. What you would get for the usual report is therefore "a gain of 7,522 jobs." The smaller number fails to give you a feel for how much dynamism there is in the Minnesota economy, or that for any other state.

The new Business Dynamics report from the Bureau of Labor Statistics today gives you a feel for that. Look at the last two pages of the report for a snapshot of state gross job gains and gross job losses as a percent of employment, and you can compare Minnesota to the rest of the area. I've selected data from Table 6 therein.

Job gains Job losses

Mar-06 Mar-07 Mar-06 Mar-07
U.S. 6.9 6.6 6.1 6.2
Illinois 5.7 5.5 5.1 5.2
Indiana 6.2 5.8 5.6 5.6
Iowa 6.4 5.8 5.7 5.9
Michigan 6.0 6.1 6.6 6.5
MINNESOTA 6.6 6.1 6.0 5.8
No. Dakota 7.9 7.0 6.5 6.5
Ohio 6.0 5.7 5.8 5.7
Pennsylvania 6.0 5.7 5.4 5.4
So. Dakota 7.1 6.5 5.5 5.9
Wisconsin 6.0 6.0 5.7 5.9

March 2007 is the last quarter for which we have data. One can see that, though Minnesota has gross job gain rates below those in the national economy, so do all the other states in this area. California and New York, in contrast, have gross job gains in excess of 7%; Utah had an 8% job gain rate in March 2007. Governor Pawlenty, on his radio program this morning, noted the job loss but asked for comparisons to these states I've included in the table.

Whenever I present economic analysis about the St. Cloud economy, I show a picture of the counties around St. Cloud. There are dots on the picture. Each dot represents a worker who drives to a job within a five-mile radius of the St. Cloud City Hall. The dots extend along U.S. 10 to the north, along I-94 in both directions (not so much Highways 23 and 15). I then show them a second map. Lots of dots down into the Twin Cities, not so many going out. That map shows where people work who have a house within five miles of the St. Cloud City Hall. (The map isn't precise -- I freehand the location of City Hall by finding where Highway 23, Division Street, crosses the Mississippi. Go ahead, try it yourself.)

What these numbers should tell you is that the American economy is a job creation machine and a job destruction machine. This is sometimes called "the churn" or historically as "creative destruction". And the most beautiful thing about it is not the jobs it creates but the opportunities for new goods and services that produce happiness, in things from lawn care to health care. But these data are a marker that, somehow, the Minnesota economy still is able to provide opportunities for jobs and the dynamism to reduce or even eliminate those industries where we no longer have a comparative advantage.

People wonder, when I show them the maps, whether this is a problem for St. Cloud. What does it mean for an increasing share of St. Cloud residents to work in the Cities? What does it mean for an increasing share of St. Cloud workers to travel substantial distances to their jobs each morning? (A local manufacturer told me of a worker he had from Randall, for example -- he lost that worker when a manufacturer in Aitkin offered a similar job at about the same wage.) I reply to them, it's better than the alternative, to have job loss without job gain.

The question is what leads to job gain? What reduces job loss? For example, the discussion whether you can "government your way to prosperity" should turn on that. For it is only in knowing how to keep the churn moving that can lead to prosperity.

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Another victim of ethanol 

Your Thanksgiving dinner:
The rising cost of oil and other utilities, combined with an explosion in the cost of corn feed, has increased the cost of raising a turkey by as much 35 percent and costing the industry more than a half-billion dollars.

Those increases haven't gone unnoticed in MetroWest.

"Oh, yeah, big time," Gerard Farms owner Mike Gerard said yesterday when asked if he has seen an increase in feed costs. "I'm paying 20 percent more for turkey this year than I paid last year."

Naturally, that increase has led to customers seeing higher prices.

Last year, Gerard said, the price of a roasted turkey with stuffing and gravy at the Framingham farm was $3.19 per pound. This year, it's jumped to $3.39. The price for fresh, uncooked turkey has increased even more, from $2.29 last year to $2.59 today.

For a 15-pound bird, which should serve about 10 people, that adds up to an increase of only between $3 to $4.50 a turkey.

...With many growers switching to the more profitable corn for ethanol, turkey farmers are trying to cope with a one-two punch of increasing corn prices and decreased soybean production.

According to some estimates, the higher prices translate to about an 8 cent increase per pound, per turkey, or about a 35 percent increase in the cost of raising just one bird.

The decline in soy production has also hurt us vegetarians. Tofurkey is made of course with soybeans, so that price is also rising. The roast itself was $10-$12 for a26 ounce piece with stuffing included five years ago. You seldom see them under $20 nowadays.

This just another part of what John LaPlante calls The Dark Side of Ethanol.

(h/t: Mark Perry, who suggests you hedge your food bill with ADM purchases.)

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Hurry up and eat 

Mark Steckbeck answers the reasons why restaurants play loud music and run the air conditioning down to 60 degrees.
A restaurant ties two goods together and then charges you one price. You pay for the food and they give you a free place to sit down and eat. (It makes you wonder where the D.O. J.'s Antitrust Division is since Microsoft.) The restaurant makes only so much money from each table of patrons and relies on continuous turnover to keep the money coming in.

So the goal of the restaurant is to make you just comfortable enough that you enjoy the restaurant but not enough to keep you hanging around.
This of course ties in to my Panera discussion from Wednesday -- where, I'm happy to report, the restaurant has gone back to discounting the coffee for those with travel mugs. The net price change for coffee, bagel and cream cheese with your own mug is now about 12% vs. 28% before.

Steckbeck suggests trying to prove his point by saying to the server who asks if you need anything else "Yes, some peace and quiet. We're going to visit awhile." My mother-in-law used to go out to Perkins with three other older women, buy coffee and a roll and have a long chat. The manager eventually brought out an egg timer. They never returned.

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Thursday, November 15, 2007

Soon to be dead and gone 

Molly Hatchet knows a little something about Mitch "Erstwhile MOB" Berg:
You think you're real sassy,
But you know your headed for your doom,
You look a little older but you sure ain't no wiser,
You're running for a stone-cold tomb.
Untouchable, he says? Hardly. We can get to him. We will give him no quarter in which to practice his silly bagpipes. He and his "it was twenty years ago today" navel-gazing shall be put to the power of the MOB.
You've got to find out for yourself,
You've got to learn it all on your own,
All this messing around,
Gonna put you in the ground,
I fail? Have you checked his Blog Readability? Go ahead, put the Berg blog in there and see what you get? Yes, Elementary School. Centrisity scores Junior High by comparison. All that pontification, all those twenty-years-ago-today piffle, and for what?
Start to feel the power,
Hundred miles per hour,
You're on the wrong side of the road,
There is of course hope for Mitch. There is redemption. He may indicate his loyalty to the MOB government by a very simple act. He must change the banner of his MOB badge to read

That's right. Sent to the Caucasus, the ancestral home of your mayor, where an eagle will devour your Guinness-infested liver each day and then have it regenerate each night, only to suffer that fate again.
Your hands a-start a-shaking,
You'll feel your mind a-breaking,
You'll wonder why it's getting so cold,
Your body's feeling icy,
That box will hold you nicely,
You'd better say goodbye to your soul.
This is your last chance, or the titans of the MOB will leave you dead and gone.

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"Biggest bang for the buck" 

I've been meaning to write this for a few days. I saw a link from Lileks on the Minnesota Early Learning Foundation. I was reasonably sure I knew what that was about, after hearing Strom interview Art Rolnick a couple weeks ago. Sure enough, MELF is the attempt by Rolnick and others to see if the economic research on benefits from early childhood education are something one can intentionally do (as opposed to finding benefits from early childhood ed in natural settings, where the addition of education is perhaps the by-product of something else.)

United Health is giving money away to boost its corporate image, and MELF got $2 million. MELF is funding a $30 million pilot project in St. Paul.

Early childhood programs show "the biggest bang for the buck," Rolnick said. A $20,000 per-child, two-year investment could show a return of up to 20 percent for society each year of the child's adult life -- in the form of higher income, taxes paid, staying off welfare and staying out of jail.

His proposal: A market-based system to fund scholarships for low-income families. They would get scholarships of $10,000 to $13,000 per year per kid to use for high-quality child care.

...An eventual endowment of $1.5 billion to $2 billion, he said, would fund the program for nearly all Minnesota families in poverty.

"This one-time investment," Rolnick said, "is roughly the cost of two stadiums."

In the Strom interview, Rolnick states that the project will provide results that will be public and assessable by independent researchers (focusing on 1200 families in Frogtown.) I don't know all the details of the program -- the program includes counseling of parents on educational choices, so if a parent has two preschoolers, you only need one counseling, but there'd be a scholarship for each child -- but the issue is one of scalability, as the originators clearly understand.
Small-scale early-childhood-development programs have been shown to work, but can their success be reproduced on a much larger scale? There are reasons to be skeptical; some recent attempts at scaling up early-childhood development have been disappointing. But based on a careful review of past and current programs, we believe that large-scale efforts can succeed if they incorporate four key features: careful focus, parental involvement, outcome orientation, and long-term commitment.
The project seems something worth trying; it's a good thing that both liberal and conservative groups can agree to put effort into finding out whether the larger scale is viable. Here's a status report of what they've done so far.

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The luxury of A-Rod 

I have to wonder, after reading this article on how the share of baseball revenues going to player salaries has dropped to 41% from 58% six years ago (h/t: Felix Salmon) whether the luxury tax and increased revenue sharing in baseball has held down salaries. The luxury tax was imagined not to do too much, and revenue sharing may be a drag only because it transfers money to small-market teams that do not compete for free agents. If it transfers 17% of revenue from players to owners, I suspect your next collective bargaining agreement will have that as a sticking point. Lucky for us, that's not until 2011.

I had wondered whether Torii Hunter might take $55 million for four years, but the article argues he would get $75MM for five -- not likely a price the Twins would go, no matter how you project the revenues, because that sets the bar for the M&M boys.

So A-Rod returns to the Yankees for the Yankee premium. If Torii goes there, the premium probably gets him an extra $3MM/yr.

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Indoctrinate Me: �Remember 9-11� = White Belligerence 

Indoctrination on campus, such as the residential life program at the University of Delaware, is not limited to students. Faculty members are also on the receiving end.

One of the most blatant examples came early in my university teaching experience, when the annual spring faculty conference featured a session on �White Belligerence in the Academy.� The promotional brochure said that
Like previous white calls�Remember the Alamo! Remember Little Big Horn! Remember the Maine! Remember Pearl Harbor! Remember 9-11 has recently become a racially quoted term among whites to question non-EuroAmerican views and beliefs.

This workshop will explore an understanding that academia is not immune from invoking the Remember 9-11! call. Discussion may include how faculty of color can minimize exposing themselves to white belligerence in the academy.
Never mind that the people who died in the September 11 attacks came from dozens of countries. Never mind that the people who died included virtually every racial, ethnic, gender and religious category. Never mind that the destruction of critical infrastructure disrupted banking and closed stock and bond markets, causing huge economic losses. No, those who remember 9-11 are expressing �white belligerence in the academy,� oppressing �faculty of color� and �question non-Euroamerican views and beliefs.�

That is simply indoctrination targeting the faculty, approved and financed by the administration and our tax dollars. The post-conference administrative recognition of the faculty presenter is still available on-line (scroll down to page 6).

Unfortunately, the adverse effects of such narcissistic pseudoacademic nonsense (published here), are not limited to our faculty. A student described how concern over "white belligerence" spilled over into adverse behavior in the classroom.

As King noted, �we are lucky to have found this evidence in the Delaware case... There are more Delawares.� Sunshine remains the best disinfectant.


Wednesday, November 14, 2007

Sign, sign, everywhere a sign 

The mayor notes with pleasure the creation of new badges for MOB members who wish to display their status in the MOBosphere. Unfortunately some choose to use these for ill and not good. As members of the NARN Council had already thrusted themselves into the public arena to opine on whether or not someone or some post was racist, they could not claim that their advice was not considered. Neither would it be true to declare the Council elected; only the seat of the mayor's office has been chosen by the MOB. My grant of councilor status is my choice.

As to the former mayor, his input is welcome and will be considered but again, only one person is eventually held responsible. In the words of the great Parcells, if I am making the dinner, I get to buy the groceries. In a moment of crisis, someone had to step up and make a decision. Since NARNians were already in turmoil over this, decisive action was needed.

So the ingratitude of this remark from Mitch will not go unnoticed:
I call upon King Banaian to relinquish control over the MOB�s policy-setting apparatus and, above all, the �Blue� and �Red� lists of blogs� standings in the MOB.
What to do, what to do? We turn to the source of all wisdom,
They'll come a day when you'll be free Northern Land
The band will play your folk songs Northern Land
Caught in this crossfire is it any wonder
We don't understand
The Mayor's office rules that Shot in the Dark must bear this logo in order to fly the MOBroll. There will be a meeting at the Patriot studios about this shortly.


Deer in the headlights 

Last night Mrs. S drove past a deer that had just been hit and killed on a county road outside of town by St. Stephen. An hour before a friend had shared with me his story of wiping out doing $10k of damage his brand new Subaru Hyundai in a deer accident on I-94 near the St. Augusta exit. He sent along this article on the frequency of deer accidents.

This time of year, through December, is prime time for collisions with deer. That's because it's mating season, and deer are more active.

In the past 10 years, Minnesota has averaged about 5,100 vehicle-deer collisions each year (probably low since many such crashes are never reported), of which nearly 400 annually result in injuries. Since 1995, more than 30 people have been killed in Minnesota in car-deer collisions.

"I feel all funny. I see bright lights! I think I'm in love! No, wait, it's a car." (With apologies to Old Man Simpson.) To quote Sgt. Esterhaus as well, let's be careful out there today, OK?

UPDATE: My friend filled in a couple of details, changes crossed out and noted.

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Documenting Delaware 

Stuart Taylor, in National Journal this morning, provides some additional details of the now-suspended indoctrination program at the University of Delaware. Resident assistants who were to lead the program were provided with a definition of racism:
"A RACIST: 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. By this definition, people of color cannot be racists.' " [emphasis added]
People who've been discussing our little debate in the MOB would, since I'm pretty sure all of the discussants are white, are therefore arguing about racism as racists. Quite interesting, isn't it?

But Taylor goes on to highlight other elements of the "diversity facilitation training" for RAs.

Delaware students have been not only inculcated with the lunatic view that all white Americans are racists (and that "REVERSE RACISM" is a "term ... created and used by white people to deny their white privilege") but also:

* Told to confess their "privilege" or lament their "oppression";

* Informed that "white culture is a melting pot of greed, guys, guns, and god";

* Required to "recognize that systemic oppression exists in our society" and "recognize the benefits of dismantling systems of oppression" (whatever that means);

* Instructed to purge male residents' "resistance to educational efforts" and "concepts of traditional male identity";

* Challenged to "change their daily habits and consumer mentality" for the sake of "sustainability";

* Pushed to display on their dorm doors politically approved decorations proclaiming support for (e.g.) "social equity" (whatever that means);

* Subjected to other "treatments" designed to alter their beliefs and behaviors and inculcate university-approved views on politics, sexuality, moral philosophy, and more;

* Ordered to attend residence-hall training sessions and submit to one-on-one sessions with RAs, who filed reports to their superiors about individual students' "level of change or acceptance" of the thought-reform program.

I think I see a new t-shirt, not unlike the "Borders, Language, Culture" shirts that Michael Savage has made famous. "MOB: Greed, Guys, Guns, and God." I see a new campaign slogan.

(I might drop the 'guys' part, though; the Lady Logician and Lassie have provided the MOB with yeowoman service, to invent a word. Your suggestions invited.)

What should really bother the reader here is that we are lucky to have found this evidence in the Delaware case. Delaware is just unfortunate enough to have light seep through the cracks in the academic edifice. Res Life programs are not reviewed by a curriculum committee of faculty; they are imposed by administrators or student governments through an even more opaque process. There are more Delawares.

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Gimme coffee or taste my ire 

This morning's visit to Panera brought an unwelcome, though not unexpected, surprise. Prices were raised on several products and lowered on a few. In particular, beverage prices were up across the board, including the ending of the $.50 discount one received for using a travel mug. (I could comment on this as anti-green behavior, but you know that would be crocodile tears in my case. I'm just unhappy about losing a discount I used to receive.)

Now the Panera we frequent is a weekday regularity in my life. There are about ten men (and one brave spouse occasionally -- this group meets too early for Mrs. S) who go there and have sat together consistently through the closure of one place and eventually chose Panera as their new home. We tend to linger there for about an hour. And we drink coffee, lots of coffee, and we have toast or bagels by and large. Some have only coffee.

I wonder whether Panera wishes to have our business. The sharp increase in coffee prices would indicate a desire to better ration seats in Panera (and their free wi-fi, which still nevertheless does not allow me to blog -- their service provider classifies Blogger as "web communications", which is not permitted to be used on the Panera wi-fi. Nobody can explain why.) But if they wanted to do that, why not simply charge for refills? And the maintenance and even price drop for a few food items may indicate they wish to be more restaurant and less coffee shop.

While on this topic, I note that my group is a bit demanding. When a coffee dispenser is empty, we get crabby, carry the empty over to the counter and await delivery of the new pot. They can sense our impatience. I wonder if this is another reason for Tim Harford's observation over the weekend (h/t: Mungowitz) that women are served more slowly than men at coffee shops. I suspect men are also more sensitive to price changes -- well, except for the women's group my late mother-in-law was in; now those people were cheap! -- and perhaps Panera wants to change the profile in that direction too. Women might by more of the higher-profit items from Panera than men, who again show up for a bagel and coffee and seldom eat the sweet pastries. And perhaps men just get served faster because we're more vocal about slack service.

I suspect the Panera gang might move, in which case your humble Mayor will write more in the morning.

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Tuesday, November 13, 2007

Nowhere to go but up 

A new study from the U.S. Treasury highlights income mobility for various groups. As economists have long known, income increases more for the poor than the rich. Many times, a snapshot of rich and poor ends up capturing people who are temporarily rich.
Percentage increases in real income were the largest for taxpayers with the lowest incomes in 1996. Among those taxpayers in the lowest income quintile in 1996, median income increased by 90 percent by 2005. Real incomes increased over the period for 82 percent of these low-income taxpayers and at least doubled for nearly half of this group (49.4 percent).

Among taxpayers in the highest income quintile in 1996, real income increased for over half and doubled for only 8.5 percent. The median real income of taxpayers in the top quintile in 1996 rose by 10 percent, while the median income of those in the top 1 percent in 1996 declined by 25.8 percent. While this study does not examine these results in detail, the likely causes include the typical life cycle of income and �mean reversion� in which the incomes of taxpayers whose incomes were temporarily high in 1996 revert to a level closer to their long-run average.

Among households in the middle income quintile in 1996, median income increased by 23.3 percent. Real income increased for about two-thirds of taxpayers in this group and at least doubled for 14.5 percent. The results reported ... demonstrate that over the 1996 to 2005 period, incomes rose for the majority of households, and that upward income mobility was the greatest among those that began the period in the lowest income groups.
The WSJ calls this growth stunning, but it's no more or less than usual. Arnold Kling cites another source highlighting differences in income growth for black and white households. The WSJ blog has some of this too, including this rather stunning finding.
For white families, 90% of children born to parents in the bottom 20% earned more by adulthood; for black families, it was 73%. In the middle quintile, commonly referred to as the middle class, 68% of white children grew up to earn more than their parents, but just 31% of black children did.
It's that last number that has me floored. Income is not the issue there; those families have income over $50k/yr. So what is it?

UPDATE: Could be the observation unit. George Borjas notes that the Isaac study looks at families rather than individuals.


Cars of the academic 

Via Greg Mankiw, an article on what cars Harvard professors drive. I am reminded of this conversation on EconTalk where Mike Munger tells of a meeting of Duke department chairs. Everyone has a Prius or other hybrid. Next to last comes up the chair of chemistry, who argues that hybrid cars may use more energy (though less fuel) than gas vehicles. (Here's one report explaining why that might be so.) The chemist is then asked what he drives. "Oh, I drive a Prius, but that's just because you have to if you're gonna be a faculty member."

At Harvard, one environmental studies professor drives a '96 Suburban, arguing that he reduced his carbon footprint at home. But eight of 18 economists who answered the survey said they owned luxury cars. Most popular across the campus? The Subaru Forester.

(h/t: Greg Mankiw, proud owner of a BMW 330xi)

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Wait! I know that voice! 

Even Littlest could identify the fine radio tones of Dan "The Ox" Ochsner on KNSI this morning as we hopped in the car to go to school. He apparently was on for the whole hour, and according to sources did not get a welcome back or any such thing on the air. He just sat down and talked like he was doing his old show again. The real purpose of his visit was to promote a chefs auction for the March of Dimes in town tonight. Currently he works in commercial real estate. His old producer Don Lyons has been handling most of the host duties since the departure of Andy Barnett, with Tony Garcia handling last Friday's show while Don traveled with Husky hockey.

I have not heard whether the station is searching outside for another host or choosing from its in-house personalities. So far, though, there's been no change in format and that's good news.


U of M conservative students unite! 

Collegians for a Constructive Tomorrow at the University of Minnesota are having Conservative Awareness Week this week. Today's events include a fair trade coffee sampling and a talk at 12:20 by Chip Mellor of the Institute for Justice on economic freedom. Tomorrow is Conservative Coming Out Day. If you're a student at the U, or anywhere nearby for that matter, be sure to check this event out.


Monday, November 12, 2007

Regarding the MOB and blogger behavior 

Gary Miller suggests that this MOB dust-up regarding a post on Anti-Strib (details of which you can find damn near everyplace else on the MOB, go find it yourself) is a "major test" for the office of the mayor. I wanted to review the rules of the organization before saying anything. This set is more than a year old, but I believe is applicable here. Rule 4 states:
Membership in the MOB is a privilege not a right. If you comport yourself in a manner that the MOB leadership deems inappropriate, your membership can be revoked at any times. All decisions in such areas are final and not subject to appeal no matter how arbitrary and capricious they may be.
I have stated that I have NARN as councilors in this matter, but all decisions regarding any membership revocation will be issued from this office and is the responsibility of the mayor alone. I will not pass responsibility on to others, and have arrived at this decision without counsel.

Having read the discussion on Mitch's blog and the attempt by Tracy to explain his views, as well as other posts in MOB, I am hereby ruling that Anti-Strib shall remain a member of the MOB.*

In the rules, as has been discussed throughout the MOBosphere, membership in the MOB requires very little. If you can read Brian's rule 3,
After a thorough vetting process, involving criminal background checks, retinal scans, and psychological screening, they will either confirm or deny your request.
...and not think the whole enterprise is more than a little tongue-in-cheek, you should check into Dr. Humor. My interview with Derek should have made this plain. And blogs that appear on the list get there through a pretty haphazard system, sprawling to now over 110 such blogs (some of which do not post and at least one whose owner is deceased.) Sad to say, there's probably 90 blogs on that list I haven't read in months, including Anti-Strib. For someone to try to attach the opinion of one one post on one blog to over a hundred others is a stretch worthy of Eyechart's best days at first base.

Satire, as a part of humor, is often used in politics. As Learned Foot states, sometimes it works well and sometimes it does not. Likewise, a good political rant can go badly awry sometimes, and other times it can produce a hell yeah! from the reader.

MOB has a tradition of rant-blogs, and though good political thought should (I agree, Pat) be held to a higher standard there is a place in the blogosphere as well for the well-sharpened stick in the eye. Not every blog is meant to persuade the undecided or engage debate. Context matters.

By the poster's own admission, there were points in the Anti-Strib article that were poorly worded and left impressions that he did not intend. That stick was not well-sharpened. We call that a teachable moment: The point where someone has done something they can regret and amend and learn from. As Flash points out,
To the point that I see a sincere effort on his part to amend himself. He could have just flew the might [sic] middle finger, in true AntiStrib fashion, but he didn�t. That says a lot to me, and those that know him.
I don't know Tracy outside of one visit to the Patriot studios as Michael mentioned. It would be a shame for that post to be the sum of what we know about him. While I don't think Tracy has amended himself -- only his post -- I take Flash's point as being the right one. Also, while we sometimes will have to chastise or bring to heel the occasional rant that goes too far -- and there will be more, humanity being imperfect -- there will only be a chilling effect if we do not tread lightly on one's speech.

Who one links to as a "daily read" is a personal decision, and whomever wishes not to display Anti-Strib as one has that right. But the MOBroll is not a choice of this blog or that. You may either display it all or none of it. Those MOB members who wish to take the MOBroll down because of its link to Anti-Strib or any other blog may be considered for violation of the privileges of membership, applying Rule 4 stated above.

It is so ordered.*

*Now, if you can't tell that some of this pomposity is also an attempt at humor, off to the Ministry of Silly Walks with you!

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Do We Really Need Government Healthcare? 

According to various mantras today, US citizens would be much better off if our current, state-of-the-art, available to all healthcare system were replaced with a government run, bureaucratic managed, single payer system. Arguments for centralized healthcare can be summarized in a statement that says Americans don't live as long as those in other industrialized countries.

As you can see by this chart, looking at the nations in the left hand column, the US lags behind a number of industrialized nations. However, when looking at life expectancy in the right hand column, the US has the longest life span.

Why is this? The right hand column corrects life expectancy data for differences in the rates of premature death from non-health-related injury, such as homicide and car accidents. These numbers came from reports analyzed by Greg Mankiw, a Harvard economics professor. A very reasonable conclusion is that our healthcare system is actually very good. There is always room for improvement but including data that is behavior in origin to draw conclusions on a healthcare system is not wise. Addressing obesity would also impact life expectancy. As Professor Mankiw indicates on his blog, we don't know the impact of the American's overweight problem.


Additional details in U. Delaware indoctrination case 

The Chronicle of Higher Education (subscriber link; temp link) writes a lament of the suspended diversity residence-life education program at the University of Delaware. Defending these programs as helping to "broaden students' cultural awareness and diminish negative perceptions of others", the program is an attempt to mimic classroom methods.
Residence-life officials there first discussed a "curricular approach" more than a decade ago. Ultimately they developed a detailed plan for promoting citizenship ("understanding how your thoughts, values, beliefs, and actions affect the people with whom you live") among some 7,000 dorm residents.

In a 2006 article in About Campus magazine, Kathleen G. Kerr and James Tweedy, Delaware's director and associate director of residence life, respectively, described their program's evolution. Previously, they wrote, though the university "knew motivating students to attend programming by providing pizza increased attendance, we did not know whether or how that programming affected learning."

And so they developed an educational framework that included 28 "competencies" for students (residents were asked to demonstrate the ability to "self-reflect" as freshmen, for example, and the "reciprocal nature of community" as juniors). Resident assistants used sequenced lesson plans as guides for group discussions and one-on-one meetings with students. Assessments of the program's effectiveness relied on students' own reflections, surveys, and interviews. "We find ourselves on an entirely new playing field," Ms. Kerr and Mr. Tweedy wrote of the program, "with fresh enthusiasm and fresh mistakes."

Some of those mistakes were big ones, according to several students and resident assistants who say they disliked the program long before FIRE's letter.

Bill Rivers, a sophomore, says the sessions delved too deeply into students' heads. In one session during his freshman year, a resident assistant read statements about abortion, gay marriage, and affirmative action. After each one, students were supposed to stand against one of two walls, under signs that said "Agree" or "Disagree." There was no middle ground.

The article notes that residential life programs believe "their job is to promote citizenship and tolerance." The question is that a classroom and a dorm room are different places on the average campus. You wouldn't be able to say that about a military academy, but those joining a public university might have some reasonable expectation of privacy in their out-of-classroom experiences. And if it is part of the educational experience, what is the plan for extending this educational mission to the student who is non-residential?

The article has the audacity to contend that schools that don't do this are cowards:
Politics aside, the uproar at Delaware is also a debate about comfort. In an era when colleges may view students as customers to keep happy, how many are willing to make their students uncomfortable in the name of learning, even for a few minutes?
If that's a legitimate argument, you've just argued for grade inflation everywhere. Teaching in general is asking someone to learn something that the student wants to do as little as possible. The goal is to persuade the student that what you have to teach is important; it is a poor economics professor who looks at his students and says "you need my class to get into your business major, so suffer through this you poor buggers."

If it is a part of the university's educational mission, such programs belong as part of the university's proper curriculum, and use trained educators rather than RAs who might be caught between their jobs and a hard place. Instructors might have more skill in differentiating, as FIRE president Greg Lukianoff puts it, "between institutional values and having people subscribe to particular political beliefs."

FIRE's catalog of information about Delaware is here.


Summarizing presidential views 

There are some nice summaries out of the views of the presidential candidates on a variety of economic issues.
  1. I've downloaded but haven't yet listened to the debate the National Association of Business Economists had with the advisers for five candidates. Unfortunately no advisers for Thompson or Romney were on the panel.
  2. John Goodman has summarized the health care platforms. He ends up liking the McCain plan better than the other two Republican plans; it's also the most radical, in simply giving a $5000 refundable tax credit (like EITC) to couples to buy their own health insurance while killing off the current system's subsidies. His opinion of the Democratic plans is much lower. Meanwhile, Steve Verdon reminds us that promises about paying for health insurance reform that begin with "repeal the Bush tax cuts" are trying to spend the same money twice.
  3. Ben Muse has been a one-man show writing views on international trade of the candidates (and others.) So far he has views from Romney, Clinton, and links to Simon Lester's thoughts on Edwards and Kucinich.
See also Muse's post on a poll on trade, in which we find that blue collar workers are more inclined to trade deals to protect jobs and white collar workers think innovation and new ideas are going to be the best source of new jobs.

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Please madam, may I have some more? 

Doc Palmer writes about 1930s-era quantity discount cards for brothels in Romania. You could not use the cards on weekends and holidays, and Doc wonders whether this is a form of price discrimination? Also, prepaid services are a form of lending to a business that is inherently risky; you can't turn to the police and ask for your card to be honored if the brothel is closed by the authorities.

I suspect something else is at play here, too. There is substantial value to the brothel from repeat business; the service that is sold puts the service provider at risk of physical harm. Once the madam establishes that the customer desires only the services contracted -- no funny stuff, nothing violent -- and that the customer is clean of communicable diseases, the cost of providing service is lower. The supply curve for the repeat customer is therefore greater than it would be to the stranger, and so the price is lower. If I am right, escort services may also have this type of pricing.

UPDATE: All of that put together doesn't do any harm to my proposition that the cards are more for loyalty, and that loyalty has particular value to a brothel over some other businesses.


What it costs to educate international students 

Dani Rodrik comments today:

"In the 2006-7 school year ... international students� net contribution to the United States economy was nearly $14.5 billion," reports the New York Times, citing a just-released study by the Institute of International Education. The IIE report itself states: "International students contribute approximately $14.5 billion dollars to the U.S. economy, through their expenditure on tuition and living expenses." Apparently, two-thirds of this spending is financed by students' own families and their home governments.

As anyone with a modicum of economics training should understand, this number represents a net contribution to the U.S. economy only in the absurd limiting case in which the opportunity cost of resources used in providing U.S. education services to foreign students is ZERO. I bet my Dean at Harvard--which is ranked #9 among top hosts of foreign students--can vouch that he pays me real money.

I've heard people in Minnesota say that we spend too much on educating international students here at SCSU and not enough on education for Minnesotans. I've thought about this, "does it cost us more to educate an international student than a Minnesotan?" Most schools, ours included, make a good bit of money selling English language courses to international students who don't speak English well enough when they come to our university to succeed in classes. (These are separate programs, which may or may not include students counting in our international student body.) Those of course use real resources, and it's appropriate to ask what are the opportunity costs.

As to what international students pay, here's their fee schedule, and here's the tuition and fee schedule for the university. Notice the line in the former marked "Academic & Cultural Sharing
Scholarship". This money goes to every international student regardless of the cultural sharing they will do, whether we already have 200 students from that culture, etc. The size of that scholarship is exactly equal to the difference between the non-resident and Minnesota tuition rates.

If it costs more to educate an international student than a Minnesotan, that becomes a net subsidy. Even if it does not, if an international student crowds out a domestic student, one can argue that we are subsidizing. Now SCSU does use as its current marketing logo "What's Your World?" So one can argue as well that we are subsidizing international students so that Minnesota students experience global exposure. But we admit 1000 international students to a campus with headcount under 17,000. When do diminishing returns set in? Is this a cost-effective way to provide Minnesotans with a global education?

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Sunday, November 11, 2007

American Foreign Policy in the Middle East 

This evening, The Jewish Policy Center, sponsored a form on Middle East issues at the Jewish Community Center in St. Louis Park. The moderator was radio host, Michael Medved. Panel participants were Cliff May (CM), Mona Charen (MC) and John Podhoretz (JP).

The program began with a few questions indicated below and then the session was open to questions from the audience. I've paraphrased and summarized for brevity.

Q-1 - Why don't Americans hear anything good coming out of Iraq?
A - MC: the Democratic leadership in the US is invested in defeat; see Joe Lieberman's US Senate speech on National Security here.
JP: Bush and company had a credibility problem after claiming success when it wasn't there; now it's different, we've got 5 months of success, the Iraqis are fighting with the Americans because Al Qaeda (AQI) performed their atrocities on Iraq Muslims who were "not Muslim enough" by murdering their children, forcing their women into marriages, and simply brutalizing Iraqis. The Iraqis had been told lies about Americans but discovered the opposite was true. General Petraeus' moving troops into Iraqi neighborhoods showed what our guys really are like. The Iraqis are pleased with the current situation.

Q-2 - Should Americans be concerned with terrorism? After all, we've not been struck again.
MC: Denial is not a river in Egypt. People don't like addressing unpleasant items. The Dems are concerned about world opinion and want to be like Europeans. Problem is the European "Kumbaya" approach is only possible b/c the US military protects them. If we copy the Europeans, Europe won't have the luxuries it has today, that of bashing the US b/c there won't be anyone to help them.
JP: Fighting terrorism will be important. If Clinton is the nominee, she will move to the right of the netroots. The basic question voters must decide is whether or not the Dem presidential nominee will be tough enough and will the Rep nominee be too tough? Who can best be trusted with the security of the US and free world?

Q-3 - What about Iran? Wait or attack.
JP: Iran is the biggest threat since the fall of the Berlin Wall.
CM: Today 75% of US casualties are done by Iran, either directly with Iranians crossing the border or with Iranian weapons. Three options available: 1 - Diplomatic - won't work; we've been trying for 30 years; 2 - Sanctions - can work but require cooperation of Europeans, Russians, and Chinese, hence low odds; 3 - Military - we should at least take out those factories making equipment used against our guys.
JP: If diplomacy is used, it must be backed with action when necessary

Q-4 - Iran comments. UN President actually said that Hezbollah (Supplied and trained by Iran) now has more arms in Lebanon than last year. Why? Israel lost so Hezbollah rebuilt its Lebanese Army and there will be another war there, this time, worse. The current Israeli government is too eager to make concessions. (My comment: appeasement doesn't work.) In addition, Iran has armed the Palestinians in Gaza.

Q-5 - Why do Jews in the US vote overwhelmingly Democratic?
MC: The least tolerant Jews are those who do not practice their religion and do not like Christians.
CH - In the 20th century, Germany and other European nations wanted to rid Europe of Jews; in the 21st century, the Middle East wants to get rid of the Jews.
MM: In the last presidential election, two subsets of Jewish voters, voted Republican: Russian Jewish immigrants and orthodox Jews. Many American Jews define themselves as not Christian. Because of this mindset, at an emotional level it becomes very difficult for them to consider any kind of association with religious people, particularly Christians. Because most religious people vote Republican, this is an emotional hurdle many Jews do not make.

Note: Mona Charen, John Podhoretz, and Michael Medved are all Jewish.

Some questions from the floor overlapped with the above questions. One person asked the standard "what about oil" question to which all replied, "Ridiculous." "If it were all about oil, we could have dropped sanctions against Saddam and gotten all the oil we wanted." "It's utter nonsense that we went to Iraq to steal oil from the Iraqi people."

A second version of why Jews vote with Democrats was responded with: "What planet are they living on? They get more concerned about a Christian when Muslims have said they want Israel and all Jews destroyed."

Overall, an informative evening. The room was full, at least 400 people. All were respectful and attentive. Attending forums like this help one gain perspective on world issues as well as exposure to those who write about these issues.

Saturday, November 10, 2007

Veterans Day, November 11 

In honor of Veterans Day, the following is a very good reminder of why we are free:

Veteran's Day
It is the veteran, not the preacher, who has given you freedom of religion.
It is the veteran, not the reporter, who has given you freedom of the press.
It is the veteran, not the poet, who has given you freedom of speech.
It is the veteran, not the protester, who has given you freedom to assemble.
It is the veteran, not the lawyer, who has given you the right to a fair trial.
It is the veteran, not the politician, who has given you the right to vote.
It is the veteran, who salutes the Flag, who serves under the Flag, whose coffin is draped by the Flag.

God bless our Veterans!

One can substitute "soldier" for "veteran" but the basic fact remains: Without our incredibly strong and integrity driven military, we would have none of these freedoms. Look around the planet, freedom exists where the American military is there protecting these freedoms. Too often we take our freedoms for granted. Today, and any time you cam, thank a soldier or veteran. You'll be glad you did. They are terrific yet humble people.

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First interview with your new Mayor 

I sat down with Derek Brigham of Freedom Dogs and True North for an interview. I'm a little concerned about the line "not a hard to follow academic windbag � well, most of the time anyway." I think I'm easy to follow.

We will begin a new category today: Mayor Directives. These should be viewed as official communications from this office. They will also be adorned with the seal.


As promised 

The Littlest Scholar has delivered a feeding of Chief of Staff Buttercup. Debbie, we always keep our promises here at the Mayor's mansion.

Friday, November 09, 2007

Let's put this question to Sen. Clark 

Gary links to a Tarryl Clark press release that argues for a state fix to the property tax so that the state can provide funding for education. I'm going to very selectively quote this, so be sure to go read the whole release -- you are invited to quarrel with the interpretation I am about to give by arguing these are out of context. I think not.
�Property taxpayers are overburdened with requests to cover the gaps created by Gov. Tim Pawlenty,� said Clark. �Those gaps are the result of policies that shift more and more of the cost of government from wealthy people to the middle class.�
We've had the argument already (see, for example, here) whether we have enough progressivity in the income tax. Clark has made this point before. And she makes it again and again in this press release:
�Property taxpayers are at their limit. They support public education � but it�s increasingly difficult to pay for schools through a tax that isn�t based on the ability to pay. It�s time for Gov. Pawlenty to end the march to mediocrity and properly fund our schools through a fairer system of taxation.�
In three separate places then, in a 255-word press release, she brings up the fairness issue (the italicized pieces.) She then points to wording in the Minnesota Constitution that she says isn't being met.
�Nearly 100 school districts asking taxpayers to make up for state government�s neglect is proof that isn�t happening. In years past, school funding was there, and referenda questions dealt with construction of new buildings and enhancements. Now they�re asking for enough money just to hang on.�
Now, people who understand school finance (which is a Byzantine structure here in MN) would point out that the state bribes school districts to pass these operating levies. You have to impose a levy of a certain type -- often imposed by the school board without a referendum -- in order to get matching money from the state. (I rely on this booklet from the Center for Public Finance Research for much of this.) The share of school financing that comes from the state aid is quite large, in 2004-05 coming up to 82% of state plus local. Interestingly, the report notes that in the 1930s, the share of public education paid by the state was around 30%. As I recall, the Minnesota Constitution pre-dates 1930.

But be that as it may, let's suppose Senator Clark is right that schools need this money. Again, refer to the fact that three times she mentions fairness or tax cuts for the wealthy. Here's the question we should put to her: Suppose I could design for you a plan that gets more money to public education that was distribution-neutral. Would you support it? I'm encouraging any challenger for state House next year to put this question to an incumbent. Why? In another context, health care, Greg Mankiw points out the same thing. You'll see that I've simply replaced the words "health care" with the words "public education". You decide if it works.
Observing dissatisfaction with the U.S. healthcare public education system, they [pundits of the left and Democratic leaders] are using reform as a Trojan Horse to push for more redistribution of income. Almost all sweeping health public education reform proposals involve higher taxes on the rich to provide benefits for those farther down the economic ladder. The redistribution, rather than health reform, is sometimes the main objective.

To judge whether my conjecture is correct, ask your favorite pundit of the left the following: What health public education reform would you favor if the reform were required to be distribution-neutral? That is, you can change the rules of the health public education system but you cannot change the distribution of economic resources between rich and poor. My guess is that your favorite pundit would either object to the question or answer by retreating to more modest reforms. If so, this suggests that calls for sweeping reform are mainly motivated by the desire for increased redistribution.
Children are used, once again, as a stalking horse for a desire to take from Peter to give to Paul. It should be apparent that Clark fears that the support of Paul will not be enough to keep her party in power.

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Veterans Day Weekend 

November 11 is Veterans Day, a day we set aside to honor our veterans, active, retired and those who are no longer with us.

One project where we can all participate is this phone-a-thon, designed to raise funds for VFW's unmet needs program. More can be read at this website: You can donate through this website or via phone at 866-437-9283.

This weekend, be sure to thank a vet. Buy the vet coffee, pick up their meal tab (all you have to do is tell the server to give you the soldier's bill - they will accommodate), pay any bill. We owe them a tremendous "thank you" for keeping our country free. Donating via the phone-a-thon and/or taking the time to appreciate their service is the least we can do.

Some Details from that Nov. 2007 Report on Homeless MN Vets 

Here are some exact quotations from the Wilder Foundation Report I discussed early today in MN Veterans Are NOT at Increased Risk for Homelessness.
"The profile presented here suggests that homelessness in Minnesota is as likely to touch veterans as any other state residents." (p. 1)

"Veterans make up 13 percent of all homeless adults and 24 percent of all homeless men. These proportions are very similar to the proportion of veterans found in the general adult population. In 2006, military veterans made up slightly less than 11 percent of all adults in Minnesota, and 21 percent of adult men in Minnesota." (p. 2)

""When looking at the total adult population experiencing homelessness, the percent who were U.S. military veterans decreased from 22 percent in 1991 to 13 percent in 2006. As a percentage of men experiencing homelessness, the percentage also declined, (34% in 1991 and 24% in 2006)." (p. 2)
My earlier post highlighted the fact that the number of homeless veterans has gone down by more than 10% since 2003. Here's how that important fact got relegated to an afterthought in the newpaper stories. Once again, these are exact quotations from the Wilder Foundation Report.
This study gives a snapshot of U.S. military veterans experiencing homelessness in Minnesota on a single day in 2006. (p. 2)

And while the total number of homeless veterans is down compared to Wilder�s last two studies, the level of distress in this population is up. One recent report by the Iraq Veteran Project indicates that veterans returning from Iraq and Afghanistan are not only at significant risk for homelessness but are actually more likely to become homeless sooner than their predecessors following the Vietnam War. (p. 1)
Observe the shift from a factual snapshot to the use of minimizing language based on speculation about the future.

The Wilder Foundation gives no citation or link to the "recent report by the Iraq Veteran Project" on which it relies so heavily. So what is the Iraq Veteran Project? The website of Swords to Plowshares, a San Francisco advocacy group, includes among its employees "Amy Fairweather, Iraq Veteran Project." The first of the "Honorary Co-Chairs" of their annual Veteran's Day fundraiser last night was none other than that staunch supporter (sarcasm) of the use of military force, "Speaker Nancy Pelosi."

More to come as I have time...

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Innovative Minnesota as Destination Minnesota 

I read something Charlie Quimby wrote, in reaction to the StarTribune's editorial on economic stagnation in Minnesota. (I am going to say something that seems to bother my more conservative political friends -- there is little doubt the data supports stagnation. See our last QBR for more. If you disagree with the premise, there's another post, one I may write for Monday.)

The STrib posits three possible reasons and dismisses two of them:
  1. Housing. The STrib cites Steve Hine as noting the decline precedes the housing slump, without giving us a date. Locally, we called a slump in housing by late 2005 after a rather sharp rise in housing starts in mid 2004. You can look at the data, and in my view the data supports some contribution from housing. But is there a longer-run issue? I think so, leading to...
  2. Demographics. The STrib wonders whether the job growth slowdown precedes or comes after the slowdown in growth in population in Minnesota. Hold that thought, but let's note at least that much of the influx of workers from elsewhere in the Midwest came much earlier. Take a look at this chartbook from the State Demographer's office for population growth in outstate and the Met Council forecasts for the Cities, for example. When you have lower fertility rates, and a lack of people to move here from the Dakotas, you haven't much of an opportunity.
  3. Secular decline. Perhaps, the STrib wonders, it's just our turn to grow slower than the rest of the economy. There's some truth to that. The state economy has a larger share of employment in manufacturing than the 10% in the US economy overall (and St. Cloud has about 18% employment in manufacturing, much more than even the state). The good news of that is the weak dollar, if anything, is probably good for MN. But in the long run the cost advantages to emerging market economies over Minnesota will keep pressure on those firms. That's a recipe for a secular decline in the state economy as workers move from those firms to other industries.
What can save that? Charlie focuses, I think correctly, on innovation -- and wonders whether more government spending can help promote innovation via, for example, R&D from public research universities like the U. I noted in his comments a new study from the Kauffman Foundation that MN is third in international patents.

Charlie's concern is the messaging from a more conservative, laissez faire, laissez passer world.
Minnesota has begun to starve its talent and lose some of its optimism. The no-new-taxes attitude doesn't just affect government services and hamstring education. It sets a tone in the culture that is anti-knowledge, anti-creativity and anti-risk.

It says, focus on the basics, look to the past, and take care of yourself first. Those aren't necessarily bad things, unless they make up an entire world view that determines how a society will deal with a very dynamic present and uncertain future.

Yet as Tyler Cowen argues, that misses that for some, that ability to do your own thing leads to great work:
American labor markets are flexible enough to create a large number of jobs at the lower end of the wage scale. Teenagers are more likely to acquire work experience, and they are more likely to earn a small amount of capital for financing a start-up enterprise.

It is a common American dream to want to start one�s own business, and this cultural influence spreads to the young. It sometimes replaces school and family as a driving force. Ben, in an e-mail message, cited the openness of American culture. �If starting a business wasn�t �cool,� � he wrote, �I doubt very many teens would partake.�

...It is well known that American companies have been the most successful at turning information technology into productivity advantages. In part, this is because of American success in mobilizing young talent.
A lower tax rate system creates that kind of innovation, the kind of innovation that might or might not lead to patents, but can lead to learning the value of hard work and creativity by rewarding it and making it cool. Can Minnesota gain back its edge by being a cool place to be an entrepreneur? And if so, how? Maybe by letting immigrants become taxi drivers or hair stylists?

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When pork meets green 

I was at a meeting in Benton County Wednesday and much talk occurred around the idea that the county commissioners, after many years of supporting Northstar, had decided to pull the plug on paying for the Northstar Corridor, which was planned to extend to the county town of Rice north of St. Cloud.

On Tuesday, commissioners Wollak, McMahon and Duane Walter voted for the withdrawal, while Earl "Butch" Bukowski and Dick Soyka voted against it.

Benton County has spent more than $500,000 in the last 10 years on Northstar with "nothing to show for it," Wollak said. "When is enough, enough?" Wollak asked. The county should be addressing larger problems, he said, such as the need for road improvements and building space.

Wollak said many people are surprised to learn that there won't be trains running up and down the line all day, but only in the morning and evening. He noted that the feasibility study predicted that there would be just 20-30 riders getting on the train at Rice by 2030.

"The ridership forecast has not changed in 10 years," he said.

Now I've looked at demographic data for the area for some time, and Benton has perhaps the fastest growth of any place in the area, a relatively small county sitting in a growth beltway around the Twin Cities. But that growth might not be sufficient for Rice. Most of the people living in northern Benton County (as well as Morrison County to the north of Benton) come to work in St. Cloud, and would not likely take the train for that 13-mile commute.

But as Peter Gordon notes, getting riders off the roads and into buses and trains is always the goal of public transportation advocates.
[Last Saturday] morning's LA Times includes the latest installment of the "subway to the sea" discussion about extending the Red Line west to the beach (but not yet beyond). The existing Red Line is about 16-miles of guideway that cost $4.7 billion to build, serves just 115,000 riders per day and costs $78 million a year to operate (the last time I looked). I have reported many times that this amounts to a $323 million/year loss -- which shrinks to $286 million/year if the most optimistic non-rider benefit assumptions (reduced auto use) are added.

These details are never addressed in the discussion of whether to spend another $6 billion on the 6-7 mile extension. The Times' coverage does mention that current daily bus boardings along the route are 64,300 (or 34,900, depending on the alignment chosen). It also mentions that costs on the currently-under-construction "Expo" light-rail line are running 23% above budget.

When pork meets green, anything goes.
Including bike bridges.

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MN Veterans Are NOT at Increased Risk for Homelessness 

Homelessness is an emotional issue that properly tugs at our heartstrings. We are also grateful to everyone who has served us in the military. However, our natural and justifiable emotional impulses on these issues are being exploited for purposes of leftist and anti-war propaganda.

If you were looking for news about homeless Minnesota adults who had served in the military, one might think that the following facts would be important:
A veteran is no more likely to become homeless than any other Minnesota resident.

The number of homeless veterans has gone down by more than 10% since 2003.

The percentage of veterans among homeless adults is the lowest ever.
That�s not what Minnesota newspaper readers are being told, however. This story from the Rochester Post-Bulletin is typical of the reporting:
A new study shows that about one-third of homeless military veterans in Minnesota have served in combat.

The Wilder Research Center's new report also shows high levels of post-traumatic stress disorder among veterans returning from Iraq and Afghanistan.

Study director Greg Owen says there's a higher incidence of the disorder among veterans from Iraq and Afghanistan than among homeless veterans overall.

He says untreated post-traumatic stress can lead to homelessness.

The center says about 625 military veterans are homeless in Minnesota on any given night. That's down from about 700 in 2003.
The decline in the number of homeless veterans is buried in the final sentence. None of the other important facts about veterans are mentioned.

Oh, and what about those veterans from Iraq and Afghanistan? The 50-page report from the Wilder Foundation actually says that among the estimated total of 4,731 homeless adults, only 17 had recently returned from Iraq or Afghanistan. That�s about 1/3 of 1%.

All of the other facts cited in bold above also come directly from the Wilder report itself.

I plan to post more on how this �story� emanates from a coordinated propaganda effort by leftist advocacy groups and anti-war activists.

Thursday, November 08, 2007

He has learned well 

There are times where something you say lays a seed that you get to watch grow. One time in a conversation with Gary Gross, I talked about zero-based budgeting. On the phone later he expressed how much he liked the term and wanted to learn more about it. A little education followed.

In the wake of several failed school levies, the newspapers have already started to get letters about where to go next (beyond the usual "back to the voters next year" answer. That's to be expected.) A Write Now in the local paper -- almost offering the Times as a blog for letter writers -- argues that schools have too many administrators. The comments after quickly filled, including this from former mayor John Ellenbecker.
Could we please have the specifics of which administrators are excess? If they can be identified specificly then we could have a legitimate discussion on the merits of that position.
Gary quickly replied,
That's the wrong question, John. The question should be "which administrators are necessary"?
Bingo: Zero based budgeting.

Now certainly you can dig up statistics suggesting bloat. Mark J. Perry argues that private schools have much lower costs than public and thus must have excess administrators (as well as higher class sizes, without any appreciable difference in test performances.) Now certainly mandated higher spending for special education is one distortion in that calculation, but can it explain all that difference? The only way to answer that is to ask for a proper accounting. (Kudos to the Times editorial board this AM for its understanding of that point.) Allocate teachers and administrators from zero so that a dollar spent anywhere gets the same additional amount of improvement in student learning, and you will have budgeted well. Then, if you want to receive more, tell us the amount of additional learning received on the investment. If all you talk about is cost and not about the benefits that parents and non-parents alike care about, levy votes will continue to be difficult.

When the staff/student ratio rises faster than the teacher/student ratio, as Prof. Perry also shows, you have some explaining to do, and some reason for me to wonder why a failed levy will lead to larger class sizes. Why do schools need to increase instructional staff at a faster rate than that at which it increases its teachers?


See Spot. See Spot Deduct. Deduct, Spot, Deduct! 

If you can qualify for a tax deduction for relocation expenses to move to a new part of the country, you can deduct the costs of moving your pets. Believe it or not, I knew this, because when I went to work in Ukraine some years ago, I asked if I could include the costs of moving Buttercup's predecessor, Betty. In that case, the answer was 'no', since I was not moving permanently to Kyiv. Had I announced I was moving permanently, I could have deducted her move, but then none of my living expenses in Kyiv. Weird, isn't that!

There are millions of these complications in the tax code. Apparently some people think these should only be taken by liberals. Which means that conservatives will pay more for the government they want to make smaller, and liberals will pay less for the government they want to make bigger.


Death by committee 

House Republican leader Marty Seifert sent out a press release that reflects on the continuing growth of committees and subcommittees in this legislative session.

"There seems to be a lot of repetition without reason. We question the necessity of having so many subgroups working on legislation that a standing committee should be able to accomplish on its own and the great number of meetings being held at taxpayer expense to hear about the problems but not bring forward solutions," Seifert said. "The Democrats have turned a part-time citizen legislature into a full-time job."

Seifert said at a time when schools and nursing homes are struggling to make their budgets, House Democrats chose to almost double its operations budget from $324,000 to $646,000 during a House Rules Committee meeting in August.

"We gave schools a mere 3 percent increase for the biennium and nursing homes received even less than that but then gave gigantic increases to the Legislature," Seifert said. "This is a matter of priorities. The Democrats ran on fiscal responsibility and leadership. They have failed to demonstrate either during their reign of confusion in the Minnesota House. When House Republicans are in charge, we will restore fiscal sanity by cutting the number of committees by more than 50 percent and returning costs to prior levels."

The $646,000 added money to every committee except one: the Ethics Committee. Fancy that. The 2005-06 Legislature spent less than $15,000 of the $323,000 it had budgeted.

Here's a .pdf created by Rep. Seifert's office of the various committees now in play in the state legislature. Now with 50% more arrows, and 99% more budget! And the DFL is spending it, having 17 committee meetings this week alone.

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Dumb health assessment questions 

As part of my enrollment in benefits for SCSU I was given the opportunity to fill out a health assessment through my employer, the state. There's a bribe for this -- I get a lower co-pay for office visits if I fill this out and receive a phone call from a health counselor. I evaluated the costs and benefits before I decided to proceed.

The questions are quite personal, to be expected, and included questions about whether I smoke or ever have. I'll reveal those answers to you: I smoked cigarettes in my twenties and then quit when I bought a bicycle and found I couldn't breathe after six miles. Ten years later I took up a pipe for a year but hated the fussiness. For the last ten, I've enjoyed 2-3 cigars a week on average (more in summer, less in winter, as I smoke outdoors.) All of this was in the assessment, and I do not mind those questions, given I was agreeing to this in return for a payment.

Then came these three questions:
Are you exposed to secondhand tobacco smoke more than once a week for 30 minutes or longer?
( )Yes
( )No

During the past 7 days, how many days did anyone smoke cigarettes, cigars, or pipes anywhere inside your home?
[ ] Days

In the past 7 days, has anyone smoked near you in your work area, a bar, or restaurant?
( )Yes
( )No
The first question is of dubious concern; is there any reason to believe that being some place for 30 minutes where someone else smoked is a risk for my health? Long run exposure perhaps, but thirty minutes? Do the other questions are even more bizarre. Remember, someone is going to call and counsel me on health as a result of my responses; do they intend to tell me to stay away from smokers? Throw them out of my house? Or do they intend to scandalize being present around smokers?

And of course in Minnesota, the last question asks whether I have witnessed an illegal activity. Again, the state is asking me to answer this question for a lower co-pay on my health insurance (yes, I know, the state health plan I am in is part of Blue Cross -- I'm not satisfied that the state has no access to these questions.) Am I to be recruited as part of the smoking Stasi?

Neither I nor anyone else is allowed to smoke in my home, but that's my business. It is not because I worry for my health but for aesthetic reasons (I've had roommates who smoked cigarettes in the bathroom with the fan on, leaving very ugly yellow residue on the bathroom ceiling.) I am concerned that health officials and health professionals are now trying to recruit private individuals to be part of the smoking police. Have any readers experienced similar questions? Let me know in comments.


Wednesday, November 07, 2007

The saga continues 

Andy Barnett is scheduled to appear on Glenn Beck on CNN tonight to discuss the KNSI case. Publicity is good, but how much good does all this publicity do for his future in talk radio?


Behold the power of dog 

We are enjoying an early lead in the runoff for Mayor of the MOB. The power of dog has been upon us, and no sense breaking this streak. Debbie writes in comments: "I don't give a hoot who is mayor of whatever this organizaion is, but the posts of Buttercup won me over. " Buttercup humbly beseeches your vote.

"In your paw, you know she's right."

UPDATE: Victory!!!

It is a long and distinguished line of mayors before me, and I hope to be able to carry on their examples. Congratulations to Atomizer on a well-fought campaign; as a Twins fan I'm sure he'll appreciate the specialness of making the playoffs. On behalf of Buttercup and the entire Scholar family, thank you for your support. A full Buttercup pictorial will be forthcoming shortly, as soon as Littlest assembles it. A new and improved, multi-city MOB Road Show will be forthcoming.

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Local levies fail 

Someone said to me, who voted in South St. Cloud last night, "I knew the levies were going to fail when I was easily the youngest voter in the polling place." He's in his forties.

Maybe that was it, but the failure of the levies in St. Cloud and Sauk Rapids-Rice are also to do with some other events. I was watching the City of St. Cloud returns come in, and in the city the first levy -- to renew an expiring levy and extend another -- was ahead by about 300 votes out of over 7000 cast. But the votes in Waite Park and St. Augusta came in very negative late in the evening and turned the tide.

The Sauk Rapids-Rice vote was a little more expected. The district had not asked for money for years, but some campaigning against the levy seemed to be helpful, and the late announcement that teacher contracts were waiting to see what happened with the vote could not have been helpful.

Meanwhile, there were a few interesting St. Cloud city council elections. Experience won out in Ward 1, where Dave Masters defeated Garner Moffatt. Moffatt's friends on this campus put up illegal signs in school hallways (our young DFLers can't seem to understand this part of the law), but there was little campus turnout. In Ward 3, John Libert won handily over Karen Langsjoen. People will wonder if this was the result of the debate last Friday -- I don't know if it made a difference or not, and we never will. In Ward 4, two long-time popular incumbents squared off in our new boundaries, and Bob Johnson defeated Mike Landy -- really, the only defeat of a conservative in the election. And Sonja Berg lost the at-large seat to John Pederson. If I was Dave Kleis, I think I'd be pretty happy this morning.

Gary has more.

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Tuesday, November 06, 2007

He was fun 

I do recall Wog making an appearance in St. Cloud, I believe courtesy of Mitch, who reports his death at age 51. Greatly funny guy, but also greatly tragic, as this post from his blog made clear to me:
If things play out the way I wish they wouldn't, this blog will go quiet. The silence will tell volumes.
Not nearly so much as a life well lived, as Mitch tells it.

There's a poem I heard once that starts, "Do not stand at my grave and weep/I am not there, I do not sleep." Don't know who wrote it (Google takes me to places that say author unknown) but from the few times I met Wog I think that would have described his feelings about the event of death.

Vote for me because Blogger is treating me poorly again 

If you can read this, it will be a minor miracle. Reason enough to vote me to Mayor. Meanwhile, I may finally have to find another blogging software. Blogger has become very unreliable.

UPDATE: Blogger finally acknowledges a problem, and now we're told there's a scheduled outage at 11pm PST. Maybe that will fix it. I'll post tonight if possible.

Monday, November 05, 2007

Gisele Gekko 

Apparently supermodel and Tom Brady paramour Gisele Bundchen is a currency speculator.

Like billionaire investors Warren Buffett and Bill Gross, the Brazilian supermodel, who Forbes magazine says earns more than anyone in her industry, is at the top of a growing list of rich people who have concluded that the currency can only depreciate because Americans led by President George W. Bush are living beyond their means.

The BBC explains what Powerline says Bloomberg did not:

Gisele B�ndchen is said to be keen to avoid the US currency because of uncertainty over its strength.

...Last week the dollar hit long-term lows against the euro, the British pound and the Canadian dollar.

From a few weeks ago, read this post by Menzie Chinn, you see others are also not investing. When a supermodel chooses to throw in with Buffett and Jim Rogers, I'd not argue she's engaging in America-hating.


Murkier talk 

Responding to the criticism that has arisen about the Andy Barnett case, KNSI has posted "the COMPLETE, un-altered interview of two St. Cloud City Council Candidates from Friday, November 2nd 2007." It's a 20 MB file (compression would be nice, guys -- many of us do hour-long podcasts in smaller files), so proceed accordingly.

Andy is posting his story. Speed Gibson comments:
My heart goes out to Andy Barnett, but from what I've read and heard, including Barnett's own account, my head is with the station management on this one. Regardless, the worst behavior by far was that of the complaining candidate(s). I again ask, why are liberals so convinced they're right yet are so uncomfortable defending them in public?

Getting back to KNSI, abortion and same-sex marriage just aren't local issues. Barnett gave a couple of weak examples showing how they could relate to other local issues, but this just isn't good enough. Frankly, I think the intent was there to embarrass the candidates. If Barnett was adamant with management as I think I heard him say he was, then yes, he'd be gone at my station, too.
As I updated in the earlier post on this topic (not sure when it got up on this site, but I had tried to post this without success when our wireless modem went down yesterday), we have to be careful about besmirching the candidate -- as you will hear in the interview, she's adamant about her disapproval of the questions on-air, but that is the only evidence of disapproval we have. Leo has updated his post which started the ball rolling in the blogosphere saying that the station manager, John Sowada, has written to another blogger stating he did not speak to the candidate after the interview, and that in his conversation with Barnett earlier tonight Barnett said he did not see the two speaking, that "several people at Leighton told me." That's consistent with what I've found; it was not my understanding when I spoke with Andy Friday, but that came out in the interview Saturday (podcast now available -- interview begins about 12 minutes in) and confirmed by other discussions.

The part that one has difficulty with is how one goes from on-air debate to fired in four hours; given that Sowada made this decision without speaking with the candidate, one can conclude one of two things -- either it's an overreaction to an uncomfortable interview (to him as well as to the candidate), or there's more here that we do not know. Answer c: Answers a and b are correct, is permitted.

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Economics is quicker than politics? 

Former Treasury undersecretary John Taylor pretends to give testimony at the Iraq hearings. I like the last paragraph best:
You have heard much about the need to secure an area before significant political progress can be made; the same is true for economic progress. But economics is quicker than politics. We should move in economically even before our teams start helping on political reconciliation. If the environment is secure, entrepreneurs -- both Shiite and Sunni -- can create jobs much more quickly than politicos can reach agreement, let alone pass legislation. Job creation, the economic integration of communities and the taste of prosperity will accelerate political reconciliation and the achievement of our ultimate objective in Iraq.
Is it really that easy, though? While I believe that economic order is largely spontaneous, I'm not sure it's fast. Many of us who studied transition of the successor states to the USSR puzzled over this for years, and I don't believe we have an answer yet.

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The moment is at hand 

We can now vote in the finals of professional economist versus professional ... whatever for mayor of the MOB. Voting from home and from office is permitted -- it appears to be even encouraged -- as is voting daily. Elections are now through Wednesday.

We again thank our supporters, both left and right, for helping the Many Vowel Party (the MVP) reach this point in the campaign, and we know you can put us over the top with one (well, actually, six) more votes. We are getting Buttercup her own laptop:

"Proud member of Bostons for Banaiaiaiaiaiaiaian!"

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Credit where credit is due 

Minnesota Senator Amy Klobuchar has discovered a new place to engage in class warfare: The new farm bill. Arguing that the 75-year-old plan is still has strong arguments for support, the only thing she can find wrong is that it gives money to people who do not need it.

Nearly 600 residents of New York City, 559 residents of Washington, D.C., and even 21 residents of Beverly Hills 90210 received federal farm checks in the past three years. Some collected hundreds of thousands of dollars.

Last time I checked, there wasn't a lot of farmland in those communities.

We can fix this and do better for our farmers by using the new Farm Bill to close loopholes, tighten payment limits and enforce tougher income eligibility standards.

First, the current Senate and House Farm Bill proposals eliminate the "three-entity rule." This will end the practice of dividing farms into multiple corporations to multiply payments.

Second, a long-standing bill proposed by Sens. Byron Dorgan and Charles Grassley would limit annual payments to $250,000.

Third, nonfarmer millionaires should be precluded from receiving payments.

Let's understand something about economics here. Farming, like most economic activity, requires four factors of production: land; labor; capital; and entrepreneurship. The entrepreneur puts his or her own resources at risk of loss in return for the opportunity for profit. If you wish to support farmers, then whomsoever accepts that risk receives the benefit, be it a rich or poor person. There are already rules in place to guarantee that the person actually have something at risk (whether or not they are an active or passive investor.) If they have these rules in place, why does it matter if the person who is at risk is rich or poor?

Sen. Klobuchar worries that subsidy payments to rich farmland investors will "undermine public support for every farm program." If the reasons for supporting farmers are sound, I fail to see why, unless the Democrats fear their class warfare message will spill over into their own constituencies. Selling the "riskiness" story is difficult, because there are plenty of riskier investments than farming (remember those Internet stocks you owned seven years ago?) And a majority of farmers do not get any subsidies; the chicken farm you smelled going out to hunt deer this weekend did not receive a subsidy for its operations.

So why are some farmers aided and others not? Could the reasons be political rather than economic? It will be interesteing to follow the debate on the new farm bill that opens today.

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Saturday, November 03, 2007

Did KNSI just change format under duress? 

By now everyone in St. Cloud has heard about the events at News Talk 1450 KNSI yesterday. I've written and spoken to some people at the station and elsewhere. The facts in Larry Schumacher's Times article are essentially correct. What I think is missing is context.

Let's review the pressure the station has been under:
Let's then summarize this as follows:
  1. Barnett inherited a show from Dan Ochsner, and the show was singular in the KNSI format.
  2. The station runs syndicated conservative talk (e.g., Limbaugh, Soucheray, Savage) the rest of its weekday. It has a weekly show by the local mayor, former Republican state Senator Dave Kleis, as well as current Republican state Representative Steve Gottwalt. The KGOP tag isn't exactly wrong.
  3. Nevertheless, it does not appear the station was happy with the format.
  4. The station was pressured by local DFL and appears to have been stung by the Times' criticism.
  5. It fired Barnett within four hours of the disputed interview, between which times it had received a complaint from a city council candidate, canceled a debate, pulled Barnett from the air, and then waited two hours to make its move. This would seem to imply that the CEO, Bob Leighton, was at least informed and approved of this event, though nobody at the station will speak on the record. At least one member of the family that owns the business was in the station Friday morning.
One is compelled then to ask, did KNSI change its format under duress? What are its intentions to its listeners (of which I am one)?

This should not be construed that I think the station had no right to fire Barnett. It can do what it wants as long as it's not agreed to not censor Barnett through its contract with him; I agree with most that I do not think I would have fired someone for asking those questions (you can hear what was said by listening to this audio on Andy's site and decide for yourself.) It is quite possible that the decision to let Barnett go was made a while ago. But if you expect to be a news talk radio station that has credibility, appearing to cave in to pressure from the DFL and competing media outlets is counterproductive.

I hope the station has a plan to maintain itself as the news talk station that has served the city well as balancing its media ideological spectrum for the last several years.

UPDATE (11/5): Based on additional conversations at the station, I want to clarify that when I said "it had received a complaint from a city council candidate", I do not necessarily mean that the city council candidate ever went to the manager's office or even spoke to him. The only person who says she did was not a witness but says "others tell me." Meanwhile, the candidate and one other person says they saw her leave after a discussion outside the studio. More than this we cannot say with any confidence. I will emphasize again that Barnett's firing may involve more than this one incident but outsiders will be left with that impression, much to the detriment of the station.

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Friday, November 02, 2007

Why we remain unimpressed 

Non-economists seem to be pretty displeased with economists and the media who continue to argue that the economy is heading for the shoals. In a couple of posts, my good friend Captain Ed wonders why we're pessimistic in general in America and thinks it has to do with the media coverage. John Hinderaker points out that the New York Times changed their lede on the employment report this morning, expecting bad news. You can't really fault them for that -- the consensus of forecasters (according to Bloomberg this AM) was for 80,000 jobs rather than the 166,000 reported. Believe me, most of us who look at this stuff for a living were surprised. Investors Business Daily opines, meanwhile, that all of the negative press has created cognitive dissonance in voters and consumers.

Some of us -- and at risk of annoying my fellow NARNians Ed and John, I am in this camp -- remain unimpressed by this number, the GDP report from Wednesday, or much else. I could make this a long post, but it's late and I'm in need of dinner and an evening walk with Littlest.
  1. If you are saying that consumer confidence is being harmed by the news, I don't really think the sentiment measures bear that out. The Conference Board index has shown a decline the last few months, but we haven't reached the two-year lows. Given what's happened in housing, the decline is to be expected, and doesn't feel out of line.
  2. It's hard to argue things are going swimmingly the same week the Federal Reserve cuts the Fed Funds target. In its directive the Fed stated "the pace of economic expansion will likely slow in the near term, partly reflecting the intensification of the housing correction." The Fed knew the GDP number before issuing that statement, and probably knew the employment report in broad terms. The Fed seems to have switched back to a neutral stance for the moment though they will "continue to assess the effects of financial and other developments on economic prospects." That does not sound like a real vote of confidence.
  3. Employment is at best a coincident indicator of the economy; Nouriel Roubini argues that it is even lagging. Some think the recession might occur this quarter, but I think the majority view is that, should one come, it's more likely to be in the first quarter next year. So employment wouldn't swing down just yet. Even so, average growth since June has barely made 100,000 jobs a month, which is not nearly so fast as earlier in this expansion ... and this has been a pretty slow expansion for jobs. Up here in St. Cloud, the expansion of the manufacturing sector may be the only thing keeping the local economy from slipping into recession, and that might not last if the latest national figures are true here as well.
  4. If you look at the jobs report, where are the losses? Pretty much every goods-producing firm. If you think about which industries turn first when a recession begins? Yes, the goods-producing sector.
I'm not saying, I'm just saying...

UPDATE: Looking before bed, I see this wasn't posted when I thought it was.


Mrs. Scholar's November column 

This month it's about surveillance, the Patriot Act, and privacy. It turned out she never had read 1984 until getting ready for this column. We don't agree on the Patriot Act, I think, but her use of the Stasi example at the end is from a conversation we had. I am moved by it to finally watch The Lives of Others, and so it goes top of the Netflix queue. Hope she'll watch it with me!


Health care: Just like pizza 

Barack Obama granted an interview to a five-year-old reporter, and explains his health insurance plan:

Crouching to the ground after a rally with 4,000 supporters, Obama briefly outlined for Hadassah his plan to provide health insurance for everyone and to improve schools. He also suggested to the first-grader that wealthier people should help those who are less fortunate.

"We've got to make sure that people who have more money help the people who have less money," Obama said. "If you had a whole pizza, and your friend had no pizza, would you give him a slice?"

"We've got to make sure?" Who's the we? It's really telling that in Obama's mind, health care reform is a transfer program, not a way to improve efficiency of the health care system.

(h/t: Final Word producer Matt Reynolds.)

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A win in Delaware 

The program at the University of Delaware we reported on this week has been halted. Hot Air reports:
Late Thursday, University of Delaware President Patrick Harker released on the school�s website a Message to the University of Delaware Community terminating the university�s ideological reeducation program, which FIRE condemned as an exercise in thought reform. He stated, �I have directed that the program be stopped immediately. No further activities under the current framework will be conducted.� Harker also called for a �full and broad-based review� of the program�s practices and purposes.
A further report in the Philadelphia Inquirer highlights the backsliding that now is happening on the campus.
Michael Gilbert, the university's vice president for student life, acknowledged "missteps" in the program, which is intended for the 7,000 students living in dormitories on the 970-acre Newark campus.

Among the problems Gilbert acknowledges: Resident advisers told students the sessions were mandatory when they were voluntary; the term "treatment" was used, which he said could be "easily misinterpreted" and "construed as inappropriate"; and students were rated "best and worst" by RAs after their one-on-one meetings.

Students "are not required to adopt any particular points of view but are presented with a range of ideas to challenge them and stimulate conversation and debate," Gilbert said in a posting on the university's Web site.

A few "overzealous" RAs told students they had to attend the meetings, he said. After students complained recently, they were informed last week that they did not have to attend.

As for the prying sex question, Gilbert said the exercise was intended to help students "reflect on a number of things" and to become "critical thinkers," and would continue.

It a student declines to answer "our obligation is to accept that and respect that," he said.

An RA who asked that he not be identified for fear of being fired said he was so uncomfortable asking students about sex and race in the one-one-ones that he never did it.

"It's an insane thing to ask," he said.

During the interviews, which are held twice a semester, staff evaluate students on their "level of change or acceptance," he said.

Gilbert said the only ratings were of RA interview skills.

The senior, who is in his second year as an RA, said: "There's very little dialogue. It's very much a monologue.

"They call it diversity, but what it really is acceptance of a specific set of dogma," the student said.
I'll update when FIRE posts more later this morning.

The president's note says the program has been misrepresented by the press. He'll have a harder time making that claim with the reports in the Inquirer's article.


Thursday, November 01, 2007

To Hillary: We Women Aren't Oppressed Victims 

Hillary's gaffe at the Tuesday Democrat debate has been covered in previous posts here, here and here. Howard Kurtz summarizes reactions to this gaffe in an article in the Washington Post.

Now the Hillary campaign is going into overdrive, playing the "women are oppressed" victim card. How typical. Truth is, Hillary is no victim. She blew an answer to the issuance of drivers' licenses to illegal immigrants - it's that simple. Her "I'm the oppressed woman" plea shows immature and irresponsible behavior, another example of blaming someone else and calling them names to dodge an issue.

When you're #1, regardless of environment - political, economic, militarily, commercially - your competitors come after you. It's called LIFE. Deal with it Hillary - acting like an excuse-driven wimp doesn't fit your canned persona.

We women succeed everywhere by producing, not by whining and complaining that someone is holding us back. Do not ask us to vote for you by claiming you are being oppressed. That's a crock and you know it.

More Attacking the Person by Hillary's Staffers 

The Clinton machine is hunkering down, going into defense mode. As this article in The Hill, a leading source of "inside the DC beltway news" shows, Hillary's staff now claims her debacle was caused not by her behavior or her inability to come across as knowledgeable, organized, poised, etc. Her demise supposedly was caused by Tim Russert. One supporter even said, "Tim Russert should be shot."

As I wrote here and here, Hillary's defense team is behaving typically. Their comments do not focus on the FACT that Hillary flubbed her answer about giving drivers' licenses to illegals. Instead, the staffers focus on blaming and ascribing labels to others.

I heard Margaret Thatcher speak a few years ago. Maggie was asked if there were any special problems with being a woman prime minister. She was taken aback. Her response indicated this was a non-issue for her. You see, Margaret Thatcher was a strong individual who valued her job performance. She did very well, in all environments.

Hillary Clinton is no Margaret Thatcher, not even close.


Shocking development in MOB election 

In the election of the new mayor of the MOB -- ApplesCowsSki appears to be fading -- we are in receipt of evidence showing the unfitness of the candidate Atomizer. Endorsed of course by his brother blogger Chad the Elder as the candidate with the motto "Drink Early and Often", this is of course a play for the share of the MOB that frequents such fine establishments as Keegans. Thus this requires that the Mayor be able to hold his booze rather well. We commend ApplesCowsSki for his excellent imbibing skills.

As to Atomizer, I have in my possession evidence that Atomizer is not so gifted in this department. We have a picture of him enjoying a beer one recent evening on a very Scottish-looking couch, which of course may annoy the Keegans. It would not be good for the Mayor to run afoul of our Irish-MOB friends.
It is interesting that Atomizer insists on going out in this outfit looking like Flat Stanley. This is surely a coincidence. Note the orange shirt. Very difficult to imagine a mayor so dressed. But worse, he obviously could not hold his liquids, as the following picture will attest.

It is believed that he was heard saying "Gato, was that Minute Maid or did you just see a UFO?"

The MOB deserves better in its mayor. We favor dogs and cats, good spelling, free vowels for everyone, and the ability to control one's beer intake. Have you voted yet today? Buttercup says do it:


Curving public education 

At the University of Wisconsin - La Crosse, a planned shift to a high tuition-high financial aid strategy was explicitly designed to increase diversity. After outcry from the state legislature, the plan has been dropped.

The university�s chancellor, Joseph Gow, said a quarter of the money raised by a $1,320 tuition increase over three years would have gone toward need-based financial aid. The other 75 percent would have paid to hire 130 faculty and staff members.

�Because we can bring in needier students, the hope was to increase diversity in the student body,� Mr. Gow said on Tuesday.

They still want to increase student aid, but now will only do so through state money. The differential tuition plan, though, is still on the table, though for much less than the original proposed tuition increase.

Differential tuition charges are common practice in Wisconsin and many other schools. They make sense to cover additional costs, or sometimes as a revenue generator from high-demand programs (business schools do this from time to time.) This model at UWLAX though looks more like the emergency room model: rack up high fees on the paying customers to cover the cost of the patients who come in without insurance. Is there anything wrong with this? Given the negative response from Wisconsin legislators, my guess is that cutting into the middle class subsidy that is public education didn't go over well with the constituents.

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Education is the NAME of their game 

Longtime reader Prof. Peter Lorenzi sent me a column regarding the appearance in his Baltimore this week of the National Association of Multicultural Education or NAME. Their chosen theme is �Charting the Course to Academic Excellence and Equity Through Multicultural Education,� a group whose executive director openly declares that its goal is indoctrination:
I�m excited that we�re entering into a new civil rights movement that�s been nicknamed Civil Rights 2.0. If properly challenged, students can become the vanguard of this new movement.
Of course, if they want to become just math teachers? I guess they would not have been "properly challenged." Anyway, the reason Peter sent it to me was mention in the column of a course taught by someone here at SCSU. Here's the conference catalog, and the full description of the course:
1.09. The Unbearable Whiteness of Being: Dismantling White Privilege and Supporting Anti-racist Education in Our Classrooms and Schools. This intermediate to advanced pre-conference workshop is designed to help educators identify and deconstruct their own white privilege and in so doing more deeply commit themselves to anti-racist teaching and critical multicultural education. This institute is very participatory and requires attendees to take risks and be open to self reflection. There will be ample opportunity for participants to apply the content presented and thus folks are invited to bring experiences from their educational environments. The workshop is geared toward E-12 educators, administrators and staff but is also accessible to folks from higher education, community education and social services.
You might wish me to have fun with this, but I don't really find it funny. Schools in Maryland and elsewhere are using taxpayer dollars to send their teachers to this sort of stuff, whereupon they are required "to take risks and be open to self reflection" (that is, admit to white guilt) so that they can "more deeply commit themselves to anti-racist teaching and critical multicultural education." You almost hope instead the teachers merely squander the taxpayers' money by sitting in the Inner Harbor area having a Starbucks instead of bemoaning their own race in some conference hall.

Indoctrination is of course a prelude to a call to action, and another of my colleagues provides a call later in the conference:
5.00B. The Dream Act: How We Can Make It Part of the New Immigration Reform? The Immigration Reform Act (S.2010) revived by President Bush on 2004, and other bipartisan proposals in discussion are important pieces of legislation that will give undocumented immigrants legal support to live and work within the United States. Legal legislation such as the DREAM Act, oriented to provide a legal support to undocumented students after graduation in high school should be included as part of any integral reform of the immigration laws.
Again, this is a session being taught by someone in the college of education. To teachers. Regardless of your position on immigration reform, what is this doing in a conference that is supposed to show teachers how to teach to diverse student bodies? Compared to these, the last of the sessions offered by SCSU faculty, titled "Rainbow Families� Educational Outreach Program: Your Handy Guide to Queering the Curriculum and Making Schools Safe for All Families," actually sounds closer to what their mission should be. Lobbying for immigration reform, however, is advocacy.

A reminder: Indoctrinate U ends its run tonight at the Oak Street Cinema.


Avoiding Ideas by Attacking the Person 

Last evening, I wrote this post about Hillary Clinton's staffers, who dealt with her poor performance in Tuesday's Democratic Presidential debate by blaming others for her debacle (Tim Russert was belligerent and mean, etc.). They showed the all-too-typical leftist/Democrat behavior of avoiding ideas, instead resorting to attacking the person, in this case the debate questioners.

So, the first comment on my post was made by someone who ignored the ideas I raised, assumed I was a male, and immediately attacked me by implying I am a sexist.
Someone else that can't stand a strong woman..I feel for you men.
Hello!? For those of you who are reading challenged, please note, my name is "Janet." I consider myself, as do most others who know me, to be a strong, independent woman. If you have any remaining doubt, here's a photo.