Saturday, May 31, 2008

Convention wrapup 

After one more battle over the national delegate slate -- won handily by the pro-McCain/party regular forces, though not without about an hour of tense debate, and which featured a speech by Michael that brought a broad majority of the house up and cheering -- Karl Rove is now speaking after which the convention will be over. The house is at this point only half-full. There will be a couple of meetings for the national delegates and alternate, and a state central committee meeting, but most of the hall will empty in about 30-45 minutes.

Rove's speaking skills serve to show the difference between those ready for national stage and those that are not. The people here are pleased by the comments where Democrats are criticized. His comment on Rev. Wright: "I'd be more comfortable with Sen. Obama if there was moral indignation than personal indignation." And then support for the Iraq War, which drew even more favorable applause when comparing who spoke to their enemies when. Foreign policy issues were most favorably received by the convention, though he certainly causes the Paul supporters to seethe.

Longtime convention attendees that I spoke to this morning thought this was not as well handled a convention in re the rules and the nominating slates, and there was a fair number of people unhappy with the degree to which McCain floor managers were signaling votes on every item. It's worth remembering -- a majority of these delegates were not elected at the precinct level to be McCain delegates. They supported Romney, or maybe Huckabee, or came undecided after being Guiliani or Thompson folk. Their attachment to McCain is something not that deeply felt. Thus the curiosity about Paul and attendance at his rally, and why some of those who eventually voted for McCain may have nonetheless been less than enthusiastic with the tactics employed by both the McCain managers and the party's rules.

Again, show time for us at 3pm, Mitch and Ed are up now. I have had so many people thank us for the NARN here, and let me on behalf of them all say how humbling and gratifying your support has been. You have no idea how much we appreciate your support -- heck, I'll drive through a gallbladder attack to do this!

Unless something extraordinary happens here, that's all from here and I'll return to my usual weekend blog silence. See you Monday.

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Speech day 

Day Two of the MNGOP is ongoing, and so far what we've heard are speeches. Lots of them. Governor Pawlenty was here around 9am, and I only caught the last five minutes of this as I took a few minutes to chat with people outside, including one very interesting person (more on which below.) Congressional candidates Ed Matthews and Brian Davis spoke afterwards. The AM1280 the Patriot coverage started at 9 with the David Strom Show; David and Margaret are visiting with Barb Davis White right now, who expects to get up and speak to the convention later today. The feature speaker later will be Karl Rove.

This being day 2, it's a slower day today; all the rules and delegates for national have been chosen, and the rancor of yesterday has disappeared mostly. True North has impressions from other conservatives who were here yesterday, and most seem of the opinion that it didn't go very well with the spat over the rules and nominations. A lot of the reason for the rancor, in this observer's view, was that each side was underprepared for what happened. The party chose a set of rules that was meant to respond to the looseness of the Congressional District conventions and the success of the Ron Paul organizers there; these responses were encouraged and even promulgated by party regulars. However, the rules were not an overreaction. However, the rules were only handed out as delegates arrived in the morning; even with the late start of the convention, there was probably two hours for outsiders to digest and strategise. Possible, but hard, and for people less familiar with conventions probably an insuperable task.

Yesterday a woman came to the booth before we are on air, broken down by the rout of the Paul faction that was here. We spoke briefly but she wasn't able to collect her thoughts. By chance she stood behind me at the Starbucks this morning and we had a better conversation. I tried as best I could to explain some thoughts about what had happened. I encouraged her not to sacrifice her principles while finding how to participate in the process, and how to change it. She was not happy, arguing this was unfair. "This is how dictatorships happen. People are pissed."

The question is, do you think that's unfair? Does the party have an obligation to put rules out a day before? A week? What's proper notice? I think reasonable people can come to different conclusions about this, and I have sympathy for both sides. There is a learning curve each person faces when joining an organization. There is something to be said for helping new members along that learning curve; there's also something to be said for organizations moving through their workload in the manner they have found arrives at the best solutions for the organization. I try to educate new faculty on the ways of the department and university, but it's also true that they speak less, participate less their first year or two. Draw that line where you wish; I am just going to say it isn't easy.

Glen Menze is now up; this looks like the course of the day. Listen on the radio or the stream to us all day for news of the day from Rochester. I may post some impressions of the Karl Rove seat if I get back from coffee with David and Margaret, to which I'm now off.

UPDATE: Barb Davis White just gave props to Ron Paul to great applause from a majority of the delegates (some sat on their hands.) Line of the day: "I'll be done speaking in a few minutes. I'm black and I'm Jewish, I talk a lot."

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Mobile feed available 

A reminder for people here at the convention who want to read this blog on their mobile phones. It's doable easily if you have an RSS reader on your phone. Use Google to find one for your model of phone, as many programs are specific to their phones. Here's the Atom feed if you want to use that. As an alternative, I've set up a quick-and-dirty site on Winksite here. Click and save this on your mobile phones if you want a feed. That should be mobi compliant.

BTW, other bloggers here and blogging include Chad, Kevin, AAA, Marty (new site) and of course Michael. If I hear others I'll put them here.

UPDATE: The Uptake has posted a video report.

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Friday, May 30, 2008

Show time 

Chad, Michael and I will be on the air at 5pm at AM 1280 the Patriot. No more blogging from here unless we're still doing things at 8pm. Thanks for being here today.

UPDATE: Show ended at 7, and the convention recessed fifteen minutes later. I will say the noise level and the hail outside was the most challenging environment for broadcast that I can remember. But great guests today, including Congressional candidates Ed Matthews and Brian Davis, and an excellent thirty minutes with Marianne Stebbins and Bill Paulson of the Ron Paul campaign, made it worth the effort.

The David Strom Show and the Northern Alliance are here 9-5 tomorrow. Hope you'll listen.

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Coleman nominated 

Norm Coleman was renominated a few minutes ago in a very quick unanimous voice vote. The applause in the room is excellent and enthusiastic. A group of supporters come off the wings to stand in front of the stage. Some snips...

Referring to Obama's San Francisco comments: "We don't cling to our faith, we cherish it." (2007 rank from Club for Growth: McCain not there enough but at 94% would be top 10, Coleman #42)

Support for McCain both on the war and controlling wasteful spending.

"I've cherished the role being Minnesota's mayor in Washington."

"when the floodwaters rush into Roseau and Browns Valley, Minnesota doesn't need an ideologue in Washington, they need someone that gets things done."

He quotes Winston Churchill: If you're going through hell, keep going. This is what he thinks Republicans need to do, and how Republicans should get around to selling its message to voters. We are winning in Iraq, violence is down, al Qaeda is down and we need to recognize Gen. Petraeus as man of the year.

Change isn't always good. Sometimes change is going from Bud Grant to Les Steckel. For the DFL, change is always about taxes. "Keep your hands out of our pockets, keep your hands off our change."

"For those who want to have nationalized health care show us the Medica or the Mayo Clinic of Canada. They don't exist."

Coleman came out for deep-water off-shore drilling, which would fly in the face of his votes previously on ANWR. It's good news if he follows through. The crowd likes this. He then mentions alternative energy, that doesn't go over nearly so well.

"I'm not ready to surrender the 21st century to China."

"#7 We will secure our borders. National sovereignty ends when we don't protect our borders, period."

Speech ends after about 35 minutes. Media are off to get quotes, Michael will grab that if possible.

(Meanwhile, out back apparently a battle between McCain and Paul supporters. Someone reported to me that they saw Ms. Stebbins quite emotional in the back of the hall about forty minutes ago. Don't know if she was involved; she could be emotional because this happened.)

National delegate battles 

National Delegate lists have been announced. One-minute speeches are given. Michael has been announced a a candidate. He announces his blog and the show. He did fine, though the shine off his head was blinding. The inclusion of Marianne Stebbins on that list indicates that Ron Paul supporters have been given the opportunity to run. (Interestingly one was both on the team slate put together by party regulars and by the Paul campaign.) Stebbins uses her speech to talk about Paul, not about her own candidacy. She (strategically) goes last.

The one-minute format is not easy, and many are either afraid to say enough in case they get cut off, or don't tell you enough. One fellow, Dan(?) Williams, got it -- say the name three times, do it with energy, and get out. The mayor of St. Bonifacius, Rick Weible, is using his effort to have his city secede from Hennepin County and its taxes as a springboard for office. Quentin was up -- the betting was 30 seconds over-or-under for when he first mentions Rhodesia or Zimbabwe. I had the under, and won. The job was well done for keeping people to the one minute and we're done in 30 minutes with the speeches.

UPDATE (2pm): Attempt to take a break fails. Instead, attempts to get more voices from the Paul supporters offered but fails. The rules debate is making them try to find 2/3 votes. I am waiting for someone to make a motion to take additional nominations from the floor; and now when someone tries to do so they are being told the rules. Some Paul voters attempt to demand for a vote on additional nominations but don't get recognized by the chair. Complaints are that voters must vote for a certain number (no bullet voting) and that the nominating committee was allowed to choose who was to be on the ballot (ballots were printed with names, no blanks for write-ins.)

When the nominating committee came up to name the alternates passed, there was a good deal of shouting from Paul supporters, leading to a rebuke from the chair. Now, an attempt to bring alternates for nomination from the floor is voted down. And the speeches begin. State party chair Ron Carey comments:
�They�ve had endless points of order that were not true points of order. It was an intentional slowing of the process. ... We want the Ron Paul people to be part of the party � they are part of the party. But the game�s been played and it was won by McCain.�
Slate discussions from Duchschere now cover the battle between the Paul and McCain/state party slates. Still no announcement of results to the larger battle.

UPDATE 2: (1454) Ron Paul supporters seem to be rallying on the vote for alternates. Vote to allow additional nominations was close but ruled to fail. There was a short break, they are now considering the nomination of Sen. Norm Coleman to run for re-election. The vote has happened in a matter of minutes, and they are running his video now. I'll close this vote and post on Coleman's speech next.

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Convening by milling around, mucking about 

The ballots are being distributed on constitutional changes after a rather long debate and another mind-numbing credentials report which seems mostly to serve only as a reminder that the bathrooms are nearby and it's time for lunch. They've decided to have a credentials report before every major item voted, which is great for being sure the delegates who killing a lot of time here. (They've now just decided to report changes in seatings, which will greatly speed things up, thank God!)

The big battle is between the McCain and Paul people regarding the McCain campaign's use of paper signals for their supporters. There are McCain workers with earpieces walking around with hats and it appears yes and no signs. The Paul supporters believe this should be stopped. However, I have also seen and heard from other delegates that Paul supporters pass around cell phones with voting instructions. Less intrusive, I suppose, but it's the same thing. Mostly, I think the morning vote on the rules has made the Paul supporters restive and they are using the coordination of McCain supporters as a way to take out their disappointment, along with some questions on the constitutional rules.

I believe the national delegate elections are coming shortly, to be followed by the decision on endorsing for Senate. Kevin Duchschere, who is sitting two tables away here, has posted on the possibility that the endorsement of Sen. Coleman might not be unanimous. Few things ever are, and while I haven't seen the flyer Duchschere refers to, Minnesota Majority has circulated a flyer like its piece yesterday questioning Coleman's support on the Climate Security Act. It's hardly newsworthy that Coleman votes sometimes unlike hard-core conservatives, not is it surprising that more than a few of those here.

I'm now up to three on the number of former students I've seen here, all unexpected.

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Rules pass without much mess 

Rules debates seldom seem to be important. Even when a church goes nuts over which edition of Roberts they're going to use happens, most of us don't laugh, we just shake our heads.

The vote on this was for 2/3 majority, and the rules as presented to the convention passed. That's a big deal. The chair has moved the questions very quickly from the proposed changes to the vote on the entire docket. The people who are trying to have rules changed have now started to protest that the vote went too fast, but the first major battle is won by the McCain and state party regulars.

Our frequent caller Quentin is up protesting how quickly the vote has happened, and that the majority appeared to be well-organized and given cues how to vote. He's been ruled out of order (fella, this is a convention, not Hugh's show.)

I am surprised this has gone as quickly as it has.

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The first test of the session has come, to alter the agenda to allow for nominations for national delegate to come up after lunch. Many alternates right now are sitting in the balcony waiting to come down, and there'd be a second chance for them to be seated, which they need to help with the Ron Paul slate. That was defeated indicating that the McCain-state party people have come out in force.

First credential call is going on right now. Attendance appears to be middling for delegates vs alternates. Second District had about 60% of its delegates here; 55% in the Third.

Fascinating: I'm looking at the StarTribune State Politics page. Tell me if you can find the Franken story on it before you click this. Hmmmm.

Meanwhile, credentials are passed and the balcony that held the alternates is now practically empty as they come onto the convention floor. The rules debate is beginning now, and this will probably deserve a separate post.

The opening moves: Enough sun to gather 

Delegates at this moment are filling the Mayo Civic Center this moment after a wet night in Rochester. The rain lifted in time for the Ron Paul supporters to gather for a speech by Rep. Paul at 7:30 this morning. I am absolutely no expert on estimating crowds, but I think 200-300 is a fair guess to the number there, of which a fair number were the curious rather than the Paul supporters. Even one who was there, my frequent commenter and fellow blogger bleak, was there both as favoring Paul over McCain but cautious of some of the supporters' behavior. This picture isn't taken with a wide lens, so don't judge from this alone.

UPDATE: This is a little video of the crowd, pre-speech.

State organizer Marianne Stebbins said what she wanted was a fair convention and discussed the rules as "needing to be followed". Barb Davis White, candidate for the U.S. House in CD 5, spoke to a very supportive crowd, then Rep. Paul gave a largely upbeat, encouraging speech that focused mostly on thanking his supporters and on the larger battle. If the lookers-on came to hear some bombthrowing, I think they were disappointed.

For coverage of the speech, see Bill Salisbury's report. The convention starts in a few minutes, and I will post during the day as significant news occurs.

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Thursday, May 29, 2008

What I saw on the day before 

I've walked around the convention for several hours and the talk here is about the potential for a floor fight between Ron Paul supporters and the party regulars. There is a rally planned with Paul tomorrow morning at 7:30. One delegate said to me "I've been praying for rain;" the prayers are working as of right now, as thunder and lightning has just joined the steady rain that has been here for several hours. Go time is 9am for the convention, and most of the people I spoke with think the big action will happen right away.

Norm Coleman has been working the rooms so far tonight, visiting with delegates, taking pictures with them. I have not seen any other Federal elected officials yet. This being an uncontested endorsement, there will be a concerted effort to have that be the feel-good moment of the day tomorrow.

Compared with the Minneapolis Convention Center in 2006, the Mayo Civic Center feels a little more like a university gym converted for graduation. The Coleman and McCain campaigns have put up lots of posters and given it a somewhat more festive look, and I spotted a couple of banks of Paulsen signs.

We will be back on the air tomorrow at 5pm. I will post from the convention's media row during the day, so check back as you can for what news there may be tomorrow from here.

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Live at five at the MNGOP! 

Michael and I will be on AM1280 the Patriot 5-7pm for the opening of the Minnesota GOP convention at the Mayo Civic Center. We'll be here tomorrow same time, and Saturday as the usual list of the suspects of the Northern Alliance Radio Network. Streaming is available from the link.

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Wednesday, May 28, 2008

Fishing for trouble 

Stanley Fish can be maddening. When I met him up here a couple months ago, I was charmed by his manner with students and interest in teaching about Dante at the mere mention of a few students around him who were studying The Inferno. We spoke at length later about academic freedom -- disagreements, sure, but a very pleasant exchange from which I certainly learned and of which I am uncertain I taught him anything at all.

So when this week's column came out, lambasting the University of Colorado's proposal to raise money for a chair of conservative thought, I was none too surprised by its view. Prof. Fish speaks to an ideal in which faculty who bring liberal activism into their classrooms should be treated like the dog who wets your carpet:

First, what does �left-leaning� mean? Does the university issue policy statements on controversial matters? Does its administration come out for gay marriage or for gun control or for reproductive rights? Does the university endorse liberal candidates, or criticize Supreme Court decisions, or contribute to Move If the answer to any of these questions were �yes,� �left-leaning� would be an accurate designation. It would also be a reason to deny the university its tax exempt status and demand that it register as a lobbyist. But of course the university does none of these things. How then does it lean left?

The answer appears a little further down in the story when it is reported that emeritus professor Ed Rozek surveyed the Boulder faculty and found that out of 825, only 23 were registered Republicans.

That is a strawman argument on two scores. First, one could hardly find a university as an institution that does engages its institutional voice for gay marriage or its fundraising arm for MoveOn. What we're talking about is that individual faculty behave that way, and encourage their students to do so. As we see below, he doesn't think they should, but then he believes that they must be honorable and so don't do it, save for a few knaves on each campus.

Then second, he simply won't believe the data on intellectual balance. The Rozek study is perhaps flawed, but you don't have to look far to find other such studies. Fish does his readers a poor service in ignoring the other data that are available.

We've been here before with Fish; from an article five years go in the Chronicle of Higher Ed (reprinted in FrontPage here):
[T]eachers should teach their subjects. They should not teach peace or war or freedom or obedience or diversity or uniformity or nationalism or anti-nationalism or any other agenda that might properly be taught by a political leader or a talk-show host. Of course they can and should teach about such topics --something very different from urging them as commitments--when they are part of the history or philosophy or literature or sociology that is being studied. The only advocacy that should go on in the classroom is the advocacy of what James Murphy has identified as the intellectual virtues, "thoroughness, perseverance, intellectual honesty", all components of the cardinal academic virtue of being "conscientious in the pursuit of truth" ("Good Students and Good Citizens," New York Times ,September 15 2003). A recent Harris poll revealed that in the public's eye teachers are the professionals most likely to tell the truth; and this means, I think, that telling the truth is what the public expects us to be doing. If you're not in the pursuit of truth business, then you should not be in the university.

I was told something very different in the 60's when I was teaching at Berkeley. In the wake of the Free Speech Movement a faculty union had been formed and I had declined to join it. Some members of the steering committee asked me why and I asked them to tell me about the union's agenda. They answered that the union would (1) work to change America's foreign policy by fighting militarism, (2) demand that automobiles be banned from the campus and that parking structures be torn down, and (3) speak out strongly in favor of student rights. In response I said (1) that if I were interested in influencing government policy I would vote for certain candidates and contribute to their campaigns, (2) that I loved automobiles and wanted even more places to park mine, and (3) that I didn't see the point of paying dues to an organization dedicated to the interests of a group of which I was not a member. How about improvements in faculty salaries, better funding for the library, and a reduction in teaching load? You, sir, I was admonished, do not belong in a university. No, they didn't know what a university was and a lot of people still don't.
And faculty unions still push the same thing today in some places. I get his point: sauce for the goose is sauce for the gander. But if Fish rejects intellectual affirmative action -- which I think he's right to do -- what alternative does he offer?


Tuesday, May 27, 2008

Public salaries 

The St. Cloud Times undertook a project to study state employee salaries. Their data center provides a searchable database that you can use to look anyone up, including me if you wish. (They also provide a separate database for the University of Minnesota -- when I see what my colleagues in the U's economics department who are about my age make, ugh!)

A two-part story began Sunday with a look at overtime pay to state employees, with $50 million paid in 2007 out of a $2.58 billion payroll. The public-sector unions of course claim this is due to too few public sector workers, while critics like Phil Krinkie and Craig Westover highlighted the demand for public-sector employees being driven up by greater regulation. But most interesting was the table that appeared in the print story (though not on the website that I can see) of the top 10 salaries in the state. Tops is MnSCU Chancellor James McCormack, who earns over $350,000. Second, though, was an SCSU professor who earned over $250,000; another on the faculty here was near $22ok. By comparison, Gov. Pawlenty gets $120,303 as salary for being governor.

What's up with that? The second part looks at the pay rate for teaching online courses. Here it's pretty simple: Most courses are 3 credits, and for each student in such an online class you get $195. That is not part of one's regular salary but paid on top. And, unlike teaching an extra course in the classroom, you get more, the more students who register. And, there's no limit contractually on how many of these you can do. (Teaching overloads for lecture classes are capped in the contract, and the cap is only lifted in emergency cases, largely so that opportunities are spread around a department more evenly.) Both of those two SCSU faculty in the top ten are providers of online classes.

The article identifies 10,400 seats in online courses. If we assume they were all three-credit classes, that's more than $2 million annually paid to those faculty, not peanuts on a campus with about a $140 million budget, of which about half are faculty salaries. But what doesn't get mentioned in that story is that students pay extra for the online course (between $235 and $250 per credit versus $175 for the lecture course.) They aren't just lucrative for the faculty teaching those courses. More is staying in the offices of our continuing studies program.

Hard to say what will happen with this information. It's always been public, and I don't object to the transparency of my own salary. It was part of the agreement to work here. But the scrutiny over the online courses might cause some changes there. Like many universities, ours has taken a serious approach to assessing effectiveness in teaching. One hopes that online courses, like those in our lecture halls, have evidence of student learning. If they do, I don't see why we should have concerns about who gets paid what. And if they don't, it wouldn't matter how much you pay them. You can't find a bargain in bad teaching.

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Private and public charity 

A NYT article on charities being taxed in Minnesota draws interest from James Joyner and Tyler Cowen. Cowen comes up with some rather interesting list of which not-for-profits should be taxed, based it appears on a public goods argument. Joyner is more circumspect:
I tend to agree that Harvard�s endowment should be tax exempt since its proceeds to go legitimate educational endeavors and are not �profit� pocketed by stakeholders. But I�m not sure the lines are particularly bright.
But non-profit or not-for-profit is simply a decision of how the excess of income over expenditures are taken by those who have a residual claim. In short, you can't take it as personal income of some form or another. But you still get to have a nice car with driver, or a fancy boardroom, or what-have-you. My colleagues Bill Luksetich and Mary Edwards and UNLV professor Tom Carroll wrote a paper examining those differences with regards to Minnesota nursing homes. Government and non-profit nursing homes spent more per resident than the for-profit ones. (I do not know if they or anyone else has found evidence on quality of care by organizational form.) Bill's done similar work with symphony orchestras and museums, too numerous for me to list here. So non-profits might make a lower amount of net benefits than for-profits (since the latter can consume those more efficiently) but non-profits do fiddle their expenses to obtain some private gains.

But that said, doesn't government do the same thing? Ever walk into the cafeteria of a Federal Reserve? The old building in Minneapolis had one that was pretty swank. Might we consider taxing those activities too?

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Monday, May 26, 2008

The tails 

When you talk to people familiar with the state legislative process, a term you hear often is "the tails". This refers to the impact of a decision about this year's budget on the projected spending and taxation and surplus or deficit for the next biennium. (Projections are not provided beyond that.) It is what allows legislators to discuss the possibility of needing additional cuts in the next Legislature, or the possibility of new spending programs.

After the budget compromise of last week was announced, one thing that was said to me was that "they chopped the tails", meaning the reduction in spending (or the removal of the foreign operating corporation exemption -- the tax increase that dares not speak its name) had made a good deal of progress in reducing the size of the FY2010-11 deficit. I said to those people I would wait to see the evidence when someone released the fiscal impact report.

The report is now out from the House research staff, and the tails barely got nibbled.

You will hear that we cut out $268 million from spending in this biennium and $340 million from the next. True enough. But the additional LGA monies and the money to K-12 education take back $137 million in this biennium and $428 million in the next. The net changes are thus $131 million reduced for 2008-09 and $88 million INCREASED for 2010-11. The total reduction in the next biennium's defict is only $137 million, of which the FOC exemption removal is estimated to bring in $140 million. This is what happens when you pay for $935 million in the current deficit with $617 million in reserves and fund shifts.

Here's a summary of where the money goes and comes. Most of that additional $88 million is the impact of the transportation bill (HF 2800) that was enacted over Gov. Pawlenty's veto. Here's that bill's tracking sheet -- notice that $86 million of spending in the next biennium for that bill is not paid for by any of the tax increases the DFL enacted. At a minimum, one would have thought the Legislature that gave us that additional spending would have come up with a way to pay for it before it went back home for the year. But as well, that calculation should make it plain that the only progress made on the tails was the result of a tax increase. I know the governor's office doesn't want to call it that. I'll simply say been there, done that.

But a majority of the blame has to go to legislators who cannot even clean up their own mess after passing HF 2800. Our discussion Saturday on the Final Word with Sen. Geoff Michel and Rep. Steve Gottwalt indicated they were also concerned about the next biennium's budget. With the reserves depleted, can there be any doubt that another tax increase lies on the horizon if the current DFL majority gets a veto-proof margin in the House?

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Friday, May 23, 2008

Zimbabwean acceleration 

The AP reports (h/t: Best of the Web) that inflation is now over one million percent over the last year in Zimbabwe. I think you need to consider it much worse than that. The Zimbabwe Independent last week reported on monthly rates: 355,000% in March, versus 165,000% in February:

Top government sources said the inflation figures for March had initially been projected at 406 000%, but were still being computed as the Central Statistical Office (CSO) continues to fiddle with the consumer basket.

"The CSO were instructed last month to change the consumer basket. The basket is forever changing." said one Ministry of Finance official. "It remains uncertain whether the go ahead will be given to them to release the figures."

Food and non-alcoholic beverages continued to be the major drivers of inflation in March.


The figures come at a time the RBZ has introduced higher denomination bearer cheques notes to counter the adverse effects of inflation.

The central bank introduced the $500 million bearer cheques for the public and the $5 billion, $25 billion, $50 billion agro-cheques for farmers. The new notes come hardly two weeks after the introduction of the $250 million bearer cheques.

"Counter the adverse effects", you say? Seems to me you're only making it worse.

So what really is the rate? In the legendary hyperinflations (1923 Germany, 1941-44 Greece, 1946 Hungary or 1993 Yugoslavia) you had prices doubling within a day, or at least every two days. The Independent article reports an economist saying Zimbabwe prices are doubling weekly. That Zimbabwean $500 million note was worth $2 US when first introduced last week, probably only $1 now. These things tend to accelerate quite rapidly however, and with elections still a month away, the record hyperinflation of Hungary is in sight.


Cross price elasticity of demand, popcorn edition 

The rocketing price for corn already is hurting Americans at the grocery store and the gas pump. Now it�s going to hurt us at the multiplex, too.

Partly because of the rising price for popcorn, on Thursday Kansas City-based AMC Entertainment Inc. announced that beginning today it will increase its ticket prices from $9 to $10 for weekend show times after 4 p.m. at its five Kansas City theaters.

Also beginning today, AMC�s popcorn price will jump 25 cents nationwide.
Source. That must have a lot of people scratching their heads: If the price of corn is going up, and you sell popcorn, why do you raise BOTH the price of popcorn and the price of the movie ticket? There's been a number of books that have gotten at that question, as Steve Landsburg notes in his review of Tim Harford's Undercover Economist. But now Richard Mckenzie has titled his book Why does popcorn cost so much in the theater? Tyler Cowen points us to a trailer Mckenzie has done, which includes a tip on how to recover that $.25 on the popcorn, which adds something to the puzzle I think.


How 'bout I just put a cop in my back seat? 

Another item on the list of Legislative acts that just fry my bacon:

A measure awaiting Gov. Tim Pawlenty's signature or veto would ban drivers from texting, reading or sending electronic messages while their cars are on the road.

Pawlenty must act on the transportation measure, which also creates new restrictions on teen drivers, by June 2. He has not said whether he will sign the bill or veto it.

Under the legislation, texting while driving would become a petty misdemeanor, much like other traffic violations.

"What we really want to do is send a message that it's unacceptable," said Rep. Frank Hornstein, a Minneapolis Democratic-Farmer-Laborite who sponsored the measure.

"I want to really get this issue much more on the radar because people may have the reaction that I had, which is, 'People do this while they drive?' "

There are any number of things that distract my driving; my hands are not always ten and two on the wheel. About one third of the distracted driving accidents that happen are due to stuff that is outside the car, like the billboard telling me to hang up my cell phone. There is already a law in the state on careless driving. When this issue was looked at in 2002, a MN House research report found that
�Driver talking on cell phone/CB� in the department�s annual compilation of crash statistics was cited in 2000 as a contributing factor in 110 damage-only crashes, 68 personal injury crashes, and two fatal crashes. These crashes represent only a tiny fraction of all such crashes in Minnesota that year�less than 0.4 percent of all crashes in each category. These percentages, while still quite low, have been slowly rising since the department began reporting this category of crash factors.
It is hard to believe, however, that they've risen to the point where the state has another right to pull drivers over.

I heard from someone in the last hour that Gov. Pawlenty said on his radio program this morning that he was signing this bill. That would be another disappointing loss of personal freedom signed by our "goalie". I'll update this post with a link to the story when it comes over the wire if so. (UPDATE: MPR confirms.)

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Yessirree, we bought us a MO-vie! 

The Coen Brothers are the latest shakedown artists to get the state government to part with taxpayer dollars.

After flirting with Milwaukee, Joel and Ethan Coen will begin shooting their next film in the Twin Cities this fall.

"A Serious Man," concerning a Jewish family living in St. Louis Park, has held open casting calls for local talent and scouted locations around the area.

But the production company also explored shooting the comedy/drama in Milwaukee's suburbs, lured by Wisconsin's film subsidies, which are more generous than Minnesota's.

When the Legislature passed a measure granting $500,000 to the production, Focus Features green-lit the project within 24 hours. The film is expected to generate $6 million to $7 million for the state's economy.

Seriously, how do they know the film will generate $6-$7 million? Most of these studies use economic multipliers, like this one from Virginia, assuming an additional $1.12 of follow-on spending for each direct dollar spent. That state estimated $20 million from 15 film projects in 2002, including Gods and Generals. (Note, the economic impact doesn't depend on how good the movie is or was.)

Why stop at the Coens? If you can leverage $500k into $6 million in income (and thereby collect maybe 10% between sales and income taxes), why not pay all comers?

Stripping the empty holsters 

You remember our debate on campus here about the Empty Holsters campaign? At Tarrant County College in Texas, they made a much worse choice. FIRE reports:
On March 28, 2008, TCC student Brett Poulos e-mailed TCC South Campus President Ernest L. Thomas to describe an event he was organizing called an "Empty Holster Protest." Poulos had collaborated with Students for Concealed Carry on Campus (SCCC), a national organization that "supports the legalization of concealed carry by licensed individuals on college campuses." SCCC promoted a coordinated national protest for April 2008 in which students would peacefully attend class and perform other daily tasks while wearing empty holsters to signify opposition to state laws and school policies denying concealed handgun license holders the same rights on college campuses that they are granted in most other places.

In an April 10 response, Juan Garcia, Vice President for Student Development, "granted" Poulos's request to stage a protest on the South Campus, but changed the fundamental nature of the protest by banning the protesters from wearing empty holsters anywhere on the South Campus, including in the designated free speech zone. The South Campus free speech zone, according to Poulos, is an elevated, circular concrete platform about 12 feet across.

Poulos met with Garcia on April 18 and was told that TCC would take adverse action if SCCC members wore empty holsters anywhere, strayed beyond the campus's free speech zone during their holster-less protest, or even wore t-shirts advocating "violence" or displaying "offensive" material.
You can have your empty holster protest, but don't wear an empty holster? What kind of sense does that make?

The other issue in this, and the larger reason I'm posting on it, is the use of these free speech zones, which SCSU has. I had hoped that when the Code Pink protest in March had ended up having the students and their advisor apprised of the policy that both liberal and conservative students and faculty might come together and ask that this policy be eliminated, replaced by the sensible restriction to not permit the disruption of classes. So far, all we have seen is further questioning by students of the speech rights of preachers who come to campus. As the Tarrant County story makes clear though, the zones' existence permits a curtailing of free speech far greater than just a time restriction. Public expression zone policies are an invitation for censorship.

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A silver lining 

Demand for silver -- the "poor man's gold" -- has accelerated so rapidly that the U.S. Mint that was producing silver dollars is now rationing them.
In March, the mint stopped taking orders for the bullion coins. Late last month, it began limiting how many coins its 13 authorized buyers world-wide are allowed to purchase.

"This came out of nowhere," says Mark Oliari, owner of Coins 'N Things Inc. in Bridgewater, Mass., one of the biggest buyers of silver eagles. With customers demanding twice as many as they did last year, Mr. Oliari would like to buy 500,000 a week. But the mint will sell him only around 100,000.

The coins have a face value of $1. But the mint sells them for the going price of silver, plus a small premium, to a handful of wholesalers, brokerage companies, precious-metals firms, coin dealers and banks. The dealers mark the coins up a bit more and sell them to the public. Currently, the coins are fetching about $19 apiece, with some sellers seeking more than $20.

Speculators are loading up on silver; I found a bag of $1000 of circulated Liberty halves on eBay for $11,600. Mint coins of course sell for more. The run on silver has moved the gold-silver ratio down to near 50:1, where it has traded north of 80:1 as recently as 2003. The historical mean ratio is around 32 (and monetary historians will tell you about the 16:1 ratio up to 1873.) Silver is a much smaller or thinner market than gold, so when people are speculating on commodities as inflation hedges, silver can outperform gold, as it has the last few years.

The last time there was a real run on silver, the Hunt brothers drove the price to $50/oz. at the end of the 1970s, owning about half of the world's supply. We're not even at $20 yet.

Meanwhile, high oil prices are moving us up on the supply curve.


Thursday, May 22, 2008

For you early morning types 

I'll be on KNSI's Morning Show tomorrow, 6-8 AM. Streaming audio available at that link.

I was going to post things today but had too much fun updating a syllabus instead. We academics are funny like that. Back tomorrow.


Wednesday, May 21, 2008

Wishing it were true 

The more I look at the data, the more I think my reiteration of a "short and shallow recession" might need revision. I just got around to looking at the St. Cloud data on employment, and we added 0.8% last month (not seasonally adjusted) and 1.4% year-over-year, double the rate for the state as a whole. Some of this has been a resurgence in public sector jobs but private employment has also risen 0.8%. Construction employment looks like it's stabilized, and service sector jobs seem to be marching along smartly.

So I was surprised last night to read Tom Stinson's interview with Lori Sturdevant saying we're in a "fragile position". I guess I shouldn't be, given Tom's usually downbeat manner. Statewide, the private service sector added 1.3% employment last year, but you wouldn't know it from this Q&A:
Q: How would you describe the state's economic outlook?

A: Right now, we're having a short, mild recession. The concern is, will we have a little bit of recovery, then go back down to zero growth? This one, partly because of the [federal] stimulus package, looks like it's going to be a W -- a peak this summer, followed by slow quarters thereafter.

Q: Why the backsliding?

A: It's all the usual things. It's credit, it's housing, it's oil.

We're in kind of a fragile position, if oil prices stay high. Global Insights [the state's national economic consultant] now projects oil prices at $112/barrel in this quarter, and falling to $100/barrel by 2009. [Oil was at $127/barrel on Friday.] Every $10/barrel in oil prices knocks 0.2-0.3 percent off real GDP growth in the U.S. If $120/barrel oil is where we end up, that's going to knock us back to zero in GDP growth later this year.

Every penny per gallon increase in gasoline prices costs consumers about $1 billion. When the stimulus package was passed, gasoline was roughly $3/gallon. Now, it's roughly $3.65. That means higher gas prices have burned up half of the stimulus package.

Q: What's the outlook for housing here?

A: Housing is really important for Minnesota's economy. We haven't, since the Great Depression, gone through a full year when we had housing prices decline nationally. We've just done that, and we're going to do another year of it, and maybe another year after that. We're going to have fewer houses built this year than at any year since World War II. This isn't just your normal slump. This is big time.

Typically, we have a housing slump because the Federal Reserve raises interest rates. Here, the problem is, we built too many houses. Interest rates are low. So how do you work out of this? You're not going to see a big surge, because there is no pent-up demand.

He notes, however, that tax collections are still running $135 million ahead of forecast. (This must be updated from the April report.) Despite this, our state economist is holding to a Global Insights forecast that not only pulls down the 2008 GDP forecast from its February report (1.2% growth versus 1.4% in Feb.) but also 2009 (1.7% vs. 2.2%.) The NABE forecast announced on Monday showed 1.4% growth consensus for 2008 by 2.3% for 2009. Only 56% thought the economy was in recession now, and all of those thought the recession would end either in the second or third quarter. Today's release of the FOMC minutes from 29-30 April indicate the central tendency of projections at the Federal Reserve were in the range of 0.3-1.2% for 2008 and 2.0-2.8% for 2009.

The 'W' recession that Stinson mentions here is very much a minority opinion. My colleague on the Quarterly Business Report has been more optimistic than me, and me more than Tom, and I've never been sure we're in a recession.

UPDATE: Now that I read the minutes of the FOMC meeting, and look at Fed funds futures pointing to higher interest rates before year-end, the less the 'W' makes sense. The minutes contain the note of caution on inflation from FRB Philadelphia president Charles Plosser and Dallas Fed president Richard Fisher:
Rising prices for food, energy, and other commodities; signs of higher inflation expectations; and a negative real federal funds rate raised substantial concerns about the prospects for inflation. Mr. Plosser cited the recent rapid growth of monetary aggregates as additional evidence that the economy had ample liquidity after the aggressive easing of policy to date. Mr. Fisher was concerned that an adverse feedback loop was developing by which lowering the funds rate had been pushing down the exchange value of the dollar, contributing to higher commodity and import prices, cutting real spending by businesses and households, and therefore ultimately impairing economic activity. To help prevent inflation expectations from becoming unhinged, both Messrs. Fisher and Plosser felt the Committee should put additional emphasis on its price stability goal at this point, and they believed that another reduction in the funds rate at this meeting could prove costly over the longer run.
With more recent statements by other Fed officials indicating a pause from here in interest rate cuts, I expect more Fed officials to join Fisher and Plosser through the summer.

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Tuesday, May 20, 2008

Ceteris paribus, taxes edition 

Janet wrote me asking if I would post on this article by David Ranson in today's WSJ. It's long been a theme of the Journal's editorial board that no matter what the top individual income tax rate is, you get the same level of tax revenue. Now I find that interesting, given that we are told the Laffer curve works by the very same people, and the Laffer curve clearly says that variations in tax rates will yield variations in tax revenue (just sometimes in the opposite direction.)

Any time I think about these marginal tax rate changes that Ranson draws on, however, I am pretty sure I can find changes in the base on which the tax is collected. When we drop the marginal tax rate, there's worry that "the government is losing money", so we need to make that tax change "revenue neutral". As the Tax Foundation points out, that is in essence giving one group a tax cut while shifting the cost of that cut onto someone else, so that Uncle Sugar stays in sweetness.

It would be great to find natural experiments where the marginal tax rate is cut and the legal definition of the tax base is unchanged. But darned if I can think of one.

UPDATE (5/21): There's a lot of criticism of Ranson from more liberal bloggers. Take for example Justin Fox's graphic. One of the problems of using the finer gradation of his graph versus Ranson's is that it makes relatively small fluctuations look like peaks and valleys. Almost certainly some of those are due to fluctuations in the tax collections through a business cycle (the progressive income tax is supposed to be an automatic stabilizer.) If you're going to draw that graph as Fox does, you would want to measure individual income tax collections at full employment, which is a highly speculative activity. CBO provides the data you could use.

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Ceteris paribus, higher ed edition 

Joe Nathan wrote last week about graduation rates in the MnSCU schools, and he is "stunned" and "shocked" by what they tell. But his own words trip him up here:
The report shows that Minnesota ranks 5th in the nation in percentage of 2004 high school graduates who ENROLLED in a two or four year higher education institution. That figure is 65.3%. About 50% enter a Minnesota college or univeristy, with the rest going to a higher education institution outside Minnesota.

Comparable figures for North Dakota were (67.6%) and South Dakota (68.8%). Guess I would not have predicted that a higher percentage of high school graduates in those two states would go on to a college or university.

Overall we are doing pretty well in helping students enter higher education. But graduation rates are far too low.
Nationwide, only 37% of students who go to a four-year school to seek a degree actually get the degree in four years; 63% get it within six years. Why does Minnesota rank in the middle (and St. Cloud State with 19.3% in four years and 46% in six)? It has to do with who we get as students. Selective universities will get students who have both better preparation for college, and higher tuition as a motivator to get done on time. Carleton's graduation rates of 88.1% & 92.8% make a lot of sense when you consider who they bring onto campus and how much they charge for you to stay around for years 5 and 6.

Variation across states can be explained both by selectivity, demographics, and institutional features. MnSCU has made it a priority that students in any institution can easily transfer to other MnSCU institutions. But that doesn't necessarily mean the student makes that transfer seamlessly. We try to develop agreements and programs to allow students at two-year schools to move to the four-years, but it's not always the smoothest transition. And we get students who frequently take less than a full load, even after you advise them that this will slow them down. Again, because there's no penalty attached to being around for an extra year, there's little incentive for students to get done with college besides their own feelings that they need to get on with life.

I went into IPEDS and let it generate a list of 26 peer institutions (almost all within our geographic region.) These are public schools with masters programs, all of which appear to be relatively non-selective in admissions. Their six-year graduation rates for all degrees was 49%. But we are even less selective than these peers. We admitted 84.7% of those who applied to SCSU, compared to 77.7% at our peers. 41% of those we admit come to this school, compared to 45% for our peers. Their ACT scores are about the same, so it appears we're getting about the same quality student. (All data for Fall 2006 admissions.)

So I would argue that the differences that remain when we compare apples to apples are not big enough to call this some kind of emergency. Most certainly we could afford to do a better job in getting students here who want to stay, and we could do better at making sure students take the right number of credits (I have long argued for banded tuition here, so far in vain, even though four of our sister institutions have it.) But none of this is shocking or stunning. We've known it for a long time.


Monday, May 19, 2008

Wise Words 

During this political season let's be reminded of these
wise words:

You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot lift the wage earner up by pulling the wage payer down.
You cannot further the brotherhood of man by inciting class hatred.
You cannot build character and courage by taking away men's initiative and
You cannot help men permanently by doing for them, what they could and
should do for themselves.

Attributed to Abraham Lincoln but real author is William J.H. Boetcker.
Above is a version of the original.


Real estate on sale! 33% off! 

Via Mitch, the other side of a housing down-cycle:
This month more than 2,600 houses were on the market at less than $120,000 -- a 608 percent increase over the same period in 2005, according to the Minneapolis Area Association of Realtors. The inventory for all price ranges increased 62 percent over 2005.

The return of the starter house is the upside of the down housing market. And buyers are taking notice.

Now this may not mean the end of the housing slump is near, or that cutting prices is a good thing. But the overhang in housing inventory has to be worked through somehow, and with starts declining relative to sales, stories like this one might be the first sign of how we are working through the housing bubble.

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The first of many posts on the legislative session 

Over this week I'll post thoughts on the rush to end the Legislative session. Gary has posted liveblogs of the Pawlenty and DFL leadership fly-arounds if you want the snippets. But here's my first thought.

I hate levy limits.

Not so much because there are incentives to always raise your taxes to the cap. Not that they are wrong about this, but that it's not the only reason I would oppose them. (It would be simple to amend that to say that you can raise 3.9% in the first year, by 7.8% over the two-year-ago level in the second year, etc., if that was the only problem.) And not because they are getting $60 million in return for the cap through a new LGA methadone injection. The problem is a local control issue, as St. Cloud Mayor Dave Kleis notes:
We have our own policies limiting the increase to growth and inflation. As a legislator, I've always believed strongly it's a local control issue... you have local elected officials, elected by members of the community and they should make those decisions.
For the very same reason I've always hated term limits. You want to keep sending the same wastrel back to Congress every two years? It's your right to do so. I dislike Rep. Oberstar's views, but it's none of my business if his district thinks he's a wonderful provider of bike trails and sends him back every two years; the most I can do is send donations to his opponents as an expression of my free speech and maybe write a letter or two to his district newspapers.

If a city wants to tax its citizens an additional 7% in a down economy and if those citizens return those city councilors and mayor back to office, they get what they want. Why the DFL and Pawlenty think they can make this decision better than the municipalities can, is beyond me.

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What an econ major takes 

Arnold Kling says no macro, but includes environmental and resource economics. Macro is basically a history of economic thought course in his view. I think I'm supposed to protest this as someone who teaches macro, but I would gladly trade the intermediate macro class out for a good history of economic thought class plus a course in money and banking. Kling prefers a course in finance, but my experience with finance majors in the money and banking class is that their knowledge of financial institutions is quite sterile. Of course, I drag economic history of bubbles, the First and Second Banks of the United States, etc., into the M&B class. So maybe we're not so far off. Ten years ago our department dropped history of thought and M&B from the required courses in favor of more electives; I still am miffed about this.

I still think you need a model that says how you get the "big prices" in the economy, like the real interest rate or the price level or the real exchange rate between countries, but the principles course can do this well enough. Intermediate macro repeats that story, adds on IS-LM and AD-AS, and that's pretty much it. I argue continually that when you talk to economists my age about a policy issue, our answers almost always have some IS-LM diagram behind them, but in ten years I'll be old enough to ... teach history of economic thought.


This has been me for years 

People are running out of their two-year contracts and they're coming into the stores and they want to be able to do Facebook and they want to be able to do instant messaging and they want to be able to do e-mail and they ask for those features thinking that they're going to get another flip phone and they're walking out with a (BlackBerry) Curve or a Pearl because they're the best devices for doing those kinds of activities. And so what is the defining factor? The keyboard.
Source, from the co-chair of RIM. Those of us who have had Treos for years (I'm already past the two year mark on my 700p, after two years with a 600. Though I'm thinking Blackberry next time, particularly this one, so that I can do email from overseas. Unlocked SIM cards, yes!


Sunday, May 18, 2008

The Chronicles of Narnia, Prince Caspian #2 

In this earlier post I talked here about my reaction to the movie, Prince Caspian. My particular fascination with the film was the incredible use of technology. It still amazes me to see what can be done with human imagination allowed to reign free. Couple this environment with the technology we have available today and one enjoys a fantastic visual journey.

Others have seen the movie and posted their comments here and here. The author of the first review thinks the film producers took a bit too much liberty from the book but his kids loved it. We both agree that we need more films like this one. The second review indicates that the Prince Caspian story was weak and the movie makes for a better tale.

Take your pick of opinions but go see the movie, and take you kids.


Saturday, May 17, 2008

Michele Bachmann 

This morning I attended the monthly Minnesota Republican Women (MRW) breakfast. It was a Mother's Day celebration; many members brought their daughters, granddaughters, and other relatives.

Our speaker was Congresswoman Michele Bachmann, mother of five, foster mom of 23. Anyone who has heard her speak knows how dynamic and accurate her talks are. Michele has a law degree and masters degree in tax law from William and Mary College. She focused on two topics today: taxes and energy.

In the early 1950's, families paid about 5% of their total income in taxes; today, they pay about 50%. In 1987, when Michele was getting her masters degree in tax law, she did a projection of what her son, then age 4, would have to pay to support all the government programs put in place by liberal baby boomers. 25% of her son's earnings in his highest earning years would be needed just to pay social security for boomers. This did not include taxes for medicare, state, estate, income, etc. In total, up to 85% of what her son would earn in his 30's and 40's would go to pay for boomer socialist programs. Breaking the backs of future generations is not wise.

Energy - open American resources.
OIL - We have oil but the greens have prevented us from accessing it (ANWR, 85% if America's coastline, etc.). Hurricane Katrina was one of the worst hurricanes ever yet the 40+ oil rigs in the Gulf of Mexico run by American companies sustained zero damage. We know how to build these drilling platforms very well. ANWR - 1995, ANWR drilling was approved by the US Congress and President Clinton vetoed it. IF he had approved of this, we would not be funneling money to those who want to destroy us or hold us hostage. The funding for so much of the world's terrorism simply would not exist.

COAL - The Chinese are operating a new coal plant every week! Our politicians and greens prevent us from mining the coal. We can burn it cleanly, definitely cleaner than the Chinese.

NUCLEAR - Again, we can build safe plants. France produces almost 80% of its power from nuclear plants. America has not built a nuclear plant in 30 years.

NATURAL GAS - In the Dakotas.

In summary, if we used our own resources, we would have cheaper gasoline, cheaper heating fuels, and significantly decrease our reliance on those who wish they ruled us.

Today's Democrats are stonewalling any movement towards energy independence. You can say all you want about ethanol but it takes oil to produce it, it is not cost effective, and uses our tax dollars to subsidize it. Same for windmills. It's time for us to take our energy requirements responsibly.

For those of you who so want the government to solve this problem I have a few questions:
1 - When did a government ever solve anything at a reasonable price? (See taxes at beginning of this post).
2 - Instead of the government, what are you personally willing to give up to save energy? Not what you want someone else to give up, but what you will give up all by yourself? I've yet to meet anyone who is eager for the government to solve this problem say what they, individually, will give up.

For those of you who are now on the "get rid of plastics" bandwagon, here's a few more points:
1 - Plastic (and nylon and Orlon and rayon and polyester) come from oil. What fabrics do you want to give up? You can replace with hemp where legal and cotton but who will farm it?
2 - Plastic was designed to replace glass because glass broke, people got very nasty cuts; plastic was safer.
3 - Are you willing to give up your Ipod? CDs? CD carriers? Computers? Backpacks? Hi-tech athletic shoes? Synthetic athletic clothing? Cars? Cell phones? DVDs? The list is endless.

Remember it was boomers and their parents who invented this stuff. If you are unhappy with it, invent something to replace it. This requires degrees in the hard sciences, real mathematics, not degrees in social engineering areas.

We can solve problems because we are a free society. Totalitarian systems, thugs, bullies, governments that allow only one way to think don't solve problems - they control their people and blame others for everything. We are a nation of doers, problem solvers. When we get government off our backs and use our own resources, all benefit.

Michele gets it, she really does.


The Chronicles of Narnia, Prince Caspian 

Prince Caspian opened in movie theaters this weekend. It adapts for the big screen the fourth in a series of seven Narnia novels by C.S. Lewis.

The film includes all the special effects you would want: incredibly realistic talking animals, "living" creatures of all types (trees, water, etc.) . The ingenuity and creativity are simply amazing. Taking an author's words, in this case, those of C.S. Lewis, and making them come alive is a skill and talent we just assume is the norm - it's not.

The basic storyline is straightforward: Prince Caspian, the 10th in a line of Caspians, learns that his father was murdered by his uncle, the evil prince, Miraz. His tutor saves his life by helping Caspian escape from his uncle. As Caspian flees to the magic woods of Narnia, he gets hurt, uses a magic horn and unknowingly summons the four English children back to Narnia to fight the good fight because Caspian's people now have a chance to be set free from their oppressors.

This "war" movie like the blockbuster "Lord of the Rings" trilogy recognizes that it can be right to fight for truth, decency and to remove a tyrannical ruler. One hears the movie's characters debating whether or not they should make the fight; they conclude a chance for freedom is worth the risk. This movie's approach contrasts with the latest attempts by Hollywood to portray war as always wrong, especially with American civilians and soldiers as villains. These films have done very poorly at the box office. Perhaps this is because Hollywood does not understand that there are good fights and freedom must be defended, not taken for granted. Hollywood's bias showing Americans as bad guys simply doesn't go down well with us. Disney understands people will see war movies, even if fiction, when the good guys win.

C.S. Lewis, a WWI wounded soldier, truly understood the horrors of war but he also understood that tyranny was worse.

Update - May 18
First comment by someone on the left: "Comparing Caspian to an illegal invasion of Iraq. Good one!"

This is typical of people on the left. If you read the above post, there is no mention of Iraq, Afghanistan, WWII, Korea, Vietnam, WWI, etc. yet the commenter immediately jumped from "some wars" to concluding I'm talking about Iraq. This is the same way Democrat Presidential candidate, Obama responded when he automatically assumed Bush's comments about appease-
ment were directed at Obama. Frankly, one might conclude Obama really is an appeaser or he would not have reacted so strongly or quickly. Hmmmm

The comment author also has a unique definition of "illegal" war. The US Senate, including a majority of Democrats and Senator Clinton voted to support the Iraq invasion. Subsequent reports have also documented Iraq's ties with Al Qaeda and its role in training suicide murderers. In addition the US had the support of 43 coalition nations. We may disagree about the Iraq war but there was nothing illegal about it. Just because the Democrats want to find a way to trash our president, does not make denying reality ok.


Friday, May 16, 2008

Seasonal employment 

The StarTribune announces that Minnesota lost 10,400 jobs in April. About a third of those jobs were in construction. So I went to look up the data, and the first thing I notice is that they are using the seasonally adjusted time series. When you look at the non-seasonally adjusted data, we added 24,650 jobs, including 6,319 in construction. It's worth noting two things: Easter came early, shifting some seasonal retail and leisure economic activity into March; and it was a cold, wet and snowy April. The latter would help explain the shortfall in construction versus a normal April.

That would be the demand side. The supply side is also interesting. From the STrib article:
In the past 12 months, Minnesota has added 19,000 jobs -- or an average of about 1,580 every month, noted Oriane Casale, DEED assistant director of labor market information. "We'd need to add about 2,539 jobs per month to keep up with population growth," she said. "However, there is evidence that [Minnesota's] population is growing slower that the demographer's office projected."
The unemployment rate has held almost constant over the last year, with 24,000 more workers in the labor force. So are we just not adding more workers to the labor force, or are there workers out there waiting to be employed? There have been fairly small fluctuations in the employment-population ratio. I'm still good with my call of a short and shallow recession.

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Beneficiaries of globalization: The Midwest? 

Bill Testa has a fascinating post on the amount of foreign direct investment (FDI) coming into Midwestern states. The two with the most? Indiana and Michigan. I would never have guessed this.
The Business Research Center at Indiana University (BRC) has recently issued an extensive report that reviews the global environment for FDI with an emphasis on Indiana and surrounding Midwest states. According to U.S. government data as of 2005, Indiana�s economy ranks 8th in the nation and first in the region as measured by the ratio of FDI to state economic output. (Michigan also exceeds the U.S. average.) As measured by jobs, the United Kingdom and Japan were virtually tied as the number one source of FDI into Indiana, each accounting for 32,000 jobs.
Could it be that voters this November in those two states might actually look with favor on political candidates that support free trade? McCain was heckled in Michigan during the primary there in part for saying jobs that had left Michigan were not coming back. He could point out that new jobs are coming in, by the very same mechanism.

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Laws are not optional on campus 

While I was ill, there was a story about a drug sting operation on the San Diego State University campus. Today's Chronicle of Higher Education (subscriber link) tells that the university sought law-enforcement help, which appears to have caused some to question whether the university has treated its students right.
[W]hen a freshman at San Diego State University died of a cocaine overdose last May, the campus police chief decided to pursue a full-scale investigation. In December he summoned undercover agents from the federal Drug Enforcement Administration to pose as students and roam the campus in search of illegal drugs.

Last week San Diego County's district attorney disclosed the yearlong investigation�Operation Sudden Fall�and its outcome: 125 arrests, including 95 students. Law-enforcement officers seized $100,000 in drugs, $60,000 in cash, and four guns. University officials suspended six fraternities, as well as 33 students charged with felonies, and congratulated themselves.

"Drug use is a concern on virtually every campus in our country," the president, Stephen L. Weber, said in a written statement the day the arrests were announced. "SDSU has taken this action to confront it directly."

But such a sweeping drug investigation raises high-stakes questions. When should a university punish instead of educate? Does inviting undercover federal agents onto a campus strain an administration's relationship with its students? Will trying to solve a problem make an institution notorious for having it?

San Diego State officials have no regrets. "It's not just that we were looking at a problem of degree and seeing more drug usage than previously," Mr. Weber said in an interview with The Chronicle. "We're talking about what is at least now alleged to be drug trafficking on campus, things like loaded shotguns and semiautomatic weapons. ... That's serious business."

Weber, who was vice president of academic affairs here at SCSU in the 1980s made the mistake of signing off on my tenure, is taking heat from some students and faculty for bringing law enforcement in, with one faculty member even going so far as to say "ultimately ... they may be coming in to investigate or squelch political dissent." Our local organization of campus fraternities and sororities sent out a statement this week considering the San Diego State frats' behavior to be "not consistent" with what SCSU organizations represent.

What responsibility does a university have to its students' privacy versus its responsibility to uphold the law (and protect itself from liability should students overdose on drugs?)


Thursday, May 15, 2008

John Bolton 

Tonight we attended the 2008 Annual Dinner sponsored by the Center of the American Experiment. The keynote speaker was former US Ambassador to the United Nations, John Bolton. His 35 minute talk, given without notes, was packed with information. What follows are highlights.

China - though the last 20 years have been commercially successful, from 1900-2000 China was a nation in constant upheaval. Mao's dictatorship resulted in 30,000,000 deaths in the 1950's along with the wanton destruction of 1000s of years of Chinese culture. Today China is trying to eradicate the Tibetan culture. It is investing substantial sums in military buildup. We don't know which China will be the China of the future and we need to be prepared for all options.

Russia - because of their oil reserves. Russia is again flexing its muscle and reverting to a Czarist mindset - central control of everything. In the last election, teachers told students their grades would suffer if their parents voted the wrong way (ie, against Putin's hand-picked successor). Russia does have a few problems, though - no treaties with anyone and it doesn't like the downside of Islam.

WMDs - these simply cannot fall into the hands of rogue nations. Many of these nations operate with different logic, they value death over life. Therefore, the usual mindset used in previous historical negotiations will not work.

Iran - probably is closer to nuclear capabilities than anyone wants to admit. Ignoring this problem in the hopes that a "just in time" (JIT) understanding will protect us is naive at best and possibly very destructive. Iran has different definitions for "proliferation," and other terms related to their nuclear arsenal. Hence, they can say "yes" to the west and continue to build their nuclear arsenal.

North Korea (NK) - in essence, a nuclear criminal state. The height of its people is 6" shorter than that of South Koreans - they were the same height in the 1950's. Famines have occurred multiple times over the last 60 years. They routinely counterfeit American currency and their diplomats are often using diplomatic pouches to run drugs.

What about negotiations, the panacea of the left. Six nations have been negotiating with NK for the last 15 years - nothing has stopped their nuclear program, nothing - it keeps moving forward. The Big 3 in Europe have been negotiating with Iran for the last five years - same result, nothing has stopped their nuclear program. These nations use negotiations to buy time to build what they wish, which in turn will be used to destroy us.

There are two options in relation to Iran: regime change; destroy nuclear assets. We have not encouraged regime change yet the Iranian mullahs are in a precarious position. Ethnic differences abound, unemployment is high, the youth see that their neighbors are better off but they have no means to topple the mullahs. As for destroying their nuclear assets - time is running short.

Finally, there are India and Pakistan both with nuclear power. Pakistan is unstable and with the wrong people at the top, they could easily sell their nuclear technology to the highest bidder.

Bottom line: Whom we elect this November will have major repercussions throughout the world. We've tried the negotiations; on May 15th, Bush discussed the futility of the negotiation mindset - it doesn't work when the other side uses talks as a mechanism to gain an edge in their nuclear development. Our objective should be to keep these powers from getting into the wrong hands.

One final point, mine: We have had nuclear power for over 60 years. We have not used it since WWII and only used it there after warning the Japanese we had an incredible power. The Japanese refused to surrender. After the 2nd hit, they did. As destructive as those two strikes were, had we had to resort to a land invasion the casualties would have been significantly higher.

We have not used this power - the rogue nations with this power will not hesitate to use it. As Mr. Bolton said, they have to be stopped or we all will pay (my paraphrase).


It took me this long to read it 

MinnPostToasties runs a long, gushing review of Sen. Tarryl Clark, repeatedly bringing up "she could be governor". It does its best to portray her as moderate; I've heard her "my daddy was a Republican" pitch before. Those of us familar with her views on taxes, what bills we try to pass in response to a bridge collapse, stadium taxation without referendum, or denying access to a business development tool preferred by businesses in her own district, might not be as in awe of Clark as the Post is.

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I came home from work and turned on Special Report just in time to see the Grapevine's coverage (third item) of the story of the service dog. The graphic carried only the picture on this blog and the university's seal. I'm told that the university administration has received a number of angry emails about it. As I mentioned Tuesday, it's not clear what the university could have done here, and I'm really surprised that people are writing to the university rather than the school district, which would not guarantee the service dog's safety and concluded that the threat the student teacher perceived was "a misunderstanding" and that "the student did not make a direct threat." As a reminder, here's one paragraph from the original story:
Things didn't go as well at Tech, Hurd said. Students there taunted his dog, and he finally felt he had to leave after he was told a student made a threat. Hurd met with {Tech High assistant principal Lori} Lockhart but said he did not feel comfortable continuing.
Given how highly trained these dogs are, and the expense that entails, there is reason to wonder about the school district's behavior in not providing guarantees over safety. One of the districts school board members is, I think, trying to talk about the issue, but be sure to have coffee while you read this and count the number of connecting flights he takes to make his point. If you can find it at all.

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Wednesday, May 14, 2008

Where we can agree 

Two quotes about the requested state subsidy of the Mall of America:
1. Mall of America executives, planning a $2 billion expansion of the mall, are continuing to press for nearly $400 million in state subsidies. Mall officials warn that the mall has "no chance of being built" if the subsidies are not given. If they have such a crummy business plan, maybe they just shouldn't bother.

2. What are the folks who own the Mall of America going to do if they don�t get their state subsidy � build Phase II in Iowa?

Source 1, 2. Interesting.

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SPR: Buy high, sell never? 

The Christian Science Monitor reports that the Congress has passed a bill that does something I consider good: Stop buying oil for the Strategic Petroleum Reserve. The economics is quite simple, as Thomas Sowell explains: Gas prices are high because demand is up.
Is there anything complex about the fact that with two countries-- India and China-- having rapid economic growth, and with combined populations 8 times that of the United States, they are creating an increased demand for the world's oil supply?

The problem is not that supply and demand is such a complex explanation. The problem is that supply and demand is not an emotionally satisfying explanation. For that, you need melodrama, heroes and villains.

It is clear that many people prefer to blame President Bush. Others prefer to blame the oil companies, who have long been the favorite villains of the left.
Local blogger Political Muse does us the favor of posting the summary of the bill that includes the one good thing. In one fell swoop, it takes $17 billion in tax breaks back from oil companies, imposes a windfall profits tax, and allows the executive branch to impose price controls. It's the audacity of dopes who want to create villains rather than deal with the real issue of short supplies. Betsy Newmark provides more evidence of how Democrats have prevented the release of pressure on that supply.

Frankly, I have no idea why we have an SPR, though, and if this is the first step in eliminating it, it would be a good thing. SPR is a Cold War holdover that's outlived its usefulness.

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Tuesday, May 13, 2008

Pushing on a string 

Ed Lotterman looks at the latest Senior Loan Officer survey from the Federal Reserve and sees credit crunch:
You can lead a horse to water but you can't make it drink. Keep that in mind when reading how much the Fed has driven down interest rates. In finance, you can increase the amount of money available for lending, but you cannot force banks to make loans. That limits the broader effects of plentiful money on the economy as a whole.
What Lotterman describes is the classic problem of "pushing on a string", that monetary policy works more quickly and surely when it reins in credit than when it tries to inject liquidity into the system. We've known this could happen from looking at interest rate spreads (see Krugman for example), but results like this from the survey are more damning:
About 55 percent of domestic banks�up from about 30 percent in the January survey�reported tightening lending standards on C&I loans to large and middle-market firms over the past three months. Significant majorities of respondents reported tightening price terms on C&I loans to these firms, and in particular, on net, about 70 percent of banks�up from about 45 percent in the January survey�indicated that they had increased spreads of loan rates over their cost of funds. In addition, smaller but significant net fractions of domestic banks reported tightening non-price-related terms on C&I loans to these firms over the past three months.

Regarding C&I loans to small firms, about 50 percent of domestic respondents reported tightening their lending standards on such loans over the survey period, compared with about 30 percent who reported doing so in the January survey. On net, about 65 percent of banks�up from about 40 percent in the January survey�also noted that they had increased spreads of C&I loan rates over their cost of funds for these firms. In addition, large net fractions of domestic respondents reported tightening other price-related terms, and smaller fractions tightened non-price-related terms on C&I loans to small firms.

San Fran Fed president Janet Yellen today is calling this a credit crunch in no uncertain terms.

Axel Leijonhufvud argues that this moment brings to a close the debate over inflation targeting and central bank independence. On the former, we have long argued that a central bank has financial stability responsibilities, but holding down inflation is part of creating that stability. Leijonhufvud argues that the late Greenspan Fed was using inflation targeting; I think most observers would disagree. The weight on output in its implied Taylor Rule was greater than zero, if Greenspan even used it. On central bank independence, Leijonhufvud assumes that the political process is best for deciding whether debtors or creditors take the brunt of adjustment costs when deflating a bubble. I don't see why this is necessarily true; politics would not need to look at minimizing those costs.


Additional coverage of the service dog story 

After covering the story on Ed's show on Hot Air, I was amazed to hear the original story read this afternoon by Rush Limbaugh as I drove back from a haircut. Gary and the Lady Logician both comment as well, with a reminder of what the Americans with Disabilities Act says and a description of the service these dogs provide. I was reminded by Ed that his wife has used service dogs and been denied service by cab drivers in the Cities who were of the Muslim faith.

A couple of points of note: SCSU's teacher development program places a very substantial number of students in District 742. The district can choose not to accept those students. As such, I think the university is a bit boxed in on this; I wish our university could say something stronger, but there are valid reasons for reticence. Second, I had missed the point entirely but Rush's reading reminded me: The Somali children at Talahi Elementary were provided paper so that they could pet Emmitt while not violating their religious beliefs. If touch is the issue, the solution had already been found to keep the student and the dog in the classroom.


Monday, May 12, 2008

Media alert 

I am going to be on the Ed Morrissey Show at 2pm CT.


Cheap signaling, primary style 

I just cannot get excited much over the idea that the GOP primaries are signaling disdain for McCain's general election campaign in the fall. With the outcome already determined, it's costless for those who want to engage in protest votes to cast ballots for Ron Paul, Mike Huckabee, Mitt Romney, or King Banaian. Well, I don't think anyone did for me, but the point's the same: Voting in a GOP primary after McCain went over the top is a consumption activity by party activists, some of whom still want to say something about the party's future and where the base is vis-a-vis McCain. It says quite little about whether these same voters will invest in the McCain campaign in the fall.

When rights collide 

I find this story a bit bizarre. A student teacher from SCSU training in special education , Tyler Hurd of Mahtomedi, has a medical condition that occasionally causes him to have seizures. A service dog protects the young man, with a pouch to help assist the man when he is down. He was training at St. Cloud Technical High School, but was forced to leave the school before completing his training because the dog's safety was threatened. Hurd and his dangerous dog Emmitt are there to your left.

You need to go down about ten paragraphs in the story to get what the debate is about, but let's pick up the story at graf 8:

The school district and university are working to make sure a similar situation doesn't happen.

Kate Steffens, dean of the college of education at St. Cloud State, and Tech assistant principal Lori Lockhart met Thursday.

The threat came from a Somali student who is Muslim, according to Hurd, St. Cloud State and school district officials.

The Muslim faith, which is the dominant faith of Somali immigrants, forbids the touching of dogs.

So let's take a look at this as a case of competing rights. On one side we have a student with a medical disability. One would think that the Americans with Disabilities Act would allow this student to participate to the fullest extent possible in pursuing his goals, which is to teach in special education. To do so, he is supposed to train in both elementary and secondary school settings. (The article notes that Hurd had no such problems with Somali students at his elementary school assignment.)

On the other side, we have a student at Tech HS whose faith considers dogs unclean and is asserting his right to education in an institution without dogs. This not only affects student teachers; any student with a sight or hearing disability may use a dog for assistance and might want to also attend Tech HS. Whose rights dominate?

Julia Espe, director of curriculum, instruction and assessment for St. Cloud school district, said the school needed to do a better job communicating.

�I think it was a misunderstanding where we didn't really prepare either side for possible implications," Espe said.

Espe said the school's investigation determined the student did not make a direct threat.

Maybe so, but it was enough for everyone to agree that Hurd could waive away his last ten hours of student teaching.

Steffens said it is important to respect different cultures and the rights of disabled students.

�I think this is part of the growth process when we become more diverse," Steffens said.

But when rights collide, as they did here, whose rights did they choose to uphold first?

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Friday, May 09, 2008

Housing bill follies 

I noticed Hugh has asked that we slow down on the Frank-Dodd housing bill. I got a press release from Rep. Michele Bachmann stating the bill is "deeply flawed".
"The bill even includes a $35 million dollar slush fund for trial lawyers. And according to the Congressional Budget Office, the bill would help refinance the loans of only 500,000 people � less than 1% of homeowners � at the expense of the 51 million homeowners who pay their loans on time, however much they may be hard-pressed to do so.

"The bill is so broad that homeowners covered could deliberately default on their loans to cash-in on the taxpayer bail-out. In others words, a taxpaying single mother working extra hours to pay her mortgage on time could be asked to help pay the loans of someone who intentionally defaulted.

"Lenders and servicers can game the system as well. The bill invites them to cherry-pick only their worst loans to dump onto American taxpayers � including loans people secured through outright fraud.
Hugh's request that we need more time to look at it would be met by the CBO report on the bill that Rep. Bachmann mentions. They estimate the subsidy at $1.7 billion, or $3400 per household refinanced. That on top of the Heritage report on the bill should be enough to convince most that it's a bad idea.

Unfortunately it passed, and thus gives the banks yet another fillip in return for bad decisionmaking. And, as Dean Baker points out, it is just delaying the needed price adjustment in housing.

For those Minnesota congresspeople who voted for the bill (read, all the Ds plus Rep. Ramstad), ask this: Do you think this money should be used to bail out the Parish Homes development? Are you sure it wouldn't be?

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Legislative salaries: Yer doin it WRONG!!! 

I had some private conversations with people on both sides of the ideological spectrum here after the per-diem debate, and at that time I suggested getting the problem solved by some changes in how legislative salaries are set. Current law says you can fix salaries for the upcoming session, but not your current salaries. As a result there was pressure to increase per diems as back-door salary increases.

So what does our senator Tarryl Clark propose? The worst of both worlds:
Lawmakers could vote next week to ask Minnesota voters to take the job of setting their salaries out of their own hands.

However, they will likely keep the power to increase their per diem and other forms of reimbursements where they now sit � with committees of their senior members.

...If approved, HF 3796/SF 3793 would give the job of setting legislative and executive salaries to the state�s Compensation Council, which now only makes recommendations.

The bills originally would have given the council � which consists of 16 citizens appointed by legislators, judges and Gov. Tim Pawlenty � the power to determine legislators� daily reimbursement rates for food and other expenses, known as per diem.

But members of the Senate and House Rules and Administration committees, who now set those rates, amended the bills to retain that power.

�The problem isn�t per diem. The problem is salary,� said Clark, who saw her bill through the Senate committee Thursday. She is the committee�s vice-chairwoman. �I believe if compensation changes, per diem will be modified downward.�

No, no, no. First of all, Clark is saying "hey, give us a salary increase and then we'll see if we can reduce those per diem. Trust us." But you obviously don't think we trust you because you could have voted salary increases yourself before. Your rules committees have proven their distrust of the system by not putting per diem rates in the hands of the Compensation Council, which has the power and the knowledge to do this. Under this bill, the Legislature could still compensate itself through per diems if it didn't like what the Compensation Council came up with. It changes no incentives and abdicates responsibility for choosing one's own salary.

I wish she was running this year. "The problem isn't per diem" is a great line when used by someone who gets $96 a day. I'd love a chance to ask her how she spends hers. You really want me to trust you to reduce that once you get your salary?

And notice, she got it not just for the days the legislature is in session, but for all the committee meeting days she took away from the capitol.

Meanwhile, last Friday oral arguments were heard in the case of Citizens for the Rule of Law's suit that we discussed last February. The AG's office is arguing that only it can bring a case against the legislature and that citizens do not have standing to file the suit. That motion should be ruled upon sometime this summer.

Here's the simple solution: Move both salaries and per diems to the Council, and cap the number of days on which per diems are paid to, say, the number of legislative days plus twenty, or some such. The symbolism of the cap would do wonders.

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Not such a great deal 

By now most of you probably heard of the 23-cent-pizza promotion that Papa John's put up after one of its franchisees in DC printed "Crybaby 23" t-shirts for a Wizards-Cavaliers playoff game after Lebron James (#23 of the Cavs) was accused of whining too much about rough play and not getting foul calls. The lines stretched on for about three hours, leading some to wonder why people wait in line. If the pizza costs $12 normally and you wait three hours standing in line to pay $.23 for it, what's your implied wage? Matt Ryan argues that standing in line is not a cost of the pizza but part of the experience.
...sure, I had to wait in line for 3 hours to get a cheap pizza, but how can I possibly value being able to tell my friends for the indefinite future? I don't believe it's entirely separate from betting longshots at the racetrack-- the story has value, and maybe because it's indeterminate exactly how valuable it is, you end up with individuals massively mis-pricing it.
I don't know how it is we know it's mispriced, though. Any good that I purchase with unknown benefits has some ex post accounting of benefits and costs, but I don't usually call that some mistake in price. For example, I'm forced by my convalescence to listen to a lot more of my purchases on iTunes. (Embarrassingly, in the eight months since I bought my iPod, I have purchased over 150 songs. In this way, I've never grown up.) Some of them are fills for playlists I write, and often I've pulled them out as bad ideas after sinking my $.99 into the song. But this was true when I bought albums, 8-tracks, cassettes and CDs. And some I get a great deal on; I've ended up playing the absolute hell out of Neverending White Lights, which I kind of stumbled on one night and bought two CDs worth after hearing three songs. Are all of these misprices ex ante? I think not.

OB LeBron, who's playing against my C's right now: It's natural in most superstars' careers that they begin to expect some respect from the refs. I obviously didn't get much time to see the Wiz-Cav series, but roughing up the one superstar when the rest of the team looks suspect isn't unusual, and it challenges the league office to see if they'll blatantly cover for the superstar they wish to promote by suspending the other teams' hackers. (They did in this case.) The problem for LeBron against the C's is twofold. First, he is playing against a much better defensive team that uses its own semi-superstar (Pierce) to guard him. Second, he's encouraged to do this by his coach's constant whining about calls, and that coach's insistence on running a 1-4 set for LeBron at the top of the key, basically saying "here, drive by Pierce and then meet Mr. Garnett." LeBron can't expect calls there, and he knows it. It's nice to see there's one coach in the league worse than Doc Rivers. When the Cavs lose this series, Mike Brown should go.

And LeBron isn't even the worst whiner. I think someone vintner needs to market $.21 Timfandel.

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Economic hydraulics 

A very interesting article on the use of a machine by the famous economist Bill Phillips (of Phillips curve fame).

It is 2 metres (7ft) tall, 1.5 metres wide and a metre deep. It runs on water and most of the time it is screened off at the back of a lecture room in Cambridge. But when the nine members of the Bank of England's monetary policy committee announce their latest decision on interest rates today they will owe a debt of gratitude to the computer built in a garage in south Croydon by Bill Phillips - an engineer turned economist from New Zealand - almost 60 years ago.

A sensation when it was unveiled at the London School of Economics in 1949, the Phillips machine used hydraulics to model the workings of the British economy but now looks, at first glance, like the brainchild of a nutty professor. Where the Bank's team of in-house economists are equipped with state-of- the-art digital computers, the profession's first stab at modelling was very much a do-it-yourself affair with a whiff of the Heath Robinson about it.

The prototype was an odd assortment of tanks, pipes, sluices and valves, with water pumped around the machine by a motor cannibalised from the windscreen wiper of a Lancaster bomber. Bits of filed-down Perspex and fishing line were used to channel the coloured dyes that mimicked the flow of income round the economy into consumer spending, taxes, investment and exports. Phillips and Walter Newlyn, who helped piece the machine together at the end of the 1940s, experimented with treacle and methylated spirits before deciding that coloured water was the best way of displaying the way money circulates around the economy.

Irving Fisher also used hydraulics to model an economy because he didn't think the math was there to work out the general equilibrium (Gerard Debreu finally worked this out in the 1950s.) Hydraulics worked for Phillips, however, to demonstrate a coordination problem of policy: early demonstration of the machine displayed the difficulties that can arise when monetary and fiscal policy are not synchronised. Phillips asked one of his students to be chancellor of the exchequer and control taxes and spending; the other to be governor of the Bank and control interest rates. Predictably, the policies were uncoordinated and the upshot was that water overflowed on to the floor.
Now if they could work out that the two people pouring the water are engaged in a game...

(h/t: Tyler Cowen)


Thursday, May 08, 2008

Rank ignorance 

Rankings of things tend to annoy me. I would always prefer to know the actual values involved, but we tend to like lists. But they get you in trouble when people try to change how their measuring things.

Today's example is from our local paper. It takes exception with the Tax Foundation's rankings, largely because the Foundation thinks tax efficiency is a proper goal of public policy. The Foundation adds federal taxes to its ranking of the states, though as the link points out, removing federal taxes changes Minnesota's ranking not at all for 2007. Of course the letter writer forgot to tell you that.

He then switches to a report issued by the Minnesota Taxpayers Association, which includes both data based on taxes per capita and taxes per $1000 personal income. Using the latter measure, and using all state and local taxes, he finds that Minnesota ranks 23rd. Of course, he is now comparing apples and oranges. But he says "That one state has higher-income residents than another has nothing to do with the level of state and local taxes."

But the reason for his letter, that Rep. Steve Gottwalt (R-St. Cloud) has proposed the state corporate income taxes are too high, is belied by his own report use. The state ranks 8th in corporate income taxes per $1000 personal income. The letter writer uses a measure of all taxes to rebut a specific point about one tax, by playing fast and loose with which rankings one uses. Our top marginal corporate tax rate, 9.8%, is sixth-highest in the nation.

He also plays a little fast and loose with his choice of who is a non-partisan by quoting at the end lovingly from something published by the Economic Policy Institute. If you are going to call the Tax Foundation "extreme conservative", then you don't get to use an institute run by folks like Robert Reich and Robert Kuttner as being unbiased.

Charlie Quimby pointed out something similar in the Mn2020/Mn Free Market Institute spat over Matt Entenza's 32nd ranking. It's not a fruitful debate (and I say this as a fellow of the latter, with some trepidation.) The question is whether taxes effect people's willingness to truck, barter and exchange in Minnesota, and choosing between Minnesota and other states. Rankings and arguments over what's in the numerator or denominator of this or that ratio won't help solve that debate.

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A brief note on Iraq loans 

I am puzzled by the whole idea that we should expect Iraq to pay for reconstruction through loans rather than grants, as Rep. Tim Walz suggested yesterday, and which has been floated by senators including our Norm Coleman. The parallel story I would tell is to think about my own desire to educate my child versus the state's interest in an educated workforce. Both of us have the same interest; using a state subsidy to finance my child's education shifts the price I pay for education, but if the state does not want to buy as much as I would myself, it's just giving me money. The child gets the same education either way, it's only a question of who pays. The question is a question of marginal analysis.

Who has a greater stake in Iraqi reconstruction at the margin? If you believe the GWOT is aided by the establishment of a functioning democracy in Iraq, it seems reasonable to argue that Iraq would choose less reconstruction and transformation than would be best for U.S. interests, and so it makes more sense for the U.S. to pay. Besides, the Walz formulation of Iraqi oil money helping us finance war in Afghanistan sounds a little too mercenary. That would be made only worse if you do not believe our anti-terrorism strategy is advanced by stabilizing Iraq.


Wednesday, May 07, 2008

Why a property tax? 

I appreciated LL's coverage of the floor debate of HF3149, which passed with an 80-52 vote, including five DFL legislators opposed. The bill, the darling of Tax Committee chair Ann Lenczewski, completely upends the basis of a property tax, in a state where we rank about in the middle of property tax collections.

There is debate whether the Revenue Department's testimony, mentioned by the Taxpayers League, that 69% of taxpayers would see a net tax increase under this formula (because they would lose the ability to deduct state property taxes from their state income tax, which for some will cost more than the property tax relief advertised). I do not find anything on Revenue's website with the 69% number, and if someone wants to point me to that analysis I would eagerly read it. It doesn't sound implausible, however. The state income tax has always been set to tax relatively lightly the "perfect MN family", with a mortgage, kids in school or day care, etc. Single renters making more than $35,000, I've always thought, don't get treated so well. As I mentioned when I filled out #1's taxes last month, if you don't have itemized deductions in Minnesota, you tend to pay in at fairly low income levels.

There's also the removal of the circuit breaker on local property tax increases. Part of the property tax refund that HF 3149 repeals is to shield homeowners from sudden increases in property taxes from, say, new levies passed by local government. But you still had to pay some (I make it as 64% of a property tax increase stays with you, the state refunding the remainder. The House Research analysis makes no mention of the income tax recapture.) That 64% is enough to keep some people from voting for your new local project, which makes local governments unhappy. Now, however, if you end up with taxes greater than 2% of your income because of a levy, every last dollar is relieved from your property tax: It is paid by the state out of its income and sales tax revenues. It is an attempt to tear down the barrier to greater government spending -- the Truth in Taxation statement that tells you "vote for this, and your taxes go up." The DFL, along with the LGA booty it distributes under this bill, takes a brake off of local spending.

But the truly most bizarre portion of this thing is the premise Lenczewski is using for the bill, that your property tax depends on your income. Why do we tax property, anyway? Property provides us with a stream of income, much of which is not realized. My recuperation from surgery this week has helped remind me I live in a nice house, in a great neighborhood. Many of the services I receive are non-monetary, and many of them are the result of the city of St. Cloud's public expenditures, such as the paths behind our houses that travel up from Whitney Park through the old airfield that pre-dates the development I live in. The city provides flowers that I am walking by along that path. It provides these services to everyone living in this area, true public goods. Since I am receiving that benefit as the result of the property I own, should I pay for it by a tax on property or a tax on income? We tax property precisely because the flow of its benefits are non-monetary. And the removal of the circuit-breaker says we can increase benefits to all property owners -- who will enjoy those in equal share -- but that we will tax only those who have non-property income, labor income, in excess of what the Minnesota DFL decides is "enough".

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Well, not quite THAT bad 

Paul Mirengoff says Obama is the favorite now, and by more than a little:

I consider Obama the favorite. One can usually predict the outcome of the general election, and come pretty close on the margin, by considering just a few variables: how the economy is doing, whether we're at war and how popular the war is, which party holds the White House and how long it has held it, and how popular the president is.

This year, these "fundamentals" point to a Democratic victory of at least 10 percentage points.

I actually know a thing or two about such models, having written a dissertation on political business cycles and a couple of papers regarding electoral behavior. A model many of us use as a reference is Ray Fair's Predicting Presidential Elections. It's written by an economist so it favors some of the same variables Paul is using, including measures for war. Fair assumes the war variable currently registers as a zero, so hang on there for a minute while we check everything else and then see whether or not the belief that America is in a war matters for the calculation.

Fair has a calculator you can use to test your own prediction. I plugged in 0.9% for GDP growth forecast for the first three quarters of this year, based on last week's announcement of a 0.6% first quarter growth rate, assuming zero for Q2 and 2.1% for Q3 (these are approximately the WSJ Economist survey data from April; it's possible some of the Q3 growth gets pulled into Q2 because the stimulus checks seemed to come out earlier than we thought, but for this calculation that's a wash.) Inflation over the second Bush administration has averaged 2.8% per year. I'm leaving it there as the baseline; we'll play with that in a bit. The last thing you need is a measure of "good news", or the number of quarters real per capita GDP growth was over 3.2% on an annual basis. I see three such quarters (2005q3, 2006q1 and 2007q3). Using those values, I get 48.61% as the Republican share of the two-party vote total. If you'll guess Barr, Nader and the other fringe candidates draw 1% of the total vote, that gives McCain 48.1% of the vote and Obama 50.9%, a difference of only 2.8%, not 10%.

Inflation doesn't matter too much to this, given that the equation calls for all 15 quarters to be factored in and 13 quarters are in the books. If I add an additional 1% to q2 and q3, it cuts McCain's vote share only by about 0.1%. Inflation this summer may make us feel crabby towards government, but I'm not inclined to believe voters will visit the sins of the Fed on McCain.

Could the war matter, and if so how much? Douglas Hibbs has long been the father of the "bread and peace model", and he reports a comfortable 6-8% Democrat margin. But his model only ascribes a loss of .75% to the cumulative fatalities in Iraq; the rest is his estimation of smaller impact of the Bush expansion than Fair's. Fair tested his model using shift variables for WW1, WW2, and Korea (not Vietnam, a story for some other time). I'm inclined to use that 3/4% adjustment from Hibbs.

I think thus that the margin is much less pessimistic than Paul has painted it. McCain probably starts, ceteris paribus, in a four-point hole, but not a ten. There's work to do, but given the unpredictability of the campaign so far, I wouldn't start heading for the exits just yet.

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Tuesday, May 06, 2008

One in four home sales in Mpls market in Q1 "lender-mediated" 

The Minneapolis Board of Realtors put out today a report on the number of sales they estimate have been either foreclosures or "short sales". It is partially an attempt to get people to understand that the market for traditional sales -- where the owner is selling the house and the bank is a passive party -- has not fallen in prices nearly as fast as suggested in the aggregated data.
Not surprisingly, lender-mediated homes have seen a substantial increase in total market share over the last 24 months. The percent of total new residential listings in the Twin Cities 13-county region that are flagged as foreclosures or short sales using our methodology has shown steady growth, rising from 2.9 percent in Q1 2006 to 7.1 percent in Q1 2007 and 21.7 percent in Q1 2008.

...The actual number of traditional seller new listings has fallen by 27.4 percent over the last two years, with only 19,675 in Q1 of this year compared to 27,116 in Q1 of 2006. So clearly, homeowners are holding steady in their current residences with greater frequency and home builders are producing far less new inventory.

The market share picture is similar for home sales, with foreclosures and short sales comprising a larger portion of overall sales than they have before. In Q1 2008, 27.6 percent of total residential closed sales were mediated by a financial institution, up substantially from the first quarter of the two years prior. And the number of traditional closed sales fell from 8,896 in Q1 2006 to 4,790 in Q1 2008, while the number of bank mediated sales increased from 324 to 1,828 for the same time period comparison.
So people putting homes on the market has fallen, but the number of homes put up by traditional sellers and which sold fell by much, much more. 1828 houses either through foreclosure or through short sales has a very depressing effect on homeowners "holding steady" in their homes. They may be holding, but they're not steady.

More of the short-sale and foreclosed homes are lower-price homes, so if the rate of those homes being put into the market accelerates, the report is right to point out, that makes the value of houses look like it's falling faster than it is. But there may be many more homes out there with people not able to sell, not able to make their payments, and not able to get out of the game. Even if traditional sale prices have only fallen 3.5% over the last two years, that still means a lot of homes with mortgages repricing this year are about to be in big trouble.

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Call it a wash 

That's my verdict on the windfall profits tax versus gas tax holiday discussions you hear from the news today. I base this on the analysis at the Tax Foundation last week reminding us that taxes get shifted.
We distribute a $9 billion windfall profits tax (assumed to be borne by domestic owners of oil companies) and a $9 billion gas tax holiday. We show the results of the gas tax holiday under two scenarios: (1) the assumption made by Hillary Clinton and John McCain that the reduction in the tax will be fully passed forward to consumers and (2) the assumption of most economists that a temporary gas tax holiday would merely increase the profits of the oil industry due to the inability of domestic supply to respond to increased demand in the short run.
So it would just be a method of how the tax gets paid. Now at least one candidate wants to stop the shift,
It should be pointed out that Clinton attempts to reconcile these two assumptions with a provision that would force the Federal Trade Commission to mandate that the tax cut be reflected in the price at the pump. This is the worst provision of them all: essentially, she wants to control the economic incidence of a tax via legal mandate. Such a policy is economically equivalent to price controls.
And you wonder why we don't trust her with health care! But aside that, it's the legal incidence that is changing, not the economic burden, between the Obama and Clinton/McCain plans. (I know I just gave my GOP friends a heart attack joining those names. Tell me, aside the above, what are the differences between their plans?)

One curious point from the earlier link on windfall profits:

Amy Myers Jaffe, a fellow in energy studies at the James A. Baker III Institute for Public Policy just finished a two-year study looking at oil companies and how they spend their money.

The study found that for the five big international oil companies - ExxonMobil (XOM, Fortune 500), Royal Dutch Shell (RDSA), BP (BP), Chevron (CVX, Fortune 500) and ConocoPhillips (COP, Fortune 500) - spending on share buybacks went from under $10 billion a year in 2003 to nearly $60 billion a year in 2006.

Spending on developing their existing oil fields, however, went from about $35 to $50 billion, while spending on finding new oil fields went from about $6 billion to $10 billion.

"These companies are spending a very small amount of their operating cash flow on exploration," she said. "They are spending the majority of their funds buying back stock."

And that might or might not be a bad thing. If it was to indicate the stock was undervalued, buybacks are good as a signal of economic value. Or, it could be that free cash flow is high and that, in order to prevent managers from spending unwisely, the stockholders have money returned through buybacks. But it is also the case that buybacks might indicate slopping up the exercise of options by insiders (short story: CFO Mr. Big exercises 10mil in options on stock at a strike price of $10; to keep earnings from being diluted, the company buys back 10mil in stock -- perhaps but not necessarily from Mr. Big -- at the current market price of $25.) The buyback is in essence part of Mr. Big's compensation.

If you think that Mr. Big makes too much, you may prefer the windfall profits tax to discourage this practice. But the burden of the tax is borne by all shareholders, not just him.


Rice as nice 

The morning paper brought a story that local food vendors and restaurants -- and we have many Asian markets here for a community St. Cloud's size, one reason I love the place -- haven't experienced the widely reported shortages of rice that have pushed Sam's and Costco to set purchase limits to prevent middlemen making runs on their rice supplies.

�I believe I have enough stock," said Kim Nguyen, manager at Viet-Tien Market in St. Cloud.

When Nguyen first heard about rising prices of rice and rationing at warehouses, she was concerned that the market would not have enough stocks on the shelves.

�Then I thought it was a short-term shortage," Nguyen said, referring to a state of consumer panic surrounding the warehouse rations.

Viet-Tien Market has not rationed any of its sales on rice.

Cub Foods is not rationing rice either, spokeswoman Lee Ann Jorgenson said. Neither is Coborn's.

�We have seen prices go up, but we don't see any need to ration our stock right now," Coborn's spokesman Steve Gottwalt said.

Restaurants, such as China Restaurant and Hong Kong Restaurant in St. Cloud, also are in the clear for now.

Nguyen said some specialty rices, such as jasmine, are still easy to get. However, she is limited by her supplier to 10, 10-pound bags of basmati rice per order.

Prices go up to help ration supplies, but that's not the only thing at play here. Rice is rice, pretty much a staple and where prices aren't going to be the competitive margin on which suppliers operate. Ms. Nguyen has alternatives to where she can buy her rice. If she cannot be sure that her supplier will be with rice each week, she may seek alternative suppliers. The suppliers of course bring rice and lots of other products on which their profit margins may be higher. So a rationing in their case might help assure Ms. Nguyen that the rice will be there, and keep her loyal to her current supplier.

The Costco/Sam restrictions are another matter. Those larger chains are seeking price information, and in a noisy market they would like several transactions to confirm a change in market conditions. One speculator running out a store on a very large purchase not only inconveniences that store's other customers but also might provide bad price information to the larger distributors.


Monday, May 05, 2008

Mom of the Year - Soldiers' Angels 

Many of our readers know I ship packages to American soldiers in Iraq. I've been doing this since 2003. The group I originally linked through was Soldiers' Angels. This year, the founder of Soldiers' Angels, Patti Patton-Bader, is one of the finalists for America's favorite mom.

If you click on this link, you can go there and vote for Patti - I'd sure like it if you would. She is the mom with the medium-length dark hair, on the left side, under military mom.

Her organization, Soldiers' Angels, now operates internationally to provide letters, care packages, and comfort items to our deployed men and women as well as support for their families here at home. In addition, Soldiers' Angels provides assistance to the wounded, continuing support for veterans, remembrances and comfort for families of the fallen and immediate response to the unique difficulties that some may require.

You can just vote or you can sign up to adopt a soldier.

Regardless, this is support for our finest and bravest. We are extremely fortunate to have such an organization supporting members of our outstanding military.


Health update 

Thanks to the commenters and emailers. I've been home since Saturday afternoon, and feeling good enough today to wonder if Tylenol will do the job. Given last Wednesday night where I thought I was Bobby in that episode where he goes into prison and goes crazy to catch some bad guys, this is progress. Staples come out Thursday, it appears, and otherwise everything's normal. Even ate a little palak paneer last night -- my spice buds are badly out of shape, but the digestion handled the spinach and soft cheese well. Weather's good and I'm going for a short walk now. See you tomorrow.

Bridges respond to incentives 

Ed Morrissey is right in pointing out that the private sector works in how the I-35W bridge might now be open in September rather than in December.
Perhaps at some point, people will learn to harness the power of the private sector more completely for future public efforts as well. If we started to apply this lesson to non-emergencies as well as emergencies, perhaps we would have fewer of the latter. When we incentivize success, we succeed. When we incentivize bureaucracy, we get red tape, delays, and frustration.
I hope the planners of the DeSoto bridge reconstruction are paying attention. They might want to invite Flatiron to bid on the project. (If they could also reopen the old Flatiron Tavern, it'd do this St. Cloudian's heart good after I get done recovering.)

What the STrib article made very interesting to me was how they structured the incentives in the I35 contract to get faster delivery from Flatiron:

Flatiron-Manson was awarded the project under a MnDOT formula taking into account construction costs, time to completion and factors such as aesthetics and public-relations efforts. At the time of the award in September, critics assailed the agency for choosing the most expensive contract and the longest construction time

Now, if the bridge is finished in 337 days instead of the 437 in Flatiron's proposal, the construction period will be shorter than any that were proposed -- but will widen the cost gap.

One of the four bidders, Maple Grove-based C.S. McCrossan, offered to build a steel bridge in 367 days at a cost of $177 million. The second-shortest time was proposed by the team of Ames/Lunda, also based in the Midwest, which proposed 392 days for $178 million. The fourth bidder, Walsh/American bridge, proposed the same time frame as Flatiron, 437 days, but a lower cost, $219 million.

...State officials said last fall that the bridge closure is costing Minnesotans $400,000 a day in travel-related expenses alone. The $200,000 daily incentive was arrived at by dividing that number in half.

Gutknecht says the estimate of $400,000 a day, which was based on drive times and fuel costs, is a minimum. "When we figured it out,'' he said, "fuel was quite a bit cheaper."

So the value to Minnesotans of having the bridge done sooner is higher now than before; those additional benefits will accrue to drivers. In some sense, the incentive's value is greater when the date of completion is further into the distance. Once you cross the 368th day, there's no incentive for the low local bidder McCrossan to move any faster, unless penalties were imposed. I don't know the terms on the other contracts in re: incentives, so let's assume they all had the $200k/day incentives. It changes how I think about the contracts.

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And here, we can't even have an empty holster 

In California, a professor is denied a contract because her Quaker beliefs did not permit her to sign a contract that contained a loyalty oath requiring her to defend the U.S. and state constitutions against all enemies, foreign and domestic. James Joyner thinks this is stupid:
I swore to protect the Constitution from its enemies three times � upon matriculating as a cadet, upon enlisting in the Army Reserve, and upon commissioning � and actually deployed to a combat zone pursuant to that oath. Several times in the ensuing years, I also signed contracts to teach at various colleges and universities. None of them asked to to sign any oaths and I�d have laughed at them if they had.
I've never seen such an oath either.


ISD 742 learns the Washington Monument strategy 

You could have seen this from a mile away. The local school board, in the midst of hiring a new superintendent, has released a document that describes "a glimpse of what may happen if St. Cloud school district voters defeat a property tax increase Nov. 4."

The cuts could include school closings, mass layoffs, reductions in activities and special education, and spending reserve dollars. More ideas are funneling in as Superintendent Bruce Watkins shares the proposals throughout the district.

The ideas represent more than $6 million in cuts. When the list is put before school board members in late May, it will be whittled to $4.3 million.

"They look terrible. When we look at them, there isn't a single thing on the list that is a reasonable alternative that would not affect the education of children," board Chairwoman Deb Lalley said.

A graphic (here in .pdf from the Times) leads with closing schools. Of course that's what they want you to see; "give me my levy or we'll shoot this school." In public finance, it's known as the Washington Monument strategy.

Within the article are the seeds of the fight.
Voters in 2007 rejected a request to renew a tax passed in 2003 that provided $4.8 million a year. That caused a budget shortfall for 2008-09 that the district plans to fill with $1.5 million in reductions and $3.3 million in reserves.

...In 2007, the district was more cautious about mentioning possible reductions until later in the campaign. The philosophy has shifted to determining potential reductions about a year before they would be made.
So they said no, but the school district's reply is "you didn't really mean that, did you?" When you think about what the 2003 tax levy was for...
One possibility eliminates the 30 teacher positions that were added with money from the property tax increase in 2003. Each teacher costs the district about $45,000. One proposal suggests laying off 30 to save $1.4 million.
Note that this saves more money than closing both of the junior highs, according to the graphic. This is what school districts should be saying: We can either close a school and keep student-teacher ratios at current levels, or we can keep the schools open and lay off some teachers and let ratios rise. We've discussed that point here before, and the evidence that ratios matter for learning is tenuous. So if people want to have neighborhood schools, and they've voted against the levy last time, why not accept the word of the voters and make the layoffs?

Because teachers make lousy Washington Monuments.

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Sunday, May 04, 2008

Best paragraph I read this morning 

Gas is $3.50 a gallon and politicians are ready to lock up oil company executives. Milk is $3.50 a gallon and the same politicians can't shovel our money to the farm lobby fast enough. What statesmen.
Pat Shortridge on Friday. Meanwhile, Bill Polley dissects the gas tax holiday proposal. McCain is right on the farm bill, but the tax holiday is not well thought out.

Friday, May 02, 2008

Latest on King 

We just returned from a visit to King in the hospital in St. Cloud, about 80 miles north of here.

He was sitting up, reading his email, enjoying a number of visitors. He says it's difficult to walk much - it really tires him but he does it. He's eating solid food and is very alert. I cannot emphasize how much everyone's thoughts, prayers, notes, comments (and flowers) meant to him - blew him away - he's very grateful.

King hopes to get home tomorrow; if not then, Sunday. It will be a while before he gets back to 100% but he'll make it. His gall bladder was really bad - no microscopic surgery, the full incision had to be made. Hence, a longer recovery but at least they got it before the infection got any worse. This was serious, folks.

Again thank you all.

Supporting one blogger 

Surgery does weird things to you; you become emotional at unexpected moments; bursts of energy are wills o the wisp; many visitors come that you cannot really respond to as you want to. So anyway, to second Janet below, yes, thanks for everything, from readers I did not know I had until this week. I own my intestines again. I'm still at the hospital and will now go take a walk, which is how I get better. A few steps at a time. But I expect to go home over the weekend. Extra sutures and drains were removed about two hours ago, I'm a bit sore from that but this will pass in a few hours, I'm confident. Next week being finals week, I have some room to coast for a bit.

An orderly just asked if I wanted water with ice. In any normal circumstance I would have said thanks but that I'd get it myself. Try to be very polite, but self-reliant. One lesson I learned this week is how to accept kindness with gratitude, without feelings of obligation or shame. Not sure I knew this before. I haven't given up individualism by any stretch, but our humanity needs an opportunity to express its care for other individuals, and to know that to give people that opportunity to do it, person-to-person, is part of what makes us feel our own.

I apologize to not linking back to posts from Michael, Gary, Leo, Ed, Andy and others. I cannot get through the BlogNetNews reader for Minnesota, not enough energy. But I deeply appreciate every one. I have never felt so supported.

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Thursday, May 01, 2008

Update on King - Thursday, May 1 

My husband and I were heading to St. Cloud to visit King today. We were about 30 minutes into the trip when I got a call from King's wife, Barb. She told us that today was not a good day and asked if we could make the trip Friday or Saturday. We agreed.

I did talk with King - as he said, he was experiencing some discomfort and needs some rest. However, he also wanted to express his gratitude for all the notes, thoughts, prayers and concern. It has been over-whelming.

Again, thank you all!