Wednesday, April 30, 2008

King Is Out of Surgery 

Gary Gross was the first to post the following e-mail from King's wife, Barbara:

King had his gall bladder removed but needed the major incision for which his hospitalization will be prolonged until Thursday or Friday.

Apparently, it was very infected.

Barring complications, he will recuperate on the 4th floor of the hospital.

I�ll continue to keep you posted; meantime, what a blessing the Blogosphere has been. I can�t thank you enough,


We are all extremely thankful and relieved at this good news, and wish King and his family the best.

Update April 30.

King is recovering satisfactorily. Thanks to all of you who sent wishes of a successful operation and healthy recovery. All your comments were copied and sent to his wife, Barb. If you care to post any more comments, those two will be forwarded.

Again, thank you all for your thoughts and prayers.

UPDATE (11am): Many thanks to all of you. I just took the most tiring, most exciting 10-minute, 150 foot walk ever taken by this human being and found I had a wire for my laptop here. I am shocked beyond words at the outpouring of friendship shown me the last few days by you all on the comments, in other posts and people who've come by the hospital so far. I'm a little too weak to do lots of blogging, so this is all for today most likely. I'll tell you the rest of the story sometime. But when I tell people that virtual friends can be just as vital as those in real time, your comments, thoughts and prayers will be Exhibit A for the prosecution. God blesses me with your friendship. --kb

Update Thursday, May 1

King continues to do well. Most pain is gone. He's taking short walks. He gets solid food this morning. Toast never tasted so good! Again, thanks to all.

Tuesday, April 29, 2008

From an Aussie Soldier 

I am biased in favor of American soldiers. We have the best trained, most professional, caring soldiers in the world.

Having said the above, here are some quotes from an Aussie soldier regarding his experience with American soldiers in Iraq. You can go here for the full letter. I am comfortable that it's legit - the original source was Michael Ledeen at Pajamas Media a known specialist on the Middle East and Islamic jihadism. This says it all.
Gentlemen I am an Australian and my son is an Australian - as far as we are concerned there is not place on God's earth better than Australia, and there are no people better than Australians. My son and I just ended a long 'phone conversation and here are some of his comments, believe me this is what he said.
'Before I came over here I thought we (the Australian Army) were pretty .... hot..... was I ever wrong!....The Yanks (I hope you don't mind me using that word) are so professional from the top to the bottom that it is almost embarrassing to be in their company, and to call yourself a soldier....don't get me wrong, we are good at what we do but the Yanks are so much better.....they are complete at what they do, how they do it and their attitude is awesome....they don't complain they just get on with the job and they do it right.
Let's face it they don't have to be here, they could stay in America and beat the s*** out of anyone who threatened them, but they are here because they believe they should be here, and the Iraqis would be screwed if they weren't here.
The reason why I am sharing this with you is because I realize that you (as a nation) must get pretty ***** with all the criticism you receive by the so-called 'know it alls' who are sitting at home - safe. The reality is that they are safe, just as I am, because of America. If the world went arse up tomorrow ..... I know that the Americans would be there putting themselves on the line for others. That to me is the sign of greatness.
UPDATE: This is so typical. I posted this tribute to American soldiers, which praises their professionalism, their competence, their attitudes, and their willingness to sacrifice for others. The first response is a comment with not one positive word about our soldiers, instead changing the subject to bash President Bush and the American government. Such behavior is why so many claims to "support our troops" give the impression of hypocritical and cynical propaganda.


Monday, April 28, 2008

King is in the Hospital 

To our readers: King is in the hospital at this time and won't be blogging for a while. We'd talked Saturday morning - he'd landed in the hospital then with some stomach problems. He's on a restricted diet so stomach issues cannot be ignored. He was feeling better and they could find no source of the problem. He came to the Twin Cities to do his afternoon radio show, drove back to St. Cloud only to return to the hospital on Saturday night.

Tests run today indicate his problem is his gall bladder. He'll wait for surgery because he is now running a fever and having heart palpitations. His St. Cloud blogging buddy, Gary Gross, has information here.

As of now, surgery is scheduled for Tuesday morning. King has received pain meds. I will keep readers posted. In the meantime, any thoughts and prayers for King and his family are welcome. Any comments you post will be forwarded to King's family. Thank you.

Update, Tuesday, 4/29

As of now, King rested comfortably. Surgery is this morning. After hearing results, I'll post. To those who left messages for King and his family, thank you! They are really appreciated!

Saturday, April 26, 2008

April 26 - Snow 

This past Wednesday was beautiful - temperature in the low 70's, clear sky and, "Finally," we thought, "spring is here!" After all we had a rather prolonged winter.

Budding trees, the beginnings of flowers, shorts, t-shirts, etc. - all signs of spring were visible. We then experienced two days of rain (great for the farmers) and this morning, SNOW. It's April 26. Included are photos from the back of our house - you can see the green of lilies, iris, and other flowers through the dusting of snow.


Friday, April 25, 2008

Rediscovering partisan cycles 

Many people are talking about Larry Bartels new book, Unequal Democracy. Paul Krugman talks about the differences in inequality between GOP and Democrat administrations, but he can't figure out why that happens. Dani Rodrik seems to accept Bartels' explanation of why voters still vote for Republicans when they keep giving us recessions and income inequality, which is that voters are myopic. (Russ Roberts calls the data into question -- well worth considering, but not my point.)

Alex Tabarrok makes the key point: We've known this result for some time.
In a nutshell, the theory of partisan business cycles says that Democrats care more about reducing unemployment, Republicans care more about reducing inflation. Wage growth is set according to expected inflation in advance of an election. Since which party will win the election is unknown wages growth is set according to a mean of the Democrat (high) and Republican (low) expected inflation rates. If Democrats are elected they inflate and real wages fall creating a boom. If Republicans are elected they reduce inflation and real wages rise creating a bust.
A certain economist wrote his dissertation on political business cycles in the 1980s and considered partisan cycles. I didn't have at that time the nice chart that Alberto Alesina and Howard Rosenthal (Am Pol Sci Rev, 1989) drew that Alex has updated, but I had noted what they note in their introduction. Democratic and Republican candidates have "polarized policy preferencs" in that Democrats have a higher tolerance for inflation and a lower tolerance for unemployment than do Republicans." (pp. 374-75) There are also economic frictions caused by the presence of wage contracts, that must be set during the period where we don't know whether the Republican or Democrat will win. Because these contracts can be rewritten after the election, most of the shock that occurs when one side or the other wins an election happens in the first half of the new administration; ergo, partisan cycles are the result of settling electoral choices. Unlike earlier political business cycle models, you can generate these results while still having completely rational voters. What they lack is only knowledge of how everyone else in the economy will vote.

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The state claims your air and gives it to its rich friends 

So we've had the state house now pass cap-and-trade. Leo notes comments by Rep. Kate Knuth about the transformative nature of cap-and-trade.
"Cap-and-trade will change the jobs that we have in Minnesota -- I think it will change the jobs for the better," said Knuth, DFL-New Brighton. "It will bring clean-energy jobs."
CBO director Peter Orszag, commenting on federal cap-and-trade proposals, notes that this is simply giving revenue to those who get the allowances under the cap. Proposals currently exist in S. 2191 to give away allowances that CBO values at $145 billion. We don't have a similar number for Minnesota. And if the feds pass their cap-and-trade proposal, what happens to Rep. Knuth's bill?

Orszag's idea instead: Have government sell the allowances, and use the revenues to reduce taxes. Did anyone in the DFL legislature come up with this idea of reducing taxes? Naw, they're happy to give away your air rights for a better Minnesota!

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The second law of supply, or, food's too important to leave to government 

The same people who wanted you to use biofuels now are telling you they are bad. The worldwide shortage of food because of demand for a substitute leads to rising prices and, because in the short run you can't grow more rice, runs on rice supplies here and abroad.

I make part of my lecture on supply and demand a "second law of supply". Big shifts in supply or demand will lead to large initial changes in price. Elasticities are always greater in the long-run than the short, as some fixed prices become variable and some investment opportunities take time to build. When Ed Morrissey says,
Perhaps turning food into transportation fuel would make sense if massive amounts of grain spoiled every year from a lack of demand...
he's only half right. All surpluses are eliminated by falling prices, and all shortages are eliminated by rising prices, in a free market. The grain will spoil for one year, and then we grow less grain.

'Tis from this logic that the theory of cobweb cycles grew in the 1940s. Cobweb cycles make sense as a theory for the movement of corn prices if two conditions apply: There's a significant lag between the decision to produce and the delivery of the product (true for most agricultural products) and supply decisions are based on current prices. Of course, corn has a futures market. At the time of this writing, the spot price for corn was $5.77 but the price for delivery in December 08 is $6.07. That price is driving the decision to plant X acres as corn, valued in comparison to the prices of soybeans, wheat, and whatever else you might grow on that land. What happens after about June 15 to that market doesn't matter so much, as most corn is already in the ground by then in the Northern Hemisphere.

It is also interesting to note that, while the price of corn futures rises steadily, the price of ethanol futures declines as we go to more distant dates on the contract. The rising price of corn induces more corn into the market, which creates more ethanol and reduces its price. Prices adjust in the long run back towards the initial price. Far better than the Terror for allocating goods and services.

Ed continues:
Farmers love the higher prices that come from the new demand to fill gas tanks, but higher prices have consequences for poorer nations that have just begun to be felt. Morally speaking, shouldn�t we feed people before we feed cars?
Esther Duflo is also arguing that we need price insurance for the world's poor.
The traditional method used by developing country governments � maintaining large stockpiles of grain by buying when the price is low and selling when the price is high � has its share of problems. In India, it was said that at some point that there were enough bags of rice in those storage facilities to go to the moon and back. The losses in storage and to corruption were important. Alternatively, the governments can manipulate prices using taxes and subsidies. Or perhaps it is time to be creative and make the international financial services actually work for the poor: governments could provide price insurance for the poor (in the form of transfers to some when price are high, and others when price are low). Countries that are neither net sellers nor net buyers could do this internally, and countries that are either net sellers or net buyers should be able to sell this insurance on the world market.
But isn't this what speculators do? We have seen what public insurance in financial markets does: We get too-big-to-fail. We get political pressure overriding contracts and even the law, letting banks and brokerage houses skirt financial regulation because it would be too disruptive to let them fail. Should we trust those same mechanisms with our food?

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How others see us 

It's a great thing for St. Cloud area students to perform an original choral piece. Even greater that they are going overseas. And better yet, an oratorio about the Holocaust delivered at the site of a Nazi death camp.

But the title of the piece, From anti-Semitic hotbed to healing: St. Cloud area students to perform oratorio at Nazi death camps once again has some Twin Cities writer who probably spends NO TIME in St. Cloud using the swastika story to paint an entire town as a hotbed when the one student who admitted to drawing a swastika comes from a St. Paul suburb. Yet we had to be open and pro-active, and we continue to get this kind of press. Cui bono? Those who use the claims of "systemic racism" to further their urban racial political agenda.

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The only progressives I like 

Are the ones I'm wearing. John Palmer doesn't seem to like his so much. John, it took me more than a week for adjusting to the first pair (he doesn't say how long he's had his). I'm looking at a 20" screen right now and can see all without moving my head. My optometrist is also my golf partner, so I probably can't use John's suggestion of ordering glasses from China. But I do get free delivery of replacements ... at the first tee!

(Which reminds me, I need to fill my new prescription. This aging thing is not working for my eyes very well. Frame suggestions welcome!)


All the elements you'd want in a tenure dispute 

Matt Abe has highlighted a dispute over tenure for Guillermo Gonzalez that is pretty darn juicy. A scientist supports the theory of intelligent design (ID) and comes up for tenure. Despite having academic publications in peer-reviewed journals far in excess of the tenure requirement, and without any evidence of poor teaching, tenure is denied. Using data practices act filings, Gonzalez gets copies of emails between his colleagues, showing not only a deep contempt for ID, but a campaign to get him to not apply for tenure "and solve us the potentially difficult issue."

What makes it juicy isn't that this is yet another debate over ID. It could be any of a number of issues where members of a department have a strong disagreement over the intellectual pursuits of one of its junior members. What's juicy about it is the debate over whether a department can vote against tenure of one of its junior faculty because they think someone's research is fundamentally flawed, to the point where it does not meet the professional standards of the discipline. (And I need to be a little careful here, because some departments are interdisciplinary, or non-disciplinary -- and I could even name a couple here that are antidisciplinary! -- and would need to find a substitute. Permit me to set that question aside.)

Without taking sides in the Gonzalez' case, let me argue that his department does have a responsibility to determine whether the research meets the professional standard. The department's own standards indicate that the standard isn't the number of publications but "excellence sufficient to lead to a national or international reputation." That judgment is subjective, of course. Matt notes in support of Gonzalez that:
Isaac Newton, Francis Bacon, Gregor Mendel, Copernicus, Kepler, and Galileo ALL approached science with the assumption that they were studying the works of an intelligent creator, God. Historians have observed that it was exactly this perspective that enabled the start and advancement of modern science.
But what if the profession had, after the many years since these great scientists worked, moved towards a different standard? What would the faculty at ISU uphold?

I would be interested in knowing the process by which Gonzalez was hired. There are in faculty interviews a number of things that form an implicit contract between department and junior faculty. It would involve more than the department's statement. Were there annual reviews, in which Gonzalez was told that his research in ID did not meet the professional standard in the eyes of senior faculty? The email that his supporters document seem to have an element of secrecy, even stealth, about them. (I have never seen such things written in my own department, but I don't find them very surprising.) That makes his case stronger. But a department should have some freedom to shape itself, guided by a commitment to free inquiry and the standards of its discipline. Just because it appears the two are in conflict in this case should not mean that the department is purely engaged in suppressing Gonzalez' academic freedom.

My guess is that the case will end up decided on whether due process for Gonzalez was violated. There are cases -- such as that at Virginia State (temp link) -- where administrations assert they are the holders of academic freedom rather than the faculty. But in most places an administration does not assert that it can decide whether a professor meets disciplinary standards, and I doubt it happens here either.


Why �News�papers Have Lost Former Subscribers Like Us 

Hunger Stalks Millions of Poor Americans blares the headline in the Financial Times of London. The article itself, however, turns out to be a combination of rank speculation and advocacy journalism for more welfare spending, triggered by pending congressional consideration of the farm bill.

The real story behind the farm bill, of course, is this astonishing observation by Ronald Bailey:
The amount of food being burned because of government mandates and subsidies for biofuels would feed nearly 450 million people. [My paraphrase]
That�s right, folks. We could feed every person on the entire North American continent with the food we burn because of well-intentioned but foolish government intervention in agricultural markets.

Over at National Review Online, Deroy Murdock notes the resulting Global Food Riots: Made in Washington, DC occurring in such places as Haiti, Mexico, Egypt, Pakistan and the Ivory Coast. His excellent article pulls together a wide range of relevant factual information on the biofuels mess, linked to the sources.

Contrast the opening sentences of the FT story:
An escalating global food crisis could bring the problem of hunger home to the US and other developed countries. Millions of poor Americans risk going hungry if food prices continue to rise and food agencies struggle to cope with rising costs, dwindling resources and a huge increase in demand. Already more and more poor people in the US are turning to charity and government assistance as they struggle with rising food costs and soaring fuel bills.
The only factual information here is that the US has a social safety net, consisting of a variety of government programs and private charities that help poor people with food, fuel bills and similar problems. Food prices are up, and the social safety net appears to be doing what it is supposed to do. The rest is speculation.

All of the remainder of the FT article consists of quotes from �campaigners� who seek �to broaden eligibility for food stamps and increase emergency food provision�: the California Women Infants and Children Program Association, the Food Research and Action Center, the Cleveland Food Bank, the Greater Chicago Food Depository, America�s Second Harvest, and Martha�s Table.

It is neither news nor interesting analyis that such organizations want more of our tax dollars devoted to their government rent-seeking activities.

We used to subscribe to the Financial Times, the Economist, Scientific American and National Geographic, all of which once consistently published excellent material with analysis based on well-sourced facts. We watched with dismay as each began to devote more and more of their limited resources to shallow advocacy pieces like this. We canceled our subscriptions, one by one, with regret.

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Thursday, April 24, 2008

Talk tonight 

I will be speaking to a group of students at St. Olaf College tonight at 8pm in Buntrock Commons. The topic is health care and Medicare. "King, you don't know anything about that do you?" That's why I take these tasks on, to force myself to learn. I went through the positions on Medicare of the three different candidates. Short of it: None impressed me.


93 and remembering 

A friend of mine challenged me to let five people know today about the Armenian Genocide.

I will refer you five (and let me hope there are more than five) to the writer I consider most reliable in assessing genocides and democides of the 20th Century, Rudy Rummel. He writes of the entire panoply of genocides, not just the largest one begun this day in 1915. My grandparents left Turkey -- grandfather to America with his older brother, grandmother to a Lutheran orphanage in Beirut -- before the Young Turks came to power in 1909. They were casualties or collateral damage of the massacres of Sultan Abdul Hamid II, the last Ottoman leader. (A stub of the story is still up on my family website written several years ago. I've not gotten around to reposting the rest of it.)

I have many stories to tell about marking today, which is known among Armenians as Genocide Day or Martyrs' Day. But perhaps the only thing that matters is that it eventually led a great woman, my medz mayr, to come to Dover NH, to create a family that included my father, who used to sing songs to me as a child that were Armenian and German, which I could only understand by learning about her life. And through it the tragedy of her family, her dead husband's family (my grandfather died when my dad was four), and a family tree that I've spent the last ten years trying to reconstruct. The records are gone -- they were in the Armenian churches that we are now told never existed -- and the older ones who remember are mostly gone. Remembering the martyrs is not about remembering murder and destruction; it's about remembering where you came from.


Wednesday, April 23, 2008

Happy to pay for five more days 

As you probably know, today is referred to as Tax Freedom Day. But, if you live in Minnesota, hold on for Monday. Our state and local taxes push Tax Freedom Day for us out to April 28 (see p. 7). Congratulations, Wisconsin, yours is tomorrow.

Meanwhile, you can learn a nice tune:

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An extra European fact of the day 

Tyler Cowen notes that Italy's largest electric utility is converting a power plant from oil to coal, in spite of Europe's stated intentions on reducing greenhouse gases. I forwarded that post to a student of mine in the energy industry, who notes:
I believe it was last year the German government passed a law decommissioning all nuclear facilities by 2020. As of today, roughly 30% of the German grid is supplied by nuclear generation. The other alternative to coal is natural gas but the problem there is the Germans, and virtually all of Europe, doesn�t feel comfortable becoming more dependable to the only supplier of gas in the region. That being Mother Russia herself. With the EU ETS getting over its honeymoon phase with serious haircutting to carbon allocations, this should cause some volatility in the carbon and power markets. Exciting times�
He's right about Germany. And decommissioning is expensive.

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It happens every spring 

Two nights ago Mrs. S started shouting to me down the stairs (where I was in NBA playoff bliss) "we need to buy more gasoline." I realized she meant to bank more gasoline. We keep an account at First Fuel, where we have approximately $1500 socked away, purchased at $2.699. The newspaper blared yesterday morning that we had struck a record. Mrs. S, I've concluded, is a momentum investor.

Humor aside, it's worth wondering what is going on right now. We know that records should be corrected for inflation and for changes in taxes, but that won't explain everything. The recent state tax increase should have added only $0.02 so far, and Federal taxes haven't changed. The tax proposals of some (including John McCain) to have a Federal tax holiday doesn't help that much, as Menzie Chinn points out. Half of that shifts back towards oil companies. I'm not looking to tax windfall profits, but there's little sense boosting their profits further at this time. And Chinn notes "to the extent the lower price spurs gasoline consumption, this should increase the petroleum and petroleum products component of U.S. imports, and thence putting further upward pressure on the price of oil..."

Another issue is that these reports come out every spring. Last year we were talking about gas boycotts around this time. Two years ago it was ethanol, another pitch of the tax holiday etc. Three years ago it was evidence of stagflation. Like first pitch, it happens every spring. Here's a chart to show what I mean:
The technical term for this graph is that it is the Census X-12 seasonal factor for the price of a gallon of regular unleaded gas (all formulations, source.) If it matters to you, I estimated it with EViews 5.0 and estimated it over 1980-2007. I'm only showing you the last three-plus years. For the layman, the vertical scale is the multiplicative factor set to equal 1 when the month is normal. 1.04 says the month on average has prices 4% higher due to the season it is; a 0.92 says the price is 8% below a normal month. As you can see, the high months begin every April, tending to peak in May and then coast to the fall, where they fall to a nadir in December and January. Naturally, that's when I put money in the fuel bank. Most of my friends know this by observation; I of course have to use an econometric package to get the same answer, proving I'm not smart, just methodical.

That same analysis also generates an underlying pattern of the trend and cyclical movements of the gas price. Now this picture should scare you if you're worried about gas prices, but it also puts the emphasis back into mid-2007, where I think it really belongs.
The vertical axis is cents per gallon. This process takes the noise out of series and the seasonality to look for shorter trends, and no doubt the trend is straight up lately. If you extrapolate that trend, even with the decreasing seasonality, a $4 gas price is just slightly less than a 50-50 proposition. I get $3.976 for a July forecast using this very crude estimate. The drop in late fall and winter will only have the price slide back to about $3.65 by December. Why that upsurge is happening isn't really so clear, though Jim Hamilton's contention that it's Fed policy feels pretty right to me. Not that I'm a gold bug, but the price of gold on a monthly chart has about the same pattern.I think that if you took the prices of all commodities -- which may or may not be simply a representation of a weak dollar -- and combined it with the gas seasonal factor, you go a long way to explaining the price of gas. And if you do believe this, you should take Mrs. S's advice. You're not likely to see a price at this level again until December at the earliest. And maybe not even then.

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Tuesday, April 22, 2008

Obama, Wealthy Democrats, and the Rest of Us 

I've not commented on the Obama craze the past few months. I'm happy to let the Democrats duke it out among themselves. But, this San Francisco fundraiser displays such an incredible example of the hypocrisy of what the Democrat Party says it is that I decided to post.

The Democrats bill themselves as the party of the working man. I've even seen the old bumper sticker with words to the effect: I can't afford to be a Republican. I've got news for you - the billionaires are overwhelmingly Democrat - you can't afford to be a Democrat.
Most media moguls, Democrats;
Dot-com mega-millionaires and billionaires, Democrats;
Stock market honchos, Democrats.
These people, most of whom earned their mega-fortunes, have now decided they are smarter and better than the rest of us. They have their fundraisers at multi-million dollar mansions with their mega-rich friends, and agree with the condescending, snide remarks made about the rest of us peons.

What made America great was our environment that fostered, encouraged, and supported new ideas as well as the knowledge that with enough intelligence, hard work, and sometimes a few breaks, people could create and earn more than they ever dreamed. Most of these incredibly rich Democrats earned their money in our free-market system.

What happened to their attitude once they became so wealthy that money no longer meant anything to them? Did they put their efforts to encouraging others to repeat their successes? No.

Obama's behavior is that of a privately schooled, east coast educated elitist. He was at home with the San Francisco mega-money crowd. He and his super rich supporters do not understand that we Americans are capable of making our own decisions and we don't want others telling us what to do or how to think. This elitist attitude may well have cost him Pennsylvania tonight.

I don't want their money, I don't want their houses, and I surely don't want their arrogant, elitist attitude. What I do want is the continued opportunity to support the nation that gives people a real chance.

There will always be elitists - it's just that too many of today's elite Americans are far too socialistic minded. They are totally out of touch with the very people who buy their products and made them wealthy beyond belief.

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Empty holsters at SCSU 

This week many campuses are seeing students protesting their inability to carry a concealed weapon while at school. The protests consists of students going about their business while wearing an empty holster (and one that is clearly seen as being empty.) The group Students for Concealed Carry on Campus have organized themselves for a second such protest (the first occurred last October.)
The two purposes of an Empty Holster Protest are:

1. To represent to the public that students, faculty, and guests on college campuses are left defenseless or, metaphorically, with empty holsters.

2. To start a dialogue with students and faculty members who may not know the facts of the issue.
Last Friday, the campus communications office sent out a notice telling us that this was happening here, explaining the protest with the link I used at the top and this:
Participants will be wearing t-shirts and EMPTY holsters and handing out flyers. The national organization sponsoring the protest has made it clear that students are NOT to carry anything inside the holsters. Students will not carry signs or banners and have made a commitment to avoiding any disruptive behavior. Behavior outside the promised parameters may be reported to Public Safety...
I must say that last sentence worried me. I have no recollection of any notice on our campus letting people know to report "behavior outside the promised parameters". Those parameters are determined by the letter that the group is having all the campus chapters use. In short, they can wear the empty holsters and t-shirts (which are a little too expensive, so the students here have said they would eschew them) and can speak to people who ask about the holsters, but they would not approach any groups or hand out literature.

To its credit, the administration issued a statement Monday morning that clarified that the students' speech rights were to be respected, from President Earl Potter under an email titled "Peaceful Protest This Week":
I recognize that this protest comes at a time when our sensitivities to safety on campus have been heightened by recent events. Nevertheless, I need to remind us all that while individuals in a university community may disagree with the opinions expressed by the protesters, we have the responsibility to be tolerant of their views and must not retaliate against advocates for these views. We must remember that these students have the first amendment right to free speech and the right to protest within university guidelines which prohibit disruption or interference with classes or other university business.
The flow of campus email, which over the weekend had faculty and staff looking for ways to stop the protest turned to decrying the students' insistence that they be allowed to advocate for guns, because guns are bad, or that guns are only desired by people who wish to do us harm. (Of course, articles like Arthur Brooks' in last Saturday's WSJ fall on deaf ears. Mitch, by the way, has an excellent commentary on that today.)

Some of the early comments included (direct quotes):

These were before the President's letter, and all were thinking that somehow it could and should be stopped. Afterwards, the comments turned to:
I did not participate much in this discussion, as I realized how little I knew, but one would have to say that if the purpose of an Empty Holster Protest was to start a dialogue, they certainly got that. The question is, what happens after starting it?

Through students I knew on campus I was able to speak with two participants in this protest, Terrance McCloskey and Bill Jacobson. They agreed to meet me and another faculty member interested in First Amendment issues, Kathy Uradnik, in my office. McCloskey identified himself as a licensed firearms instructor, though so far he has taught only one class. Both came wearing empty holsters.
I placed the holster for my Treo alongside theirs; I then put my Treo in Bill's holster. It was a little small for the holster, but it was snug. As you can see from the picture, they are not obvious to anyone not looking closely, and any claim that they would be disruptive to the classroom seems a real stretch to me.

SCCC has advocated that each student group provide notification to the campus they are participating in the event. The SCSU students -- which they reported numbered "around 30" and included "a majority of the Student Government Association body" -- sent notices to Public Safety and to the student organizations group. They received a call about their "proposed" protest from administrative vice president Steve Ludwig, to whom they reported again that the holsters would be empty. They told me Ludwig expressed concern for negative emotional reactions to the holsters, which given the quotes above from faculty would seem well-founded. They also reported that they had a few students participate in the October protest as a test run. One student at that time had grabbed the holster Jacobson was wearing, "to check to see if it was empty." Other than that, there had been no reaction.

I asked if there was more reaction this time. Jacobson said that he had six people talk to him in the last two hours. McCloskey said he had not gotten any reactions today. They had had reported to them that one Public Safety sergeant had told a watch that they should be on the lookout and write up reports if any of the protesters got out of line, and one report was that a faculty member, well known to us, had started to approach them to talk but then backed away. Protesters are instructed not to approach anyone; I asked if they had literature to hand out if they were asked, but McCloskey replied that they had no money to print flyers.

We spent time reviewing other complaints and reactions. It is worth reminding people that the age at which one could get a permit is 21, so that some of the concerns of guns in the hands of "young people whose good judgment is not yet in full blossom" has been contemplated by the law already. We discussed restrictions on less-than-lethal alternatives like TASERs and pepper spray. Students can't carry TASERs either, Jacobson said, and the campus' student handbook extends the gun ban to "any other weapon."

Longtime readers of this blog know I do not own a gun. I haven't fired one since getting my rifle merit badge in Boy Scouts. I tried a handgun at that time, but not since. A couple of years ago Littlest wanted to learn about shooting a rifle, so we sent her to the classes and I went and watched her field class. She was 11. She was excited to try this, but she also was very respectful of a gun that day.

I share the fear many of my colleagues have of a handgun insofar as I am ignorant of their use. My conversation with McCloskey and Jacobson had one very strong impact on me: I was more aware afterwards of how little I know. I have no way of knowing, for example, how much a person trained to carry a concealed weapon would know about protecting the weapon from an attacker, the poise they have in dealing with intruders, the background checks one gets to be sure one is not a loony. I'm hopeful of changing that soon, to take advantage of one of my several invitations to learn how to handle and use a handgun. Not necessarily because I want a permit to conceal and carry -- how would I know if I wanted one? -- but in order to reduce my ignorance.

Which is why I got into this business anyway. Teaching in a university is supposed to put one in the ignorance reduction business. I suggest this as an antidote to the fear that the faculty above expressed: Yes, we should learn about campus safety and what we can do to increase it, but we should also overcome the fear that is borne of our ignorance about guns. We should practice what we teach.

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No, mister, you can't have one of those 

The local Women's Center is having a Pay Equity Bake Sale:

Tuesday, April 22 from 9:00 to 2:00 p.m. (or until the baked goods run out)

Atwood Lobby Area (near MSS)

In recognition of National Pay Equity Day, Women�s Action is selling baked goods more affordable for women. Come join us for brownies, cookies, muffins and much more! The first 50 women will receive a $1.00 discount towards coffee or beverages of their choice at the local coffee areas in Atwood*

As FIRE noted a few years ago, affirmative action bake sales tend to draw more heat than pay equity bake sales. You can figure out why.

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Quick add on generosity 

I wonder if the post on generosity could be expanded by some information from the Pew "Inside the Middle Class" poll. This paragraph I think tells us a great deal:
Some two-thirds (68%) of middle class respondents say that "having enough free time to do the things you want" is a very important priority in their lives. That's more than say the same about any other priority we asked about in this survey including: having children (62% said that is very important), being successful in a career (59%), being married (55%), living a religious life (53%), doing volunteer work/donating to charity (52%); and being wealthy (12%). Upper and lower class respondents give essentially the same answers. The demographic groups most inclined to say they highly value free time are the ones least likely to have it -- such as the employed, the middle-aged, and mothers of young children. In recent years, a number of public opinion surveys have documented Americans' growing sense of feeling rushed, and this perception tracks with the growth in the number of mothers who are employed outside the home and in the number of two-earner couples. However, recent research on whether Americans in fact have less leisure time has produced mixed findings. At least one major report, which relied on five decades of time use logs kept by different groups of survey respondents, found that no matter what most people may perceive, Americans today have more leisure time now than they did several decades ago. Other reports find that many middle class families have maintained their lifestyle only by becoming two-earner households, with all the attendant time stresses.
Notice where charity and volunteering rank on that list, relative to being wealthy. People jealously guard their time, perhaps due to the perceived stresses of having both parents work outside the home.

In short, what we are contemplating are long-run changes in labor supply. Real wages having been roughly constant, what else can be causing the labor-leisure tradeoff to change as it has. The intensive margin -- the number of hours worked per employee -- hasn't changed greatly in the US since 1980, but the extensive margin -- the share of the active population working -- has increased. So fewer people have time for volunteering, but everyone has the same (or actually a little more) time than before. (See this recent paper about aggregate hours across the OECD.) Perhaps we need models that involve joint optimization for two-adult households that choose to give volunteer time as well as work. I don't know any of those; sounds like a good thesis.


Monday, April 21, 2008

Star Parker at St. Catherine's 

Tonight, Star Parker spoke at two Catholic universities in St. Paul, MN, the University of St. Thomas (UST) and St. Catherine's (St. Kate's). Star is an engaging speaker. Her real life experiences are delivered in a manner that is riveting to most of the audience. She had had four abortions and with her fifth pregnancy, something made her uncomfortable. She started going to church and put her life together. Her talk at St. Kate's focused on poverty, what the left is doing to perpetuate the welfare system, and the five steps she used to get out of if.

1 - Take personal responsibility. Stop finding someone or something to blame. Regardless of background, it is possible for most people to improve their lot.
2 - Work at any job. A minimum wage opportunity is a start, not an end.
3 - Get educated. The left wants to manage and control who has access to what kind of education - they do not want vouchers. The media perpetuates this view.
4 - Save and invest money. Star favors private retirement accounts. Her mother lives on $700 social security a month. As Star said, "What if all the money my parents put into social security had gone into a savings account? My mother would have far more than $700 a month."
5 - Help someone help themselves. This is not a "do for" but rather provide real assistance.

Star's approach can be summarized as follows: Most people will succeed enough if given a chance. The welfare system is self-perpetuating and those perpetuating the system often have no clue as to the reality of the environment, how it saps an individual's self-esteem, and the problems that have arisen because of it. A recipient cannot save money, cannot get a job and can't marry - if the do, at least in CA, the welfare checks stop.

The students at St. Kate's were respectful. Unfortunately a significant number have bought into the blame someone mindset. Even when they heard real life events from someone who was trapped in the system, some simply refused to listen, use their minds. They have been so programmed that everything wrong is the result of someone or something else, they do not think. Even when confronted with facts, they refuse to acknowledge that there just might be another view.

Originally scheduled to speak at the University of St. Thomas (UST) , Star was denied access to the campus by UST officials because of the behavior of some UST students when Ann Coulter had spoken there a couple of years ago. Star was guilty by association because the same group that sponsored Ann Coulter was sponsoring Star Parker. Couldn't have that UST officials said.

In response, Star said she'd show up anyway. In the meantime, the College Republicans at St. Catherine's (St. Kate's), their president Renee Zeimer and their advisor, Dr. Terrence Flower stepped up and offered a venue. Star was scheduled to speak at St. Kate's when UST decided maybe they better open their doors to her at UST. (Could it be because the president of UST was meeting with the Pope on this visit?). You can read the report from UST here.


How wrong were those Corridor homebuyers? 

The housing boom hits much of Minnesota, but in a series running the last two days in the StarTribune the most dire area is Wright County, where there is see-through housing.

Some houses in the subdivision have been empty or unfinished for more than a year. Garage doors are missing, unopened mail clogs mailboxes, and dormant lawns have turned into tangled masses of weeds. Some homes are priced for $80,000 to $100,000 less than their original price.

"A lot of the prices that people were paying for property in Wright County had no basis in reality," said George Schmidt, a real estate agent with Remax in Anoka. "They were destined for foreclosure."

Blogger and frequent Scholars commenter 'bleak' argues that these homes in the exurbs had imaginary value.
What were the bogus justifications for the housing bubble? Prices only go up? No more land being made? (There's plenty of land in Wright County.) Baby Boobers were going to buy investment properties?

Humbug! Within a blink of the eye, all of that 'home equity' everyone was banking on is gone. It was never really there in the first place.
I have written articles locally about "the corridor", that area between Interstate 94 and U.S. Highway 10, which largely runs through Wright and Sherburne counties. It is an area that has filled in dramatically with businesses and housing as homeowners sought more room and escape from the tax burdens and land restrictions of the metro counties. Demographic estimates show an expected increase in population in these areas of 18-19% between 2006 and 2010. (The comparable number here in Stearns county is under 7%.) The answer to bleak's question of what justifications being made were "people are moving there". And not just from the east.

In the early days of the current housing crisis, the state implemented two new laws which placed restrictions on the mortgage market. No one is a fan of liar loans or the subprime market more generally, and everyone would like to require every one else's mortgage banker to be licensed under stricter laws. But the effect of these laws has been to signal that lending is to be restricted, and it is, and that is leading to difficulty of sellers finding buyers.

Undoubtedly, as the STrib stories tell you, there are stories of fraud (by sellers) and greed (by buyers). At least one of the buyers in today's story is holding on to his underwater properties because "if I can't get rid of these for a profit in five years, then I'm in trouble." There's enough blame to go around many places. But the value isn't imaginary. That area will eventually fill in. Cleaning up after this episode will mean that takes longer, as some land and housing is misallocated and the government continues to impede the unwinding of those positions. But it will unwind.

The STrib indicates that tomorrow's article will include the response of area cities and townships.

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Genorisity and OPM 

A local DFL activist and Wellstone! award winner writes about the Democrats she knows as being charitable:

The Democrats I know live and promote the value of personal responsibility. They believe in hard work, honesty, persistence and self-reliance.

But the Democrats I know also understand the value of social responsibility.

They know that there are many areas such as transportation, public education and police and fire protection where responding as a community for the common good is more effective and efficient than only responding individually.

I can't remember who said this last week, but it bears repeating: Do you ever notice that when liberals want to justify government spending they always go to transportation and police and fire? At least Pat includes public education, for which there are private substitutes. K-12 education in MN consumes 39.9% of a $34.5 billion state budget; public safety only 5.4%. Transportation comes out of a different fund. Tell you way, Pat, let's make a deal. You restrict us to police, fire and transportation and even K-12. How about that part called "health and human services"? Ready to privatize that?

But I digress. What does it mean for her to be socially responsible?

These Democrats also know that for many in our society, the playing field is not level, and that if we believe in our democratic principles, we must live the value of social responsibility.

The failure of a market-driven health care system is one example where all of this comes together.

Personal responsibility alone will not solve that mess.

When you hear "level playing field", what you should translate that to is "egalitarianism", and often we are talking about ex post egalitarianism. I have more than you, so that's not right. And there's plenty to that the person alone could do. Bob Collins notes that 87% of people in a survey by the Northwest Area Foundation said they agreed that "I would like to do more to help people struggling in my community", to which Bob wonders, well, what's stopping you?
It would seem that if the 87% who would like to do more, actually did more, then not quite as many people would be struggling. Armed with only anecdotal evidence, I'm going to theorize that 87% of the people are not going to do more and a sizeable number aren't doing that much now.

...A closer look at the survey shows that a large percentage said they would be willing to get together to talk about ways to help. Others said they would be willing to talk to an elected official. Seventy-eight percent said they would take part in a church project to help someone. A somewhat smaller group said they would adopt a family temporarily if they were struggling. About the same number said they would pay another $50 in taxes.

Times are tough for a lot of people, of course, but could it be different if we did as we say? As individuals, what's stopping us, aside from our belief it won't make a difference? And what do you consider to be a definition of doing something?
I suspect for most of them it's the opportunity to get together and talk about someone else doing something. Learned Foot makes the point well:
...why on earth would someone volunteer time, money and / or effort when they can just vote for [someone] who will make them feel as altruistic. The only effort required is 5 minutes at a polling station, a pull of the lever for your local machine Democrat, and then you can go forth and proclaim to the world how compassionate you are. Giving feels good. To the feeble minded and selfish, feeling like you gave while doing nothing feels just as good.

And let's face it: in most cases that compassion is going to be extracted forcibly from someone other than yourself.

The takeaway from all this, I think, is that people are well-meaning, but lazy.
We refer to this as "self-interest", Foot. And the statements like those of Mrs. Welter are simply "cheap signaling". Anyone can be generous with OPM: Other People's Money.

Mrs. W then doubles down by assaulting the church-goers while reviewing the evidence of Arthur Brooks' study Who Really Cares?:
Conservative people are a percentage point or two more likely to give money each year than liberal people, but a percentage point or less likely to volunteer. And while conservative people do give more to charities and churches, when religion is factored out, charitable giving between liberals and conservatives is not distinguishable.
This shows only the most shallow reading of Brooks' work. He notes that religious people are more charitable towards non-religious charities than the secularist population. "A religious person is 57% more likely than a secularist to help a homeless person," he writes. And the last sentence seems to suggest that the only thing a religious person gives to is a church, and thus for reasons involving his or her own salvation, not to help the poor. There's nothing about conservatism or religiousness that would necessarily encourage one to go to the Red Cross, but according to Brooks' estimates, the amount of blood banked in America would rise 45% if liberals gave blood as much as conservatives do.

If they ever figure out how to tax blood, Heaven help us!

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Sunday, April 20, 2008

Bumper Stickers, DFL Style 

This afternoon, which is totally gorgeous, I was driving to meet a friend for coffee. The mini-van next to me had three political stickers on its rear bumper:

Klobuchar - DFL Senator elected in 2006
Sarvi - DFL candidate to take on Congressman, John Kline of MN's 2nd Congressional District

and the winner...... Bush Must Go.

Don't know about the awareness of the van owners but Bush has less than nine months, by law.

Oh, well.....


Saturday, April 19, 2008

More Photos from the Tax Rally on April 12 

This post covered the tax rally held at the Capitol in St. Paul, MN on April 12. I've included a few more photos, some on topics not directly related to taxation.

There are a number of people beginning to question the global warming mantra which has morphed into climate change. (see this post). It will again morph to something else after this year's election, depending which party gains control. We know humans have adapted in millenia past and we can again, with the right focus. Here's my question to those of you who wish to criticize those of us who remain skeptical about the sky is falling mantra of the leftist global warming crowd.

After spending all this time, money and effort trying to brainwash our kids to thinking the earth will be destroyed with global warming/climate change, how are you going to answer your kids when they find out what they've been taught is fear, plain unadulterated fear? How much credibility will you have with the next fear-mongering crisis?

Or maybe this explains why people get more conservative by the time they hit 30 - they realized so much of the fears they were taught as kids are not real.


MAS annual dinner 2008 

The MAS annual dinner was attended by about 50 supporters. I saw a few people I haven't seen there before, like John LaPlante and Mitch Pearlstein, and some old friends who I normally get to see did not come this year. And of course the usual people who read here and are fans of the NARN; on behalf of the entire show, thanks for that.

Two students received awards for supporting rational discourse on campus. One was Amy Ledig from Macalester, who wrote a brave column against the creation of "gender-blind" bathrooms in the school's dorms. The other went to Rachel (? I missed the first name) Zeman from St. Catherine, who is also getting Star Parker to come to St. Kate's, with less folderol than her appearance at St. Thomas.

Peter Wood then gave his talk as I mentioned yesterday. He divides the aspiring reformers of higher education into two phylum -- those who would reform from within, and those who have the attitude of "let it burn". Once again, he argued that more conservative economists fall in the let-it-burn camp. I argued instead that some upheaval is needed to free resources for reform efforts, so some schools will in fact fail. But that should not be interpreted as burning down the house. It's renovation, just that it's renovation more than refinishing cabinets. Install new rooms, take out old. But the structure will still be there.

The resolution of this did not strike me as being at all radical, and I do not know how Wood sees the institutions resolving their fundamental issues. But clearly his vision is for internal reforms.

The group was apprised and afterwards concern was expressed over the coming crisis in student lending. That's worth a separate post, but consider this a teaser.


Friday, April 18, 2008

Walnuts in a game of marbles 

Janet and I will be at the MAS annual meeting tonight. Its feathered speaker is Peter Wood, the national association's new president, who was recently at the APEE meeting.
I rather suspect I am the only member whose academic credential is a Ph.D. in social anthropology. I joined APEE to attend its annual convention, held this year (and most years) in Las Vegas. And I stood out like a walnut in a game of marbles. Economists, at least APEE-style economists, speak a language of efficiency. The goal is to figure out how to conjure human behavior from a parsimonious set of premises. If all goes well, the marbles roll smoothly. Anthropologists, by contrast, spend their time examining the rough texture of human affairs, delighted if a pattern emerges from the crisscross purposes of culture, but never expecting it.
Brother Wood, welcome to my life in MAS. I have yet to meet a fellow economist in the group, and suspect I won't. Perhaps it is because the "parsimonious set of premises" we use, while allowing for the average economist to be a moderate Democrat, doesn't have people working daily in departments with people who have surrendered reason to emotion. There is no such thing as "post-modern economics" and I believe there never will be. So when I go to MAS or other such organizations, it is often to hear of departments and university administrators that seem to me a fiction.

Wood challenges me:
At least to me as an outsider, the participants in the APEE conference seemed quite frequently ready to put paid to ideas they found fallacious�simply by pronouncing a logical refutation. I tried without success to detect a spirit of combativeness that would carry the fight further. When I pointed out that Arizona State University had established a degree program in Sustainability and had appointed several economists to its faculty, an economist complacently replied, �But they aren�t in the Economics Department.�

That was a revelatory moment. I suppose all academics perform with a particular peer group in mind: a body of experts whose good opinion matters more than the views of other scholars and intellectuals. APEErs seemed to draw that circle fairly tightly.
But it's not just the more Austrian economists that do this. Where economists do participate more broadly in the life of the university, they are either the 5% of economists who are leftist radicals or someone who decided to chuck the whole notion of academic life and pursue administration. There was a sharp undertone of "told'ja so" to Larry Summers demise at the hands of the feminists of Harvard from his more academic economics brethren. (Oh yes, and "sisteren".)

But the language and culture of these Scholar meetings -- which I started attending around the time this blog was formed, and from which the blog's name is drawn -- are very different from the language of the meetings I attend with fellow economists. I just came back to home from a seminar in which a colleague (who reads here I believe) tried to analyze why movie studios keep making R rated movies when it's G-rated movies that sell well. The answer tends to have more to do with what foreign movie-going audiences purchase: they want Pulp Fiction, not Return of the King. Any talk of why they want that is not part of the discussion, as preferences are taken as a given. It's where we economists stop and where the anthropologists begin.

And I usually stay in my place, except for one night of the year. Which is tonight, so off I go to be a walnut.

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Italian Pesidential Elections 

You haven't seen much of this in the main stream press but Italy is the 5th European nation to elect a prime minister who is friendly to the US in the past three years. Did we change leaders? No but the Europeans realize what is at stake. Berlusconi was elected Prime Minister of Italy last weekend - overwhelmingly. The Greens and Communists are out, as in gone, as in no influence, the first time since the end of WWII. Italy is on its way to a two-party system.

Five of the six biggest nations in Europe now have elected leaders who are supporters of the US: (Germany, 82,000,000, Angela Merkel); France, (62,000,000,000, Nicholas Sarkozy); the UK (59,000,000, Gordon Brown); Italy (57,000,000, Silvio Berlusconi); and Poland (39,000,000, Lech Kaczynski). The only outlier is Spain, (40,000,000, Jose Luis Zapatero), in which the mishandling of the Madrid bombings three days before the 2004 election led to a swing to the Spanish Socialist Workers Party.

Why won't we hear much about these successes? Oh, the mainstream media doesn't want us to know - they might have to admit that the USA is not the big, bad ogre they would like to make us out to be.

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No tag, no dodgeball, no running, no playing, etc. 

Kent Gardens Elementary school in Fairfax County, VA has banned tag on the playground announced principal, Ms. Robyn Hooker (why am I not surprised?).

She made her decision because the game has gotten out of hand. This refusal to let kids play because: someone might get hurt; someone plays too rough; someone might lose; etc. is the result of a catch-22 situation educators and parents have developed in the last 35+ years.

Over the past decades, when parents with the perfect child were told their child misbehaved, they began accusing teachers and school administrators of picking on their child. They threatened to sue the school system. The schools, wanting to avoid costly lawsuits, began hiring risk averse administrators, people who would find a way to avoid any conflict with parents, etc. The "perfect" Johnny or Susie learned that his/her parents would excuse their actions and behavior just got worse. Parents abdicated any responsibility for poor conduct by their kids.

Couple this avoidance mentality, "It's not my kid's fault" with the "nobody can lose" mindset, we now find ourselves in a situation where schools cannot discipline and kids can't play at recess anymore. They can't run, can't play ball, can't play tag - just tell me, what is a young child with energy to do? Oh, we put them on Ritalin. Excuse me people. Our schools need to be able to set behavior standards (not feel-good, nobody is bad pabulum) and be able to punish kids who go too far, then provide an environment where normal active kids can run off steam.

Active girls need recess but boys even more. They must be able to release energy, not be drugged to the point where they are zombies. I taught 4th, 5th, and 6th grades for nine years. The real fidgety ones were given extra classroom space. Recess provided all kids with a means of letting off steam and made it much easier for them to concentrate on academic matters.

Heck, if we let kids be kids but give them boundaries and enforce the boundaries, we might even be able to extend the academic school day because we could teach more.


Thursday, April 17, 2008

Another day, another radio 

I will be filling in tomorrow morning for Dan "The Ox" Ochsner on Newstalk 1450 KNSI, 8-11am. Live streaming (but no podcast) available from the link. I will be with Dan's usual co-host Mike Landy; we anticipate a discussion starting at 9 about government waste.

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Tale of two graphs 

The first was a picture Krugman drew yesterday of median family income in the Midwest vs the rest of the nation:
The other comes from a 2006 Midwest Economy entry from the Chicago Fed:I'm going to say those two are related. Is it any accident that the convergence of the midwest's median income the the nation coincides with the beginning of the slide in manufacturing? The question is, what can be done about it?


STC home prices down 12% in a year 

From this morning's St. Cloud Times,
Local single family home sales were down 4 percent in first quarter 2008 compared with first quarter 2007, according to data released this week by the St. Cloud Area Association of Realtors.

That's a slightly larger drop from last year around this time, when first-quarter home sales decreased 1 percent from first quarter 2006.

Local home sale prices have dropped almost $20,000. The median price of a home was $143,000 in first quarter 2008 compared with $162,650 in first quarter of 2007. And the average number of days a home remains on the market is now 111, according to first quarter 2008 data. That's six days longer than first quarter 2007.
Here's the sales report. Homes were discounted more than $6000 from their listing prices, and 13% fewer homes were listed in the first quarter of 2008 vs first quarter of 2007. It appears the mix of homes sold had something to do with the downturn, as single-family home prices fell 10%, but more condo, townhouse and patio home sales occurred this year than last.

Meanwhile, local gas prices hit a high. It happens every spring, as we change blends for the Clean Air rules, but it's hard to argue with $115 oil.

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Media alert 

I will be on The Ed Morrissey Show around 2:30p CT. Click the link to see the show at that time (if you go early, you get nice pictures of Michelle Malkin, hardly a bad thing.) Of course, by 2:30 everyone will have turned away from the show after the distaff half departs.

Listeners to our segment will hear me talk again about this post from yesterday on the trade positions of the candidates.

Wednesday, April 16, 2008

Media alert: Outside the Beltway radio 

It will be my pleasure to join James Joyner on Outside the Beltway Radio to talk about the three presidential candidates economic plans tonight at 6pm CT. I'm also n Hot Air tomorrow at 2:30 with Ed Morrissey but I don't know that that will be the topic. Separately link for that tomorrow.


Governance stuff that makes me think harder 

I've mentioned the book, which on Monday got its cover design (thank God my co-editor is a visual thinker). I'll reveal it when we get back the mock-up in a month or two, because I think it's a neat idea that Bryan had. My role was "looks good!"

One of the chapters is on the various ways in which we measure governance and what these mean. A basic theme of the book is that the measurements are amalgamations, atheoretical and often ill-considered. Measuring governance seems to be one of those areas.

So two posts around a World Bank conference this week got my attention. First, Larry Summers is provocative:
Mr. Summers�s predecessor at Treasury, Robert Rubin, ventured that �effective government� was the key for growth. But Summers wasn�t buying that one either. Government are often seen as effective because the countries are growing fast, he said. Then when they stop growing, the governments are dismissed as lame and corrupt � Indonesia under Suharto, for instance.
The first three words out of my mouth were "Lee Kuan Yew". How does one classify Singapore's governance? If you say "must be good, look at its growth", Summers is right. If you say "horrible, it's authoritarian", you have a harder time making the link between governance and growth. Take a sheet next to your desk and write a 2x2 matrix. Along one dimension write "growing" and "stagnant"; along the other write "good governance" and "poor governance". Pick about 20 countries at random and put them in one of the four boxes based on what you know. Now since many readers will know some economics they probably get the growth/stagnation classifications roughly right. But watch how you decide the governance question.

At the same conference I think, and somewhat relatedly, the maddeningly brilliant Dani Rodrik writes,

So good governance is both an end and a means. It is a key goal of development, broadly construed, and it is also an instrument for achieving better policymaking and improved economic outcomes. Any sensible discussion of governance must be clear about the distinction. And it must clarify in which of these two senses governance is �the problem� we are trying to fix.

I make the following points below. First, economists have very little useful to contribute to governance-as-an-end. Second, while they have more to say about governance-as-a-means, what they do say is often not what they should say. Where economists can be useful is in designing institutional arrangements for specific policy reforms targeted at relaxing binding growth constraints--what one might call �governance in the small.� This agenda differs quite a bit from the broad governance agenda on which much ink is being spilt. And third, there are sometimes tradeoffs between governance-as-an-end and governance-as-a-means which policymakers and advisors need to be conscious of.

I have to read the paper to see what those tradeoffs are, but I'm going to guess that they relate to Summers' observation.


Where the candidates stand on free trade 

Cato's Center for Trade Policy Studies has a neat tool that looks at the voting records of Congresspersons to determine their stances on trade issues. It's neat because it divides their records between votes for trade barriers and trade subsidies. Those voting for low barriers and no subsidies are free traders. There are those who are for low barriers but subsidize domestic producers -- these are classified as "internationalists" and not free traders. I have written down the results for the three presidential candidates remaining, plus for Senator Norm Coleman:
Wellstone! by the way was the closest thing to an isolationist as we've had.

P.S. This opposition to trade subsidies should also be applied when thinking of tax breaks to dissuade airlines from taking jobs to other states. Use of the public fisc this way is a lousy deal for both small airports and large. It's all the same logic.

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Franken, spending your money on the union man 

Al Franken thinks your stimulus check is a mistake. I could buy that, if he was going to say that it just implies higher taxes later so it won't really stimulate. But no, that's not what he's saying.
As he embarked on a tour of Minnesota focused on the economy, Franken said he was "not thrilled" with the $168 billion economic rescue package Congress approved in February.

While stopping short of saying he would have voted against the plan, Franken said he would have preferred more emphasis on helping states and municipalities move ahead with deferred repairs to highways, bridges and sewer systems.

"It would have the benefit of putting people to work, which is what you need to do in a recession," Franken told reporters at a state Capitol news conference. "And it would have the added benefit of actually repairing some infrastructure, which is also good for our economy."
Dollars spent put people to work, but dollars drained to pay for those workers puts other workers out of work. Which ones does he favor? The ones that are in the construction industry. These are both temporary jobs and they are unionized. Those ads playing on Twin Cities television right now blaring how good unions are for us all, are the friends of Al Franken.

Which makes him not the friend of those of us who have to pay those workers.

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Tuesday, April 15, 2008

What are St Thomas' attitudes on freedom of thought? 

After reading Mitch's excellent summation of what's going on at St. Thomas with its insistence that the Young Americans Foundation cannot bring Star Parker to its campus (and follow the links to Ed and Scott Johnson while there), I decided to peruse its website for comments on freedom of inquiry. Since that freedom accords first to the pursuit of the truth by its faculty, I thought to look at its statements on faculty. (In fact, as part of my assignment to a campus committed on academic freedom, I had already bookmarked this page.)
Freedom of inquiry and freedom of expression are safeguarded by the university. The rights and obligations of academic freedom take diverse forms for the students, the faculty, and the administration; in general, however, they derive from the nature of the academic life, and they are consistent with the objectives of the university as a community which pursues the highest scholarly standards, promotes intellectual and spiritual growth, maintains respect for individuals as persons, and lives in the tradition of Christian belief.

Specific principles of academic freedom supported at the university include: freedom to teach and to learn according to one�s obligation, vision, and training; freedom to publish the results of one�s study or research; and freedom to speak and write on public issues as a citizen. Correlative obligations include: respectful allowance for the exercise of these freedoms by others; proper acknowledgment of contributions made by others to one�s work; preservation of the confidentiality necessary in personal, academic, and administrative deliberations; avoidance of using the university to advance personal opinion or commercial interest; and protection, in the course of one�s conduct, utterances, and work, of the basic aims of the university and of its good name.

Emphasis added. I don't see anything in that statement that addresses the administration's comfort level. It is interesting to me that the university's Women's Center sees itself as having a role for creating "unruliness", its speakers policy is said to require responsibility:
The first principle is that there are varying degrees of responsibility with the effect that the university is eminently responsible for speakers that it invites on campus to speak to students or other members of the community. But obviously when the university allows legitimate outside groups to use its facilities, the burden of responsibility is autonomous with the sponsoring group. It is a corollary that the university, in allowing such groups to use its facilities, is governed by fairness and equity toward various conflicting views and interests, being mindful of the needs for wider information on the part of students and the larger community.

The principle of freedom, holding high respect in academic life and in our spiritual heritage, is never divorced from responsibility on the part of sponsoring groups or sponsors.
Do these statements reflect to you a commitment to freedom of inquiry? Do they reflect a mission statement that says the school values "intellectual inquiry as a life-long habit, the unfettered and impartial pursuit of truth in all its forms, the integration of knowledge across disciplines, and the imaginative and creative exploration of new idea"? It is a very audacious use of the word "unfettered." Those who would send their children to UST should consider what will fetter their education.

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The simpler the tax, the less the power 

Responding to something I said on air Saturday, Speed Gibson wonders why we don't have a simpler tax form for state income taxes (perhaps x% of the federal taxes paid.) The answer is quite simple: To do so means that the Legislature forgoes its ability use the tax code to favor its political supporters and harm political opponents. Filling out my own last night I noted the various credits offered for certain kinds of expenses. Luckily I have a child in a private school; I make too much to get a credit for that, but I do get a deduction. That tax policy makes it cheaper to send children to private schools, or to piano lessons, or for public schools to shield the cost of its extracurriculars from taxpayers. In Minnesota as much as any state, taxes can be much more burdensome if you don't spend your income in the ways the legislature has decided is socially desirable.

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Stalkerazzi to the left of me, stalkerazzi to the right, here I am 

Most regular readers know I do not do many national political issues on this blog. It isn't for lack of interest, but there are so many other blogs out there spending more time doing that, that it doesn't seem a good use of my time. Economic issues and state/local politics are more my game.

But there are times where they coincide, and the story of using what a politician or elected official in a private function for the purpose of either embarrassing them or trying to catch them saying something that can be used against them is playing right now at both a national and local level.

You'd have to live in a cave not to have heard by now of Barack Obama's comments about the motivations of people who carry guns or are religious. And if you recognize the term I used in the title of this post, you probably are aware of the use of videos and PhotoShop to try to humiliate local elected officials, most notably Rep. Michele Bachmann. The natural reaction to me of both campaigns is to do a better job of controlling the environment in which the politicians speak.

In Obama's case there was the belief that the environment was controlled. The event was a $1000 per person event, and the attendee who reported the story had been a supporter (though, in fairness, we note that some claim her support was false.) She had recording equipment and, in a group that was supposed to be full of supporters, she heard something that got her to post something that might cost Obama the election.

I wonder if the supporter with the recorder was instead a reporter at the St. Cloud Times. The reporter sent to cover the Sixth Congressional District GOP Convention had been told that no video or audio of the event was to be allowed. As John Bodette, the paper's executive editor, relates the story, this was just another skirmish in the "battle in our effort to cover news."

In today's media world, reporters can do their work using more than a notebook and pen. Our staffers can cover a news story with words, still photos, audio and video. These restrictions on what equipment reporters can use is an abridgment of the journalist's effort to cover the news.

The reasons for the audio/video ban are baffling.

It appears that Rep. Michele Bachmann, the Republican incumbent, has shown up in several videos in less than flattering ways because people altered the video. To avoid giving people more fodder to make fun of the first-term House member, the district's executive committee decided to block any audio or video from the convention sessions.

The committee also decided to bar video and audio because more than 90 people were scheduled to go to the microphones and speak during the endorsement sessions, Swanson said. Some of those people may have been nervous and said things they later regretted, Swanson said.

He compared it to a family picnic. And you don't want news cameras showing up at a family picnic, he said.

I consider the editorial staff at the Times to be friends, but I am troubled by this editorial. Let's take note first of Bodette's use of the word "can" in how Larry Schumacher "can do his work" in covering the convention. He was a witness; he wrote columns and his blog. He was just told one of the tools that he might use to cover the convention was not to be used. That might have made his job more difficult, but it didn't make it impossible, obviously.

Second, and perhaps more important, is whether it is healthy for the political process to have the space in which it operates continually shrunk, invaded by cameras, recorders and live feeds. The Times has made it a habit to complain about private working meetings of the City Council. I can see the point that when a government is sitting in deliberation doing "the work of the people" (or is that "working the people over"?) that the Fourth Estate might think it should be able to provide coverage. But a political rally or a party convention not only is not a deliberation over the use of force, it is in fact part of another part of the First Amendment, "
the right of the people peaceably to assemble." The question is, is that right subservient to the First Amendment rights of the press?

And note again, as John does: Unlike the deliberations in working meetings of the City Council, the entire convention was open in plain sight to Schumacher. The comparison is terribly strained, and quite misleading. (See update below)

If the claim is that public officials will speak in this private group and that their publicness makes their speech "a news event," then where stands the line that allows the governor or the senator the opportunity to speak privately with supporters? Does the representative have the right to sit in a public restaurant with three friends who also contributed to her last election and say to the person from Dump Jane Doe that "this is a private conversation"? If they said you could take notes but no cameras, would this warrant a vituperative editorial from your boss?

John Bodette acknowledges that he has no legal claim to access, but says that because it's a news event, the paper should be able to cover it as it sees fit. He makes a statement asking whether Rep. Bachmann "supported the decision" to ban audio and video. Why should she or any one else give up their protected right to assemble peacefully, and why should a newspaper decide it can interfere with that decision simply by calling it a "news event" and insisting to bring in whatever equipment it chooses?

John notes at the end that the DFL has invited his cameras and audio into their district convention. Nice bit of advertising there, and nice bit of gamesmanship by the party. I don't necessarily agree with the CD 6 GOP decision, but it's their right to make it, and a statement of the sorry state of decorum that has come over political coverage of some political candidates. Maybe the question the print media needs to ask itself is whether it has become
"the man who could look no way but downward with the muck-rake in his hands; who would neither look up nor regard the crown he was offered, but continued to rake to himself the filth on the floor." Because the others there with the cameras surely are, and sometimes they're even your supporters.

UPDATE: Larry Schumacher informs me that the City Council's working sessions are open to the public but were not broadcast like the Council's regular meetings. I will ask whether you could bring the video and audio equipment to it and posted the materials. I see no such recordings on the Times video site.

UPDATE 2: Larry points out they are sitting on the paper's opinion page.

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It's amazing what $100/bbl will do 

Brazil has discovered what could be the third biggest oil reserve in the world, according to the head of the country's National Petroleum Agency.

The deep-sea find by state-run oil firm Petrobras could yield 33 billion barrels in reserves.

Further tests are required to assess the scale of the find, off the coast of Rio de Janeiro, but analysts say it could have significant implications.

Brazil announced sizeable new gas and oil discoveries last year as well.
Source. It was once said:
The cause of these new discoveries, or the cause of applying ideas that were discovered earlier, is the "shortage" of copper -that is, the increased cost of getting copper. So increased scarcity causes the development of its own remedy. This has been the key process in the supply of natural resources throughout history. (...Even in that special case there is no reason to believe that the supply of energy, even of oil, is finite or limited.)


Monday, April 14, 2008

More moving vans 

From this morning's WSJ Political Diary, Stephen Moore writes:

Pooh-poohing the idea that low taxes and/or the job growth associated with lower taxes are important incentives to movers, the New Century Foundation cited several high-tax areas -- such as Washington D.C., Vermont and Oregon -- that have been attracting new residents. True enough, and another exception is North Carolina, which has a relatively high income tax and yet remains a destination state -- although North Carolina also has a smaller tax burden overall, thanks to low sales and property taxes.

Yet the general trend seems clear. The eight states in the continental United States without an income tax all gained population, even South Dakota. One of the few states in the northeast that has continued to attract people is New Hampshire -- a no-income-tax state. Indiana State University's John Tatom, a former economist at the Federal Reserve Bank of St. Louis, did more than just eyeball the trends. He applies sophisticated econometric techniques and concludes that tax rates do matter: "The in-migration rate is sensitive to the tax rate.... Each one percentage point rise in the tax rate will reduce the in-migration rate by 0.41 percentage points."

Tatom's paper is here. Below is the graph that displays the data with the trend line of -0.41%.
This should be used by our discussants from February on the relationship between state taxes and migration. Let me also add this fascinating State Demographer's Office report (the fascinating was a joke, son) which includes data of paired tax returns of in- and out-migrants to Minnesota. "Minnesota gains net migrants from most Midwestern states except Wisconsin. Other than Wisconsin, the biggest net losses between 2000 and 2005 were to Florida, Arizona and Texas. The largest net gains were from foreign addresses, North Dakota, Illinois and Iowa." The data would suggest to me that people leaving here are getting warm; we don't have data on age, but it's a fair guess, I'd think, that many of these are retirees.

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Global Warming? Climate Change? Whatever 

Using the gray matter between my ears, I observed that weather changes every day. Therefore, if weather changes every day and climate is weather over a long period of time, then I have concluded that climate changes.

Having made this conclusion, I would like to encourage those of you interested in climate, the weather, potential impact of a warming climate as well as a cooling climate, to attend a forum sponsored by The Heartland Institute.

Their program, "Understanding Climate Change," will be offered this Thursday, April 17 at the Elk River Senior HS at 900 School Street, Elk River, MN. Program begins at 7:00.

This is an excellent opportunity to get some facts to add to the plethora of hype that is being spread. We owe it to our children and grandchildren to make sure they learn what really is happening and what they can and cannot do. Continuing to frighten them is simply unhealthy.


Secrets of the Fed 

I had just finished writing a chapter on central bank independence when Bill Greider's Secrets of the Temple came out. People were shocked, shocked, to find out that Paul Volcker was running the economy. Volcker was a secret because, well, he decided to avoid publicity (even the Volcker report on corruption in the UN didn't do much for his visibility.) Having a visible central banker might draw attention to its status, I thought at the time. At that particular point, central banks were still musty old places thought about mostly by people who worked in them and a few Fed-watchers and other academics.

Now in that very same year -- as I was reminded yesterday, taking a walk and listening to an Econtalk podcast with Tyler Cowen -- New Zealand was fed up with its experience of high inflation. It had had what was the norm: A central bank that answered to its government, not subject to much outside scrutiny, designed to support that government in many ways. Through the 1980s it had an inflation rate greater than 10% per year on average. So it hires a governor for its Reserve Bank named Don Brash and says "get the inflation rate down to 2% and keep it there, or you're fired." Brash does the job until 2002 when he decides to go into politics. (I know very little about NZ politics, but it appears his run as RBNZ governor has been overshadowed by his political career, not necessarily for the better.)

As Cowen notes, people begin to look at New Zealand as an example and emulate it. The idea that central banks should be independent -- temples where the monks chant behind an icon wall -- gained hold. We monetary economists begin to talk about inflation targeting. And one by one, central banks begin to change. Whereas in 1989 there were only three central banks generally agreed to be independent -- the Bundesbank in West Germany, the Swiss National Bank, and the Fed -- there are now many more, leaving the Fed almost a laggard behind its ECB brethren.

Important to note, as I did in a forthcoming paper, is that where the New Zealand model was adopted you could not call those central banks independent. They have a contract with the government.

So what's better, a central bank that runs itself without accountability to the government but without any inflation bias, or a central bank that's dependent but with a contract that makes inflating the economy costly to both? I wondered that reading Robert Reich's rediscovery of the secrets of the Fed:
Five years ago the Fed decided to make money so cheap lenders shoved it out the door to anyone capable of standing up, and Alan Greenspan pooh-poohed the idea that regulators should be especially vigilant. What happened? We had a housing bubble, millions of Americans are losing their homes, tens of millions are watching their major asset (their home) drop in value and their pensions shrink.

So does this mean the Fed should be more accountable? Are its decisions so important that citizens have a right to more say in what it does? Problem is, most people don't understand what it does, and have no idea how it makes decisions. And partisan politics could do terrible damage. Yet we don't want the Fed to refrain from doing what it's doing. Paul Volcker to the contrary notwithstanding, government has to make sure there aren't runs on our banks and that our financial system is strong.

The first step in reconciling democracy with the Fed is for people to become better educated about it. Most Americans don�t even know where the Fed is located. (It�s on 20th Street and Constitution Avenue in Washington.) And most have no idea who runs it. (Besides the chair, now Ben Bernanke, are openings for six other members of the board of governors, each appointed for fourteen years. Five regional bank presidents join them on the Open Market Committee. Who appoints the regional bank presidents? If you don�t know, you ought to find out.) These twelve people have more power over your daily life than your congressman and Senator, maybe even your president.
Jim Hamilton wonders whether we have allowed the Fed too much leeway with the new lending facilities they have, which implicitly put the taxpayer at risk of holding some really lousy securities in return for the Treasuries the Fed is lending. And Volcker himself is suggesting the current occupant is dancing on the edge of the Fed's legal authority.

I don't know where the legal limit on what the Fed can do with its portfolio is or whether the Congress can order him to stop. But the Fed is a creation of Congress and, if Congress wanted the Fed not to make these alphabet-soup lending facilities, it could just introduce a bill to stop it. One thing to note is that when Cukierman, Webb and Neyapti coded central bank structures in deciding which ones might be more independent than others, there was a code for the width of borrowers that could borrow from the central bank. The Fed was shown to have the most narrow circle of borrowers -- only the federal government. But there are no limits on how much, or at what interest rate, or whether the Fed could lend in primary markets, who decided terms, etc. If the Fed now chooses to widen the circle of borrowers, there are many other types of controls that could be in place but which were never considered as I understand and remember the Fed's history. What Volcker and Hamilton would seem to assert is that the narrow circle is important for keeping a structure of the Fed that has independence. If that circle is to be widened, other changes to the Federal Reserve Act may be considered.

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Saturday, April 12, 2008

MN Tax Payer Rally - 2008 

To those of you outside MN, here's the background: in 2006 MN Republicans, along with Republicans across the country, decided to stay home and "teach the Republicans a lesson." In MN, that "lesson" resulted in the largest tax increase in 150 years, courtesy of our DFL (Democrat, Farmer Labor party). Today we held our tax payer rally at the State Capitol in St. Paul, MN. The politicians who understand that the answer to our concerns and problems are not more taxes also attended. Included in these photos are these politicians, ones responsible with OUR money, including:

John Kline, Republican from MN's 2nd Congressional District

Michele Bachmann from MN's 6th Congressional District
Barb Davis White (in black cowboy hat), Republican challenger to Keith Ellison from MN's 5th Congressional District

Their speeches were electric and to the point. Below are photos from the rally. Remember, the Dems in DC are bent on driving the US economy into the ground with their passed and proposed tax increases. The DFL in MN is bent on driving MN's economy into the ground with their tax increase and plans for more. These increases at the state and national level will hurt every American who works, every one of us. It's time to stop - enough is enough.

Today's crowd estimate was 5000-7000. I'm no counter on this but the photos show a LOT of people.

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Friday, April 11, 2008

Door cleaning 

Captain Ed wonders whether the office door at Lake Superior State is a story of viewpoint discrimination.

Now, these may not be the most edifying political cartoons ever printed, and not to everyone�s taste. However, they don�t have to be, either; they reflect Crandall�s taste and positions, which is why he posted them on his door. Lake Superior says the issue is that Crandall�s speech involves �religious minorities� � Islam � but that�s also a political topic of rather significant import. Does free speech end at religion?

If the issue was hostility, then Lake Superior needs more door cleaning than just at Crandall�s office. They have not asked other professors to remove cartoons from their doors � but the other cartoons have something else in common. Among those cited by Crandall and FIRE are anti-war and anti-�Big Oil� cartoons. One of the latter depicts the Bush administration as a lackey of the oil and gas industry.

In truth, the Crandall case does involve religion � the Religion of Liberal Thought. Academia apparently cannot abide any dissent from their received Wisdom, and so must strong-arm people with whom they disagree to prevent disagreement.
I have a different take on this than Ed, though I think we're largely in agreement. Universities are loath to offend anyone except the majority culture. Most signs are assailed by censors based on some charge of 'harassment' and that only those who are "not privileged" can be harassed. In Kors and Silverglate's The Shadow University, the administration of Penn explicitly uses the harassment criterion in attacking a guy who got woken up by noisy passersby outside his dorm window and told those "water buffaloes" to shut up. Bad luck for him, the noisemakers were members of a minority group. Rare is the day an administrator says that a controversial display or demonstration that makes a minority uncomfortable "promotes a health debate on campus."

LSSU is going to use its own harassment provisions to hang Professor Crandall, which allows them to slip by the First Amendment. Those provisions help the university maintain their view of a world defined by race. It's what allows doors that offend only the majority to remain in view, while those that might give offense to a minority are assaulted.


Choosy economists choose recession 

The latest WSJ survey of economic forecasters is out today and finds three of four economists are saying the U.S. economy is in recession, and almost as many say the bottom is yet to come.
When asked what the biggest downside risk to their forecast was, 35% said further deterioration in the credit markets, while 25% said it was a sharp drop in consumer spending and 13% said continued housing weakness.

...After three consecutive drops in nonfarm payrolls, the economists said they now expect the economy to shed an average 1,625 jobs a month over the next year. They expect the unemployment rate, now 5.1%, to rise to 5.6% by December. Meanwhile, just 21% of the economists expect home prices to hit bottom this year, while 67% see the bottom next year and 12% say it won't be until 2010.

The respondents on average expect U.S. gross domestic product, which grew at a slim 0.6% annual rate in the fourth quarter, to expand by an anemic 0.2% in the first quarter and 0.1% in the second, followed by a 2.1% increase in the third quarter. Most of the economists said they expect a contraction in the first half, but those expecting growth pushed the average into positive territory.

Consistent with their view that the economy will hit bottom soon, the economists said they expect the Fed to trim its benchmark federal-funds rate by another half percentage point from the current 2.25% by June -- and then to keep rates unchanged for the rest of the year.

I cannot figure from the graphs a median on the quarterly GDP forecasts, but the report indicates they are negative. Dan Laufenberg of Ameriprise has a forecast of 3.6% growth in Q2, a full percent higher than any other forecaster. (Dan is a frequent panelist at the St. Cloud Area Economic Outlook each February, but missed us this year due to a pressing engagement elsewhere.)

If someone asks me if the national economy is in recession, my answer is "I think so." There are some looks at me that suggest they think I'm hedging -- surely you've heard the news today oh boy, the story of an economy that's tanking. And the Fed! Oy vey! But the truth is we don't really know and don't have a negative GDP quarter yet, and we might not. I'm persuaded by the monthly data, but until we see the Q1 figure at the end of the month a small amount of doubt must remain.

That the survey showed little concern over inflation gives some reason to think that, if the economy looks a little worse than we currently think, there's at least a couple bullets left in the Fed's holster. I'll use a separate post to discuss the criticism the Fed's getting right now.


Why teach growth theory? 

Recently John Palmer and William Polley and others debated whether the Solow growth model was a good subject for teaching macroeconomics. When I was in grad school, the first half of my second macro course consisted of working through Solow's monograph (and Harrod, and Domar.) And while so much of the rest of our macroeconomics textbooks have changed, the basic Solow model sits there almost untouched (some books will have some Romer at the end, like an appendix that can be removed just as soon as that goes out of fashion.)

The reason to teach it, I think, is simple: Growth is just too damn important to be pushed aside in an intermediate textbook. As Romer says here, possibilities don't add up, they multiply. Why they multiply is what students should learn. I often use Easterly's Elusive Quest for Growth with this because Easterly's organization is very close to what John says is the problem with Solow -- it doesn't tell us much. But it does help us shoot down some bad ideas in development, like project aid and population control. It makes you focus on the A in AF(K,L) and get away from the K and the L. The property rights, entrepreneurial culture, the transactions costs, the quality of government -- those are all in the A. That's where the action is, and you can use Solow to get you there.

Bill and I teach that section of the course in roughly the same way. I've pretty much given up the golden rule portion of Solow (like anyone ever made policy that way!) and Harrod and Domar are gone completely, but it's an easy entrance to the good stuff, until someone makes a better one.


It's Minnesota. It snows 

There's approximately ten inches on the ground here today. The university chose not to cancel classes today, though several other colleges and most school districts did. It made for great hilarity to watch the campus email list burst to life with complaints about coming in and faculty canceling classes, etc.

A significant number of faculty, perhaps more than 10%, live in the Cities and drive the 70 miles to St. Cloud to teach. About the same number of students do as well; many others come in from the north, west and to a lesser extent the south. Unlike many places, we have our own meteorologist on staff (a delightful guy, fellow Boston sports fan) who provides to the public information used by the university in its decision whether to close the campus.

So there are two types of errors you can make. You can cancel school when it isn't necessary, and you can not cancel school when you should have. Your goal is to minimize the sum of the two types or errors. The faculty and staff, of course, prefer to close school. What about students? Some will already be here, in the dorms and living in nearby apartments. They lose a class if you close. Some additional students who did not look for a closure message will get in their cars and begin driving. The faculty from the Cities who came this morning said they had no idea it was bad here because I-94 was fine until the exit before the university exit ... at which point it went from clear to crappy without any intermediate conditions. The students were probably already coming here.

I've been here when they close the campus (for at least night classes) and you always see students who didn't get the message. And for them, a night class is once a week so canceling one is a significant part of the course. Do their costs count in deciding how to minimize both types of errors? Faculty and staff aren't the best judges of this -- they are much more vested in one type of error than the other.

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Follow-up on CD 6 dust-up 

It had seemed to me, after my post last week about the decision whether or not something untoward had happened at the CD 6 GOP convention, that the wording of the questions would be important to know. I have confirmed these with district chair Mark Swanson, who spoke with me by phone this morning.
  1. Are you a Republican?
  2. Will you support John McCain at the Republican National Convention?
The email I got on this confirmed that wording and had an explanation:
...what does that mean?...It means that everyday at the convention you will be supporting Senator McCain. Additionally, I discussed with Dan [Nygaard, nominations committee chair] and he said he took time with every person that gave any sort of a qualifying criteria, that is why some people were listed as "no" or "maybe" and were given the opportunity to correct the print-out (what was displayed on the screen).
Swanson said paper copies were handed out because of the changes made on the fly, and I'm expecting to receive one later today. The screen, he said, may have been hard for district delegates to read. All of the delegates elected answer the questions "yes", and none were reported to have changed their answers or stated they were uncertain until after the election, when the motion was made to bind the delegates to vote for McCain to what they told the nominating committee and what was reported to the delegation. (UPDATED: I've changed this passage based on an email from Andy Aplikowski, who made the motion. He also notes that nobody answered the first question as a no or a maybe. Thanks for the correction, Andy!)

I am hoping to get someone from the Ron Paul campaign to tell me whether or not they have the same understanding of the events. Swanson said to me that he had no problem with slates of delegates, but that they are the responsibility of the presidential campaigns, not of the district leadership. He also thought the meaning of the questions asked were clear, and that the answers of those elected were untruthful. There does not appear to be anything in the RPM constitution that I am aware of that would allow one to unseat those delegates, but I think it fair to question the candidacy of someone willing to use such tactics to get themselves heard at a national convention.

One must wonder how the RPers would feel if the roles were reversed. Given their state co-ordinator's statements last July that they would not support Rudy Giuliani for president if he won the primary, and where one says
If the Republican Party is so, um, flexible as to nominate a statist, then certainly the voting public is within its right to enjoy its own flexibility...
and who thinks "the GOP must lose" because of its pro-war candidate, did they actually correctly answer the first question?

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Thursday, April 10, 2008


On October 25, 1986, the Red Sox stood at the doorstep of championship. In St. Cloud, a young man stood at the bar of the Americana Inn and, as the bottom of the 10th inning started, leaned over to the bartender, who he knew from the local university, and said "we're about to witness something special." Calvin Schiraldi got the first two outs and the young man said "let's make sure everyone in the bar has something to drink to salute the Sox if they win." Almost immediately the man, young but first steeped as a lad in the Red Sox during the Impossible Dream season of 1967, knew he had done something wrong, as Schiraldi gave up two hits.

The rest of the story you know. Bob Stanley came in, dueled Mookie Wilson for ten pitches, and then got a ground ball that looked like an out. Except it wasn't. It went through Bill Buckner's legs.

The scorn heaped on Buckner by bitter Red Sox fans is of course legendary. (My favorite story is the person who tied a baseball to a string and the string to his back belt loop and wearing a Sox jersey went to a costume party. When asked who he was he bent over and looked between his legs and announced he was Buckner.) Buckner apologists insist that the fault laid at the feet of manager John McNamara for not pulling the injured Buckner -- he had had a horrific post-season due to his bad ankles, and Dave Stapleton was on the bench specifically for replacing Buckner in the field and was available -- but few will note that the Red Sox still had a Game Seven, where Schiraldi gave up a bomb to Ray Knight that broke a tie in the seventh inning.

But it wasn't Buckner's fault. He didn't buy the drinks in the bar in St. Cloud. (A few years ago Michael Keaton was in a movie called Game 6 as a playwright missing his opening night to watch that game. I ruined it for him too.) And he didn't hang a slider to Ray Knight.

Buckner has had real difficulty coming to grips with the angst of Red Sox fans over that night, As most will know, he went to Idaho and didn't talk about the event for years. Even when he started signing photographs on tour with Wilson, he would not discuss the night, or the reaction of the fans.

Until Tuesday, when after the World Championship rings were handed out, the first pitch belonged to Billy Buck:

After all the ceremony, the handing out of rings and hoisting of the championship banner and introducing of Patriots, Bruins, and Celtics legends, there was Buckner walking out from left field to the mound. He walked slowly, perhaps a remnant of those aching ankles and knees that marred his career. And as he walked, the fans cheered.

They stood, their ovation carrying him from the outfield through the infield to the mound, where he acknowledged them and clapped. They stood after that, still cheering, as he looked around, as he readied himself, as he threw a strike to Evans at home plate.

"Just seeing him walk out, I couldn't have been happier for him," Evans said. "This guy had tremendous numbers, total stats, and I don't even know if he got a couple votes for the Hall of Fame, which I really think is a shame.

"No one played harder than Bill. No one prepared themselves as well as Bill Buckner did, and no one wanted to win as much as Bill Buckner.

I saw him at the Metrodome once after 1986. He was with the Royals then, and as he walked to the plate I felt myself first getting a little angry, the frustration of the '86 Series still right there below the surface. Glad I was in Minnesota, where you don't boo players much. That probably kept it in check.

He grounded out, laboring up the line, running it out even though at his age and in his hobbled state it would have been fine for him to trot 50 feet and turn right to the dugout. But no, that wasn't the right way to play. He played the right way. He always had played the right way.

And one young guy from St. Cloud stood up and clapped.

And silently apologized for buying those drinks.

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Wednesday, April 09, 2008

Minnesota rich or poor 

Arthur Laffer and Stephen Moore have issued a study through the American Legislative Exchange Council on which states are rich or poor. Minnesota ranks 26th for 50 states for economic performance and 35th for economic outlook. Performance is a combination of income and employment growth plus net domestic migration. Outlook is a "forward-looking forecast based on the state�s standing (equal-weighted average) in the 16 important state policy variables." The study runs through 2006. Minnesota fares worst in corporate tax rates (45th of 50), rising tax burdens (43rd), and marginal personal income tax rates (39th). So far, it doesn't appear those numbers have been changed so perhaps backsliding in other states will improve Minnesota's score for 2007.

The report emphasizes that progressive personal income taxes exacerbate the cyclicality of state revenues. During booms, the states spend too much:
The analysis and case studies discussed in this chapter have shown that states often find themselves in fiscal trouble because they spend far too much during economic expansions. They are like the scorpion that is carried on the back of the frog across the river that then stings the frog causing them both to drown. �Why,� asks the frog in his dying breaths. �I couldn�t help myself,� responds the scorpion. �It�s in my nature.� It seems that overspending when the coffers are flush is in the nature of state legislators.

The most advisable path to avoid future fiscal crises is to keep spending and tax receipts at a manageable and justifi able rate, usually population growth plus inflation.
Minnesota's population grew faster than the national average between 1992-2000 (10% vs. 8.8% nationally). The additional families created demand for government services but also more revenue. Their analysis suggests the state received a windfall of $701 in revenue per person, above and beyond the revenue needed to keep real per capita tax revenues constant. Only three states had higher "excess" revenue taken from taxpayers: Michigan, Vermont and California. For the country as a whole, state tax revenues above inflation and population growth rose $108 billion between 1992 and 2000.

As Governor Pawlenty and the Legislature both look at tax reform, these trends should be considered. Laffer and Moore are fans of the Colorado tax limitation amendment (TABOR) which may not fly here. But weaning government off its addiction to income tax revenues does provide a more stable tax revenue stream. Now would be a good time to start.

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More on that real estate survey 

MN Chair in Real Estate Steve Mooney sent me a copy of his report along with the press release that surveys graduates of his program to determine conditions in the real estate industry as discussed earlier. The survey was of 141 graduates, with 42 of them having three or fewer years of experience. Here are a few interesting tables:

Table 1 � How Do You Rate the Market?








Very Good
























Property Management





Property Management





Mortgage Banker





Mortgage Banker













































That is as telling about the movement in the market as anything we can publish. In particular for mortgage bankers, the market is grim. When asked whether the respondents see themselves in the same business five years from now, here are the percentages who said "yes".

Table 2









Prop Mgt



Mortgage Banker









29% of respondents see the market improving in the next 1-3 years and 13% think it will get worse. (The rest believed it would "stabilize" -- at what level? I don't know.)

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Another office door controversy 

This time, it's at Lake Superior State.
Crandall has adorned his office door and the wall near his office primarily with conservative political cartoons and postings since he started teaching at LSSU in 1969. Items he has posted in recent years include a photograph of President Ronald Reagan, a political cartoon mocking Vice President Dick Cheney's 2006 hunting accident, and political cartoons about Islamic terrorism. Other professors at LSSU, including professors on Crandall's own floor, post on their office doors similar materials reflecting various ideological perspectives. In 2005, Crandall first heard that someone had complained that his displays were "hateful and bigoted," and on March 12, 2007, Provost Bruce Harger finally ordered Crandall to take down his display, threatening to charge Crandall with "insubordination" if he failed to comply. Crandall acquiesced but has turned to FIRE to restore his right to free expression.
I have some pictures of office doors here on campus on this post a couple of years ago. These update pictures I took in 2004 (links here and here used blogspot image storage which has since been taken down, but replaced by the pictures I have in the other link. One of them had the slogan "Bush is a dumbass". As I wondered then:
The first thought through your head is:
a. "Ah, here's a place for reasoned discussion, just why I came to SCSU."
b. "I guess I don't have to watch what I say in here."
c. "So that's how you spell that! I thought it was two words."
d. "Better hide my Bush/Cheney button."
That sign was no longer on the door, last time I looked. The other office I photographed continues. I am fine with the display -- it is not insubordination. But it is intimidating to a conservative student who might take a class with that faculty member. A year after the pictures I retold a story from David Horowitz who, no matter your sentiments about him generally, makes a good point here.
The first thing I noticed was that the Chairman's office door was adorned with a large Anti-Iraq War poster. I have made a personal campaign against such political statements on professorial offices. Students go to these offices for counseling. Such partisan statements create a wall between the professor and the student who it is his or her professional responsibility to help. They serve no purpose but to vent the spleen of these tenured individuals who are apparently so frustrated as to be unable to maintain minimal self-discipline in the presence of a captive audience students who -- if they disagree with the statements -- have no choice but to suffer them. I asked Jamie, who is a senior and whose father served this country in the military, if
he had ever taken a course with Professor [and Chairman Johnathan] Hiller. When he said no, I asked him why. He pointed at the sign.
Now one must ask in the case FIRE is representing here: Did the display that the LSSU faculty member put on his office door put a wall between him and the student? If it did, is it "insubordination" for a faculty member to place such a wall? What Would Horowitz Do? What would you do? I believe the answer has to involve one's understanding of a professional ethic that faculty members have.


Housing in campaigns 

The housing issue is rearing its head in the presidential and other campaigns. MPR reports on the criticism of the Senate bill (supported by both Minnesota senators.)
The Senate bill is likely to include several provisions aimed at shoring up the weak housing market. Among them are tax credits for buyers of foreclosed homes, along with billions of dollars to refinance problem mortgages and for cities to buy foreclosed properties.

But the bill also provides billions of dollars in tax breaks for businesses. Critics, including Democratic House Speaker Nancy Pelosi, say those tax breaks come at the expense of directly helping homeowners who are in trouble.

Last night we had another blogger conference call with Senator Norm Coleman, and I asked about this criticism. His response was that the tax breaks do help homeowners and that this distinction between direct and indirect help is a false one.

He also points out the issue I raised about that criticism being in conflict with the criticism in the story of there not being enough money for mortgage counseling. As Michelle Malkin has described, the mortgage counselors are often affiliated with left-wing groups like ACORN and La Raza. Coleman defended the idea of counseling; I did not bring up these groups as part of my question, wondering if he was aware of the issue. He made no mention of them. His support of the housing bill pointed to the residential construction industry, which suffered a 14% decline in employment in 2007.

I find no discussion of the mortgage issue on Al Franken's website.

Meanwhile, the Bush administration appears ready to double-down on last summer's FHA insurance expansion.
Under the expanded program, lenders could get FHA insurance for problem loans in exchange for "voluntarily writing down the outstanding mortgage principal," according to the testimony. That would entail the government being responsible for an increasing number of risky loans.

Mr. Montgomery emphasizes in the testimony that "while considering any changes to FHA, we must ensure that the financial solvency of the [FHA] must not be compromised." FHA is a division of the U.S. Department of Housing and Urban Development, which didn't return calls seeking comment.

Under the original program created last year, known as FHASecure, homeowners with high-interest, adjustable-rate mortgages currently can refinance into an FHA-insured mortgage and lower their monthly payments. To date, the administration says it's served 145,000 homeowners in need, and projections show that it will likely reach more than 400,000 by year's end. A temporary expansion of the program would be expected to add significantly to that total.
The plan differs significantly from the Durbin plan, which Coleman criticized for its cram-down provisions in "turning mortgages into junk bonds." (Ed Glaeser writes about how to not use the bankruptcy courts to solve the mortgage crisis.) In the Bush proposal, the lenders are being told if you want the FHA insurance, you have to work out a haircut of the principal, reducing the debt of borrowers. Coleman had not seen the plan yet and had no comment.

States are not missing the opportunity to posture for the voters or the media. In Minnesota, SF 3396, the Subprime Foreclosure Deferment Act continues to work through both houses of the legislature.

"We have a crisis in mortgage foreclosures, and this seemed like the boldest way that we could respond to the problem," said state Sen. Ellen Anderson, a sponsor of a Minnesota bill that would let some borrowers with subprime loans or negative amortization mortgages defer paying a portion of the amount owed, without being considered delinquent. A negative amortization mortgage is one in which the loan balance can grow even if the borrower keeps up with the payments.

I'm troubled by the implication that boldness should be the criterion by which we choose how to resolve debt issues. Seems like boldness got us here.
The Minnesota legislation would require a mortgage lender attempting to foreclose on a home to honor a borrower's request for a 12-month deferment. During that time, the borrower would have to continue paying either the monthly payment due on the loan at the time it was made, or 65% of the monthly payment at the time of default, whichever was less, though the borrower would eventually have to make up the deferred payments. The bill has passed committees in the Minnesota House and Senate, but the governor has said he probably will veto it. [Last] Wednesday, the bill's sponsors sent to the governor a letter suggesting that lawmakers work with him to craft a compromise.

The legislation faces strong industry opposition. "It would significantly erode the confidence lenders and borrowers have about the stability of contracts in Minnesota," said Tom Deutsch, deputy executive director of the American Securitization Forum, an industry group.
Contrary to some opinions, the bill does impose some real costs. The terms of the loan are changed. Who would lend again in a place where bad times means the power of government is shifted onto the depositors of a bank, its employees, and the taxpayers?

One thing is for sure: Housing draws voters' attention, which leads it to draw politicians' attention. The latter should worry you.

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Tuesday, April 08, 2008

An inefficiency of marriage? 

The Bureau of Labor Statistics has been dealing with budget cuts by cutting the time-use study it does. That will make it more difficult to do studies like this:
Having a husband creates an extra seven hours a week of housework for women, according to a University of Michigan study of a nationally representative sample of U.S. families.

For men, the picture is very different: A wife saves men from about an hour of housework a week.

Notice the picture above, which shows that all categories of work for women went down and for married men went way up. (For single men, up but only slightly.) That's likely a function of both the technology of housekeeping and because the cost of housekeeping went up because the marginal value of an hour of time rose. Additional labor force participation -- particularly for females -- would play a role.

The math of this is a bit strange. Why do women work seven more hours on housekeeping but men work one less hour? It's absurd to think that's a gender difference in productivity (as flattering as that might be to us men) or a change in the costs. So is it a change in demand? When I mentioned this to my family, Littlest responded quickly "women care more about cleanliness than men, so men can slough off when married." But did women slough off before they got married? Why did the housekeeping cost of two people living in one home rise by six hours?

It would seem a signaling issue rather than a game theory story. Both men and women rise in the amount of housework done; do two people in one house make a bigger mess than two people in two homes? I guess I don't see that. So it would appear to me that each wants the other to know that they are neat. They invest in a signal that they are good mates. Given the sharp rise in the hours devoted by married males (with no significant change in the hours of single males) we would have to conclude that men are more interested in signaling than before.

Confounding this, of course, is the rise in relative wages for females, making their labor in housekeeping more expensive relative to males. But I still see a fair amount of signaling going on in this story. Is the signal a waste of people's time?

(h/t: The Corner)


Explorations in free speech: the shut up edition 

I've been invited to speak in a panel on the swastika story, so I'm looking for examples of where the school says one thing and does another with speech it decides is hateful. I'm pretty sure I will use the latest St. Thomas example of denying Star Parker permission to speak on campus, as Scott Johnson has reported succinctly.

St. Thomas Vice President for Student Affairs Jane Canney recently explained the school's denial of permission for the event in a meeting with Katie Kieffer ...and her sister Annie ...

According to Ms. Kieffer's account of the meeting, Canney articulated a "'Shut up,' he explained" rationale for the school's denial of permisson for Parker to appear: �As long as I am vice president here [at St. Thomas], the Young America�s Foundation will not be allowed on campus." Ms. Kieffer reports that Canney stated she did not want another event like Coulter's speech on campus.

Canney's petty tyranny cannot easily be reconciled with the St. Thomas speaker policy. And Star Parker's prolife message is itself consistent with St. Thomas's professed convictions.

Not just censorship, but prior censorship based on the funding organization. Is this what they mean when they say one of their convictions is "We respect the dignity of each person and value the unique contributions that each brings to the greater mosaic of the university community"?

Other podcasting 

I think we should try this ourselves for FW: The David Strom Show's better half, Margaret Martin, has a show page for each broadcast in which they excerpt clips. She has two of me in last week's show.

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That's education! 

An emailed ad arrived through the campus announcement list today:

Feeling sad or upset about injustices, wars, environmental problems in our world today?

Want to make the world a better place?

Not sure about what you can do
or feel you want to do more?

If this is you, find out about the Social Responsibility Masters Degree
at an informal informational Pizza Party!

Come & find out about the possibilities of making our world a better place.

We will be:
� Chatting about the Masters of Science in Social Responsibility
� Meeting people currently in the program & learning what they have to say about it.
� Eating pizza
� Best of all-finding out possibilities to making our world a better place.

Three questions:
  1. Is there a common storage place on the internet where you get the right ethnic balance for pictures of all kinds? "Um, I'd like to have a picture of people eating pizza. But they gotta be diverse, y'know? Got any of those?" (Don't bother with the Google image search. I tried that.)
  2. Is it the proper role of education to create programs that help you deal with things that make you sad or upset? The active terms in the ad are "make the world a better place" and "do more". Do more what?
  3. Have I been reading too much Goldberg, or does the red lettering spook you, too?
The program being advertised is here.

UPDATE: Welcome Liberal Fascism readers! Thanks to Jonah Goldberg for the link.

Omigosh! The Corner too? Truly flattered, thanks.


Monday, April 07, 2008

Keeping us off the edge 

On August 14, 2007, there was $4.486 billion in state general obligation bonds outstanding; on Feb 1 this year the level stood at $4.339 billion. The government has to service these bonds (i.e., pay interest and principal) and this was currently forecasted for 2008 to be at the level of $409.4 million, up from $353.7 million in 2006, a rate of increase of 7.5% per year. The growth in the next biennium adds another $50 million in debt service costs. The maximum that was set for this year was $885 million, and with today's actions on line-item vetoes by Gov. Pawlenty we spent $777 (the $717 million today and the $60 million in the transit bill.)

Also worth noting: That bill obligates the state to issue bonds going forward of an additional $1.8 billion. While it has gas money dedicated to its expenditure, the state also has a guideline on debt service as a share of state personal income, which is unlikely to rise as the result of tax increases. It's not yet the binding constraint of the state's debt management policy, but any slowdown resulting from higher spending on fuel could cause the state to graze that 3% limit. Limiting the bonding bill to the lower figure chosen by Gov. Pawlenty today will give the state at least a little breathing room.

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Rumors on bonding billBlood on the tracks 

A commenter on MDE says the governor is just announcing the bonding bill will be vetoed in toto. I should have taken the bet with Michael on the air Saturday, dang it!

Now the question is: Will the DFL try to override (which I'm told will fail in the House, but I've heard that before)? If they fail to override, will they offer a second bill? Will Keith Langseth pay a price for his $925-or-bust strategy?

Should make for more good show material!

UPDATE: I had heard the rumor he might cut down more than the $825 million limit, but my God!
Gov. Tim Pawlenty has signed a borrow-to-build plan after cutting out projects to reduce the price tag. Pawlenty decided Monday to use his line-item veto authority rather than taking down an entire $925 million bonding bill. The trimmed bill contains $717 million of general state debt.

Among the 52 rejected projects are the Central Corridor light-rail line linking Minneapolis and St. Paul, a Como Zoo gorilla exhibit and the proposed new Bell Museum of Natural History.

"Somebody has to be fiscally responsible. That job falls to me," Pawlenty said.

On the block was $81 million in easy pickings from the Central Corridor rail project and the now infamous gorilla pad at the Como Zoo. All told, more than $102 million came out of the Met Council requests (full list courtesy MPR.) The letter sent by Gov. Pawlenty to Speaker Margaret Kelliher-Anderson was quite emphatic.

I am very disappointed that the legislature ignored an understanding between my office and legislative leadership and my repeated warnings to abide by the state's longstanding debt limit. It is irresponsible to exceed the "credit card limit" that has been maintained by governors and legislators from both parties for the past 30 years. Doing so could jeopardize our state's strong credit rating and low interest rates. The overall limit is $885 million, including $60 million already allocated in the transportation bill. The legislature spent well beyond this figure.

In addition, this bill reflects misplaced priorities. As just one example, I find it inconceivable that legislators would fund a brass band music lending library and yet provide no funding for a much needed new nursing facility at the Minneapolis Veterans Home.

...The legislature should keep in mind that upholding the state's three percent debt service limit guideline is important to our overall fiscal well-being. Debt service is one of the fastest growing items in the general fund. Based on previously enacted bonding bills, the state's debt is projected to increase $239 million from the 2006-07 budget to the 2010-11 budget.
The St. Cloud Times reports that all the local projects survived. Larry Schumacher also speculates at the end of the article that the cuts below $825 million provide a little room for a second bonding bill and that the Governor's veto might indicate a willingness to logroll the legislature for the Veterans Home and Lake Vermillion projects. I doubt that will happen, though. Gary's description of treadmarks on Sen Langseth's back are probably enough reward for Pawlenty's work.

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Scenes from the front 

I received a letter from one delegate to the CD 6 convention, one portion of which I used in the post just below. Here's the letter in full, unedited:
It was interesting what happened at the CD6 convention and I wanted your take on it. I don't know whether you witnessed any of what went on Saturday or heard from anyone. The session lasted until after 7pm. All of the National Delegate candidates were vetted beforehand to determine whether they would vote for and support John McCain's nomination. That information was provided on the displayed list of the candidates to aid in voting by the BPOU delegates.

From the results of the voting, it appears that the Ron Paul supporters plan to hijack the nomination from John McCain I am making that judgement from observations of went on during the meeting, discussions overheard. Just linking the events together with the results proved to be interesting. Such analasys of causality is characteristic of my profession. The final capper was towards the end of the resolution balloting when the National Delegate selection results were anounced and what happened at the end when a motion was made to bind the selected delegates to vote for John McCain The sound of a stuck pig is more civil than the Paulestinian Jihadists (Ron Paul Supporters) cry of foul. They started getting really uncivilized during the discussion. At least one of the selected delegates selected claimed that he "didn't understand" the question that was asked each delegate. The Rules Committee made it clear during the discussion that during the vetting process everyone was asked the same two questions in the same words.

If one was the suspicious type one might suspect that the Ron Paul supporters were given marching orders before the convention to vote in a block for specific supporters of Ron Paul as delegates. I must confess that I looked over the shoulder of one of the known Ron Paul supporters in violation of their secret ballot privilege to see who they were voting for. My interpretation of the way thing went is that this was orchestrated in advance. If one could get access to the ballot, one might surmise from the numbers there may have been an unbalanced number of votes for the ones who won. Being of a suspicious nature I might further surmise that it wsa an unnaturally high block of votes for supporters of Ron Paul's names that had the highest vote totals. Have you heard any rumblings of such possibilities?

Also it was interesting who wound up being selected as tellers for that process that when I volunteered they didn't want me in the group. Aren't the tellers and assistants picked in advance?
First, I wasn't there as my broadcast duties prevented me from participating at the caucuses, and because I knew the convention was going to go long (I'd pretty much have left after the speechifying, which frankly I'd have to say would be the least interesting part of the day.

Second, the description of the question asked by the nominating committee in this letter says the candidates were asked if they "would vote for and support" McCain. The description on Leo's blog says only support with a 'maybe' answer possible. I'll ask around to get the exact wording, which seems important to me now. As noted by commenter J. Ewing, you can be a Fred Thompson guy who now supports McCain. But if you were asked if you would vote for McCain at the convention and misrepresented that, a more serious question can be raised about whether those delegates should be seated. And regardless, in my view the motion to bind the delegates to McCain, passed by CD6 late in the day, exists and will have to be decided by higher rules and credentialing committees.

Last, I was told by Andy Aplikowski that many delegates left the convention after voting for national delegates, so that while more than 300 were there the vote on binding was taken by a group of less than 200. I would argue this is not a problem for the Paul supporters, if we are to believe that they stayed in higher proportion than the McCain supporters. It is a problem for McCain's supporters. Michael and I have questioned on air whether the McCain campaign in Minnesota has been adequately staffed and organized. That you might have lost that vote because your people left the room should be of great concern to the McCain campaign. Even if you think the national convention will be like a coronation, there's work to be done to be sure the crown rests easily.

Conventions are often messy (and DFL ones more so, taking Kevin Ecker's example) but it appears this one was more than it should have been, and that the majority might have taken a play off, as we say in sports. That's not the minority's fault.

UPDATE: Drew Emmer has an independent assessment from the front. He apparently had no problem telling who the Paul supporters were. Drew thinks the rules were changed ex post; again, I am asking what questions were asked by the nominating committee. I am told that some answers to the two questions were changed during the nominating speeches.

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Sunday, April 06, 2008

What the hell happened at the CD6 convention? 

First I read that they kicked out the video cameras. But perhaps we should have had them, not to help the stalkerazzi but to have seen the end of this clusterfarg.

SD 15 co-chair Jeff Johnson sent a newsletter this morning that included a list of national convention delegates and this note:
Ironically, all of these individuals (except Congresswoman Bachmann who supports John McCain for President) have been reported as Ron Paul supporters. It sure got ugly today at the convention!
I had also heard this on the phone last night via Gary. I saw some reference to this also at Leo's blog. The story has since gone national with a headline at World Net Daily by former KNSI talk host (and erstwhile Huckabee supporter) Andy Barnett.

The story is that 98 delegates were nominated for the three national delegates and three alternates. Leo says they were asked
1: Are you a Republican?
2: Will you support John McCain? (yes, no or maybe).
The answers to these questions were displayed on a screen as the vote was taken. If you answered no or maybe to the second question you could still stand for election, but people would know where you stood. The choices of delegates and alternates were:

Delegates: Congresswoman Michele Bachmann; Ron Baert (Benton County); Bob Swinehart (SD52)
Alternates : Steve Hackbarth (Wright County); Scott Anderson (SD52) ; Dean Mahlstedt (Wright County)
I have met Mr. Baert, who worked in electronics for a long time on the east side of St. Cloud, and he is indeed a Paul supporter. Wish I'd've been there, I could have told people that. Neither electee from SD 52 are in that district's leadership. Drew Emmer had warned of the Wright County phenomenon after his district convention where he warned that 60% of his county's delegates were for Ron Paul and "the delegation we elect to the state and national GOP conventions may contain an unexpectedly high percentage of Ron Paul devotees."

Got no problem with that, but not if they are liars. Andy Barnett continues:
A motion was made to ensure the delegates supported McCain at the national convention.

"I moved that we bind the national delegates and alternates to what they told the nominating committee which is what was reported to the voters," said Aplikowsky [sic, actually our friend Andy Aplikowski.]

A heated debate lasting more than an hour followed the motion. Eventually, the motion passed by a slim margin, but not without harsh words and harsh exchanges.

The feeling among many of the congressional delegates who voted was that the Paul supporters had been dishonest. Ron Baert, one of the elected national delegates and a Ron Paul supporter disagreed.
According to other people I've spoken with or exchanged email with, the discussion was very heated. One emailed me
The sound of a stuck pig is more civil than the ... Ron Paul Supporters cry of foul. They started getting really uncivilized during the discussion. At least one of the selected delegates selected claimed that he "didn't understand" the question that was asked each delegate.
I'm pretty sure Leo transcribed the projected questions, and it is reported that all six elected delegates had indicated "yes" to question #2. If so, what was to understand?

Weeks after his post, an anonymous comment was left:
Excellent, but we more DELEGATES!

1. Sign up
2. Show up
3. If you cannot show up, still sign up
4. If you cannot become a delegate, sign up to be an alternate
5. If it's to late, become a Volunteer

You know what? It is working, it is easy, and this is action that RP will need at the Republican National Convention in Minneapolis-Saint Paul the first week in September.

This is more then only talk - it is real action....

At least forward the link to minimum 10 potential delegates. That I�m sure you can do.

This is the core of the useful things to do. Way more useful then all this talk. Because DELEGATES=POWER.

Yes, we know it's working, and may be way easier than you think too. Just get people out of their chairs please - to get RP some real help before the Republican National Convention in Minneapolis the first week in Sep.
A link to left with that comment takes you to a site I am "not authorized" to read.

I note this isn't the only case of Paul supporters becoming national delegates in Minnesota. Bill Jungbauer won in CD 4. You'll note his site is full of Ron Paul links and positive comments. Now will he vote for Paul or McCain? Did anyone ask, did anyone move to bind those candidates? Andy Barnett reports that the Paul supporters swept CD 4, but one of the delegates is Taxpayers League and former state Rep. Phil Krinkie. I will be interested to hear whether he is part of this movement.

One source on the floor of the convention said it appeared to him the vote was orchestrated. There was even concern over the choice of tellers and their assistants for the vote. That source said he volunteered but was told he would not be needed.

Some writers from the left had picked up this possibility even in February. Marianne Stebbins, Paul campaign coordinator for Minnesota, has said herself she thought they would get nine delegates to the national convention from this state. She had created a video presentation last December to show them how to get elected. Republicans by asking the questions asked by the CD6 nominating committee at least tried to stop this, but it appears to have been thwarted by excellent electronic communication among Paul supporters. Far from a sneak attack, this has been signaled all along.

What would the GOP leadership like to do about it? Will it allow those who did not properly represent themselves to the nominating committees to be seated at the national convention?

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Friday, April 04, 2008

More Global Warming? Well, Maybe Not 

As this article from the Times on line discusses, Iceland's ice mass is decreasing. The cause? Of course, it's global warming. The headline is typical fear mongering: "Increase in volcanic activity is linked to ice melted by global warming." OK, I'll buy warmth melts ice but that's the only correlation I'll buy. There are three problems with this title, article and "conclusion."

1 - How can the scientist be so sure it's global warming causing the ice to melt? Maybe the volcanic activity under the surface is causing the ice to melt. Iceland actually gets a lot of its energy from geothermal pools, underground hot springs. Assuming that something on the surface is causing an ice mass decrease is not conclusive.

2 - The article says Iceland "has allowed the land to rise by up to 25m (82ft) a year. " WOW! That's a huge increase - 82 feet a year. If so, wouldn't we have noticed problems with this before now? I mean, if the land around my house rose even 2' a year, I'd know it - 82' a year?

3 - Greenland's ice mass is increasing. A look at a map shows the two countries very close together - both are sitting close to the Atlantic Ridge Mountains (underwater). Why is one experiencing ice melt, the other increased ice mass? Does not compute.
Finally, only after reading five paragraphs and getting to the last sentence does one discover that maybe the volcanoes will become active in 100-200 years.

Talk about trying to make a non-issue into an issue, and one that fits a preconceived idea that the earth is warming. What passes for research these days is an embarrassment to the scientific community.

HT - Hot Air


You know you've made it when... very good blogger is referred to by another very good blogger as the me of Mankato. Oddly, someone from Mankato was visiting our campus this very day for a workshop with department chairs. Such as lovely April Fridays sometimes spent (though a trip to two local watering holes with river views made up for that.) Phil Miller is indeed an excellent blogger; he, Doc Palmer and I had a couple of podcasts back in 2005 found at the bottom of John's podcast page.

Two of the three of us are on the Northern Alliance Radio Network tomorrow. I have an extra appearance in my usual first-of-the-month visit to the David Strom Show at 10am. John and the Fraters at 11-1 (guys, more hockey!); Mitch and Ed 1-3; and then the Final Word with Michael and me at 3-5pm. I believe we'll talk about the honesty of Larry Pogemiller, the bonding bill, and this curious article about malt liquor and murder.

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The first rule of holes 

Russ Roberts offers a reflection on Hillary Clinton's interview on Jay Leno last night, in which she uses a story of a child's telling her that his mom's hours were cut when the minimum wage was raised (video on Russ' post if you wish.)
She clearly thinks the story is emblematic of something important that needs to get fixed. What is it? Just when you help someone by passing a minimum wage, greedy employers ruin everything by lowering the hours. Well, we need to "fight" and fix that, too.

I wish Jay Leno had pointed out that the cut in hours was the result of passing the minimum wage--that it was as inevitable as gravity. I wish he'd said that the story showed how the minimum wage is a false promise of prosperity. I wish he'd pointed out that fighting isn't enough, caring isn't enough, that prosperity can't be legislated any more than self-interest can be made illegal. I wish Jay Leno had said that when you find yourself in a hole, the first thing to do is to stop digging.
Now I'm sure some will come to argue that minimum wage increases don't reduce employment, though the evidence from overseas pretty incontrovertible. But it's a harder argument to make on a day when payroll employment was just announced to have fallen 80,000 in March. "But King, you haven't controlled for other effects!" Neither did they. Post hoc for the goose is post hoc for the gander...


Mrs. Scholar writes 

... whether the solution to the Desoto bridge could be the private sector. I will note that "privatization" means selling off a public asset more than it means a private agent building an asset and leasing or charging it to the public sector or for the public's benefit. Thus I don't think I would have used that title for the article, but you may think I'm splitting hairs. I'd prefer to say we are allowing competitive solutions to road transportation, just as we have for rail and air transportation. (Amtrak and state airlines are the rail and air analogs to a public road system.)

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Thursday, April 03, 2008

Perhaps not so innocent 

The front page of the campus newspaper blared "Islam awareness week begins". I thought, if you ain't aware of it by now, an awareness week is likely to also miss your attention. The report just linked there indicated the Muslim Students Association on campus wanted "to teach non-Muslims to understand the second-largest religion in the world." Making our students aware of other religions seems a good thing, an innocent act that should be applauded on academic campuses, and is how our local campus newspaper reported it.

One of the presenters, Siraj Wahhaj, canceled his appearance for earlier today. The StarTribune reports on his cancelation and his background:

Siraj Wahhaj was supposed to speak Thursday on the topic "What is Jihad?" The school was unaware of a reason for his inability to participate. Wahhaj was also scheduled to speak to other college student groups in the state this week.

His appearance at the University of Minnesota has also been canceled, said Lolla Mohammed Nur, a U student organizer.

Wahhaj, an American-born imam of a mosque in Brooklyn, N.Y., is on the executive committee of the Muslim Alliance in North America, a network of organizations addressing needs in American Muslim communities.

...In 1991, speaking to an Islamic association of Texas, Wahhaj called Operation Desert Storm "one of the most diabolical plots ever in the annals of history," and that the war to oust Iraq from Kuwait was "part of a larger plan, to destroy the greatest challenge to the Western world, and that's Islam."

Wahhaj, while praised for combating drugs in New York and being the first Muslim to offer a prayer to open a session of Congress, has also appeared on a government list of unindicted co-conspirators in the 1993 World Trade Center bombings.

I'm for academic freedom and assume he had some interesting things to say, but his sudden cancellation is odd. Salon reports that
Wahhaj had invited Sheik Omar Abdul Rahman to speak at his mosque, and even testified on his behalf. Just as the USSR fell, so too will the U.S., Wahaj said, "unless America changes its course from the new world order and accepts the Islamic agenda."
Daniel Pipes has more. It's a shame he didn't come. Being aware of that kind of Islam would be good for many of our students.


Gore should run in Europe 

The European Union's greenhouse-gas emissions from key industries rose 1.1% last year, despite its antipollution policies, demonstrating the difficulty in meeting international commitments to fight climate change.

Carbon-dioxide emissions reached 1.914 billion metric tons last year in the sectors covered by Europe's Emission Trading Scheme, according to an analysis of data by Oslo-based Point Carbon, a carbon market-research and consulting firm. The data released Wednesday aren't complete, because some companies' results are still trickling in, but it represents about 93% of the total, according to the EU Web site.

For the past three years, Europe has been trying to reduce emissions by imposing a market-based cap-and-trade system. Industries such as power generators, steel, cement and aluminum are supposed to cap the amount of carbon dioxide they spew. If they can't make their targets, they must buy permits to emit carbon on the open market.

By forcing companies to buy and sell the right to pollute, Europe's system is supposed to give them a financial incentive to clean up their acts. It is also supposed to provide European countries with a way to meet their commitments to the Kyoto Protocol, the United Nations accord that set emissions-cutting targets for the 175 nations that ratified it for the period between this year and 2012.

Some 11,500 factories, oil refineries, steel mills and other installations are covered by the EU scheme, accounting for about half of Europe's total emissions. There is still no limit on the other half, produced by everything from cars and planes to buildings and retail outlets.

But the caps that the EU set for different industries turned out to be too high. As a result, instead of shrinking, as was originally envisioned, emissions in these industries have crept up by about 1% each year since the program began.

Source. Like you couldn't have seen this one coming. The fight over how much now to reduce caps will be political, not scientific.

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It's a jungle out there 

I haven't seen the survey yet, but a KNSI news report says it's getting harder for area real estate professionals:
When he asked where they see themselves in five years. 59 percent of mortgage bankers say they would stay in their field, compared to 91 percent in 2005. In 2005, 100 percent of assessors said they would keep the same career, compared to 86 percent last year.

Professor of finance, insurance and real estate Steven Mooney says professionals are not expecting an improvement in the next three years. Most are rating the market as �poor to average�. A big contrast to just two years ago; not a single respondent described the market as �poor�.
The only thing I find really striking about that is the degree to which opinion seems to move in a herd-like fashion.

I'll drop Steve a note and ask if I can see the survey.

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The Pigou Club: Rated R? 

A South Carolina state senator wants to tax pR0n. He says "Just as we're trying to do with cigarettes, we have tried to do and continue to try to do with alcohol, is lets the users of those products pay for some of the consequences that come from that." Presumably the consequences are crimes against women and increased divorce rates.

I suspect there will be people lining up to estimate the external cost of pornography. I mention this because there was an interesting paper a couple of years ago that looked at the link between sales of Penthouse and the use of private P.O. boxes (all the better to keep your subscriptions away from prying eyes.) If you instrument the demand for pR0n with the use of private mail boxes, the relationship between smut and crime actually turns negative, and that with divorce disappears. The negative relationship would lead one to believe smut and sexual assault might be substitutes. I don't think that's likely, but I neither would throw the idea away as preposterous. And if so, what's the right tax for your Playboy to meet the Pigou criterion? Do club members make an allowance for the possibility that they cannot accurately measure the external cost?

I suspect the tax in this South Carolina story has more to do with Colbert. How many feathers do you pluck from a goose before it's rated R?

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The DFL/Democrat Socialism Plan 

On March 24, King posted here about comments made by the DFL (Democrat Farmer Labor) Party MN Senate Majority leader, Larry Pogemiller. The comments then were selfish and arrogant.

Now, you can see Mr. "Socialism" Pogemiller live making his comments that he and the DFL legislators in St. Paul can spend our money better that we can. To view, go here.

The American left has been redefining basic vocabulary for decades. Now, according to the DFLer, Pogemiller, people who disagree with his socialistic view of the world are anti-democratic.

KING ADDS (4/4): So people can see the context (see Gary's post about Pogemiller's reply), here's
the original sound (courtesy of Freedom Dogs.)


Wednesday, April 02, 2008

Billions of mortgages subsidized 

Good news: $4.3 million coming to Minnesota to help with the mortgage crisis. As this cool dynamic map will show you, the problem in Minnesota is worse than almost any other state in the union. (Coolest of all, it will give you data by zip code!)

Bad news: The money goes for additional "mortgage counselors". Tell me who is in a bad mortgage right now that is just waiting to work out their problems but frustrated by a busy signal?

Instead, it will be Marquette Bank that gives out some bridge money for borrowers who need some cash to get through a work-out of their loans.

It would be interesting to watch political reaction to Holman Jenkins idea of supporting house prices by reducing supply. Would Marquette get praise for funding demolition teams?
Knocking down surplus homes would be the most efficient and equitable way to spend taxpayer dollars. It can proceed experimentally. It can be turned off quickly when the need evaporates. It would not be a lesson to Americans that housing debt is not real debt and need not be repaid. It wouldn't benefit the most irresponsible lenders and borrowers at the expense of responsible ones. The housing market would still have to hit bottom, but the bottom would be higher (and sooner).
I'm not advocating that as the best plan, but it's the most interesting paragraph I read today.

UPDATE: Captain Ed gets it. I'm reminded of all the criticism of US aid to developing economies being mostly about hiring U.S. consultants to offer advice rather than giving money to the poor in those countries. (And yes, I say that as having been one of those consultants.)

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Lights on 

Increasingly politicians are using new media to communicate with their constituents and other supporters. Rep. Michele Bachmann has put up a blog on the Republican Study Committee's site to explain her position on CF lights. It's interesting because it turns the precautionary principle on its head. Rather than prevent a new product coming onto the market until one could absolutely prove its safety, it requires the GAO to show that a ban on the incandescent light bulb would

1.) Lead to lower costs for consumers

2.) Lead to a reduced carbon footprint

3.) Not lead to a health risk for consumers, particularly those in vulnerable populations, like those in nursing homes, day care centers, hospitals, and schools.

We've written about the issue here before, in terms of its warping of peak demand, and the Minnesota Free Market Institute re-released an editorial from May 2007 about health effects of the mercury inside them.

But, I would argue the Bachmann bill does not go far enough. As Mike Moffatt noted a year ago, prohibitions have a lousy history. If somehow the price of electricity is wrong such that the incandescent light isn't paying the true cost of energy it consumes, the answer is to change the price. Rather than allow a ban to go forward if GAO gives the right answers to her questions, Bachmann should have it construct the right Pigovian tax. Mike has an idea for that, too.

Meanwhile, Congress could save some energy use by just getting rid of daylight savings time. And make farmers happier at the same time.

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A violent parody 

The parody newspaper is a staple of college campuses (and the origin of National Lampoon.) The use of satire is typically respected in academia, such as Moo or the Microcosmographia Academica. Students use it often, sometimes with hilarious intent. Their humor being a little coarser and less guarded, it gets them into some hot water from time to time.

But Colorado College seems to have gone mad by calling one such parody "violat[ed] the student code of conduct policy on violence" even though the violence was "implied". To understand the parody, you need to see first the original, and then the parody. (Both link to a landing page first from FIRE -- be warned that the .pdfs linked use language typical of college parody pages, so use good judgment when and where to view.)

It appears the college took exception to a reference to the range of a sniper rifle and to the parody of a discussion of "packing" with "chainsaw etiquette." CC President Richard Celeste is somehow taking the view that public apologies are not sanctions (as reported in Inside Higher Ed):
Colorado College values and fosters freedom of expression, and in discussions with students regarding �The Monthly Bag,� has encouraged further dialogue about freedom of speech issues on campus. The students involved in creating this publication were found to have violated the college community�s standards, but they were not sanctioned or punished. Instead, they were urged to engage the college community in more inclusive dialogue, debate and discussion on freedom of speech, and through a letter to the editor of the student newspaper and other actions, they are doing so.
Such forward thinking: If you "imply violence" you are "urged to engage the college community in more inclusive dialogue." About what? The College's own statement on Freedom of Expression says:
As a private institution, Colorado College is a voluntary association of persons invited to membership with the understanding that they will respect the principles, which governs the college. Freedom of thought and expression is essential to any institution of higher learning. Uncensored speech - which does not include a right to harass, injure, or silence others - is essential in an academic community and will be vigorously defended. Members of the college community should understand those standards of civility, consideration, and tolerance must shape our interactions with each other. Infringing upon the expression of views, either by interfering with a speaker or by defacing or removing properly posted or distributed notices or materials, will not be tolerated.
Emphasis added. Which document, Rag or Bag, harasses, injures, or silences, President Celeste?


The wealth of its campus 

I graduated from St. Anselm in 1979. I'm not sure the number of Benedictine monks on the campus at that time, but it was substantially more than the 25 that remain today. Because of that and its wish for more capital from alumni, the school is now considering a change in its leadership structure.
After 120 years of holding near-total control over the school they founded, Benedictine monks at St. Anselm College yesterday yielded to outside pressure and took a step toward sharing power with lay trustees.

"The monastic chapter has decided to reopen the discussion and consideration of governance and to pursue a model of shared governance," said St. Anselm's president, Father Jonathan DeFelice.

The move has been discussed for more than ten years, but had recently been put on hold because of concerns it would change the nature of St. Anselm.

I am not Catholic (raised Methodist, now Lutheran), but I can say the monks of the school were a vital part of my education. Several were my instructors in economics, Latin, philosophy, chemistry and computer science (I may have forgotten one here.) Brother Joachim Froelich was one of my mentors (and later college president.) Religion did not play a direct role in my education -- I was not to take the religion classes because I was a Protestant, I was told -- but seeing the life of the mind pursued by those who lived a monastic life made a believer of me that my education needed to be broad-minded.

I do not know if St. A's will change from a change in its leadership structure. Most certainly there will be greater concern for the school's finances. But I'm more concerned about the dwindling number of examples on campus that a life in God and a life in study of science and letters can go hand in hand. They are as much the wealth of the college as any rich benefactor.