4A - Thursday, April S, 2012

The Michigan Daily - michigandaily.com

4A - Thursday, April 5, 2012 The Michigan Daily - michigandailycom

be 1i*idiigan &U
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ASHLEY GRIESSHAMMER
JOSEPH LICHTERMAN and ANDREW WEINER JOSH HEALY
EDITOR IN CHIEF EDITORIAL PAGE EDITORS MANAGING EDITOR
Unsigned editorials reflect the official position of the Daily's editorial board.
All other signed articles and illustrations represent solely the views of their authors.
Imran Syed is the public editor. He can be reached at publiceditor@michigandaily.com.
Leave the 'U' alone
The state Legislature shouldn't ban unionization
Whether graduate student research assistants should have
the right to vote to form a union has been a hot topic of
conversation at the University, and it has even reached
the state Legislature. House Republicans passed a bill in March clas-
sifying GSRAs as students, and thus denying them the right to form a
union. With Republicans' legislative maneuvering, the bill went into
effect immediately, rather than waiting the usual 90 days after the leg-
islative session ends. House Democrats sued the Republicans claim-
ing they did not count the votes accurately to ensure that a two-thirds
majority was met to pass the bill. A judge in Ingham County ruled in
favor of the Democrats on Monday, but the state Legislature has no
business interfering with University matters in the first place.


I hope that we're able to resolve our nomination
process as soon as possible.
- Presidential frontrunner Mitt Romney said when asked if his fellow Republican challengers should drop
out of the primary after his three wins on Tuesday, as reported by the Washington Post.
Financial renaissance

a

On Monday, the University's Board of
Regents voted 5-3 to file an amicus brief to
support the Democrats' lawsuit. Five of the
board's six Democrats thought that the correct
procedures weren't followed. Meanwhile, the
two Republicans and Regent Olivia Maynard
(D-Goodrich) didn't think that it was their
place to get involved with legislative matters.
It's promising to see the Board of Regents.
standing up for students. The regents are sup-
posed to advocate for students, and this is
exactly the type of issue the regents should
focus on. The legislative body made an error in
judgment and procedure, and while it's not the
regents' job to point this out in every circum-
stance, it's important that they do so when the
issues affect the University.
The legislature has no business getting
involved in University matters. The Uni-
versity is a public school, and thus, the state
should have some input on its running, but
the regents are elected by a state-wide vote for
that very reason. It also sets a bad precedent
if the legislation can control the University by
circumventing the House rules. The Michi-

gan Employment Relations Commission was
holding its own hearing on the issue when the
Republicans decided to pass the bill and enact
it immediately, simply because they dislike
unions. The state should allow the University
and its regents to handle their own affairs.
As the state has continually decided to cut
funding to the University, it should now also
have less control over how the University is run.
The regents are supposed to be the state's voice
on campus, and they have decided to back the
Democrats. The state should not get involved in
a matter that only affects a small percent of stu-
dents at the University. The University should
deal with the problem without outside pres-
sures and restrictions from the state.
The Democrats prevailed in their lawsuit
because House Republicans ignored procedure
and got involved in an issue that was none of
their concern. They should have left the Uni-
versity in the hands of the regents. The regents
represent a balance between student and state
needs, and by taking a stand on an issue that
concerns a group of students on campus, they
are doing their job in advocating for both.

f someone asks, "What is the
first thing you do when you
open an Internet browser?"
what would
you say? If your
answer is logging
onto Facebook,
you are definitely
not alone.
Social net-
working is a
growing mam-
moth. In 2011, JASON
the industry had PANG JAO
1.2 billion users
and experienced
a 41.4-percent growth in revenue
from the previous year. The develop-
ment of a dense network that links
billions gave rise to aplethoraofsuc-
cessful sub-industries, one of which
is called crowdfunding.
The idea is simple. An entrepre-
neur, philanthropist, filmmaker,
musician or scientist comes up with
a brilliant idea. She wants to act on
the idea but holds in her pocket only
her lunch money, which of course,
she intends to keep. Crowdfunding
lets her post her idea on a funding
portal on the Internet and collect
funds from the general public.
This is contrary to the conven-
tional funding sources such as Busi-
ness Angel and Venture Capital,
where a large portion of the found-
ed entity's equities are exchanged
for small capital early on. It is also
different from credit card and bank
loans, where the borrower often
would have to personally guaran-
tee with her and other people's per-
sonal assets of the repayment of the
debt. In return for the funds, sup-
porters seek rewards such as signed
CDs, tickets to film premiers and
cool new gadgets.
I call crowdfunding the Finan-
cial Renaissance because it has the
potential to revolutionize the way
people finance their projects and
businesses in the future. For one,
crowdfunding already helped tens
of thousands of projects collect
funding. One example is Printrbot:

Your First 3D Printer. Project ini-
tiator Brook Drumm raised $10,000
in the first 11 hours of listing and
reached his goal of $25,000 in just
45 hours. Drumm doubled his goal
in just three days, and by the 30-day
closing period, his project raised
more than $830,000.
Crowdfunding gives people an
alternative to the conventional
funding sources. Startups without
large growth potential, billion-
dollar revenue projection or stellar
connections with venture capital-
ists rarely succeed in signing a term
sheet with the venture capitals.
Experts have seen financing terms
that are disadvantageous and even
detrimental to the growth and
development of early-stage busi-
nesses, such as impossible-to-reach
targets, restrictions on raising more
funds and mandatory exit at the end
of an investment horizon, meaning
that they pull the plug whether your
business is ready or not.
Certain businesses such as organic
coffee shops, boutique retailers and
mobile application developers don't
necessarily require the supervision
of business incubators, or firms that
provide both money and insights.
While insights are great, they also
come at great expenses to the busi-
ness owners, sometimes in the form
of someone calling your office every
day to check on you. Crowdfunding
provides a faster and simpler way for
people who simply need the money
to raise capital from the $60-bil-
lion friends-and-family fund market
through digital platforms.
While the crowdfunding industry
is still in the developmental stage,
signs of great momentum are emerg-
ing. Kickstarter, one of the largest
crowdfunding sites in the United
States, recently completed its first
three multi-million dollar fundrais-
ers, one of which raised an aston-
ishing total of $3.3 million dollars
(Double Fine Adventure - a video
game). Other crowdfunders like
IndieGoGo and Crowdcube are also
attractinglarge user bases.

The Jumpstart Our Business
Startups Act recently passed in both
the Senate and the House in a rare
bipartisan effort to induce entrepre-
neurial activities. Itlegalizes, among
other things, equity-based crowd-
funding in the U.S., or the option for
an entrepreneur to exchange shares
of her company for seed money.
David Welinsky, co-founder of
Minute Capital, a new crowdfunder
founded by students of the Universi-
ty, says his firm expects to launch an
equity-based feature on its upcom-
ing crowdfunding site after the act is
signed into law on Thursday.
Crowdfunding
gives start-ups
money they need.
"We are very excited that this law
is being passed," Welinsky said. "We
want to help entrepreneurs grow
their businesses."
Some people remain skeptical
about the act. Andrew Sorkin of
The New York Times says startups
might benefit at investors' expenses
if the companies' managers employ
accounting gimmicks in their finan-
cial statements. The Securities
Exchange Commission is expected
to come out with a series of disclo-
sure requirements for companies
and crowdfunders who wish to par-
ticipate in equity-based crowdfund-
ing, according to the JOBS Act.
Despite some shortcomings, I
think crowdfunding has a long but
optimistic road ahead. Crowdfund-
ing combines the power of the crowd
with the wit of American entrepre-
neurs in the hopes of spurring inno-
vation and organically creating jobs.
Who knows? IntO years, maybe any-
one can be a Mark Zuckerberg.
- Jason Pang Jao can be
reached at pangjao@umich.edu.

6
6

EDITORIAL BOARD MEMBERS:
Laura Argintar, Kaan Avdan, Eli Cahan, Ashley Griesshammer, Nirbhay Jain, Jesse Klein,
Patrick Maillet, Erika Mayer, Harsha Nahata, Harsha Panduranga, Timothy Rabb, Adrienne
Roberts, Vanessa Rychlinski, Sarah Skaluba, Seth Soderborg, Caroline Syms, Andrew Weiner
MAGGIE CHANG I
See you later, BlackBerry
I have always been someone who is abso- Messenger. Oh, how I loved BBM. There was
lutely attached to her phone-the girl who takes something about BBM that was irreplaceable.
it everywhere, the girl who uses it as her alarm Again, there was no good answer as to why I
clock and the girl who absolutely panics when loved BBM, but I just did.
it goes missing. Yes, that's me. So, I'm sure you Everyone made fun of me and said, "Come
can only imagine howI reacted when my phone on, switch to the iPhone already," butI was ada-
started restarting on its own. And, not only mantly against it. I was attached to this phone,
did it restart, but, before it would actually fin- and Research In Motion had somehow sucked
ish restarting, it would also restart again. The me in to staying a loyal customer.
process didn't allow me to access my phone for But the time came when my BlackBerry
days. And yet, people would sympathize with Curve died on me, and I knew that it had to go.
me as soon as I said just four words: I have a Yes, I ended up getting the iPhone. And yes, I
BlackBerry. absolutely love it.
Yes, indeed, I got my white BlackBerry Curve But there's still a part of me that misses my
more than a year ago, and, from the beginning, it BlackBerry. Seeing the reports on RIM's strug-
was flawed. For one, I still had the old trackball gles makes everyone else laugh, but it actually
- it got disgustingly black, and I would have to makes me sad. It's sad to see what was once a
replace it every few months. The battery would great company fall to its demise only because
die, and I would have to reset my phone, not by it couldn't keep up. Or maybe it was because it
powering off, but by actually taking the battery refused to keep up.
out of the slot and then inserting it again. That Now, I am with Apple and I am truly happy.
was what I had to deal with since October 2010. But to RIM, I honestly wish them the best. I
And yet, I still loved my BlackBerry. Every- don't wish them bankruptcy, and I don't wish
one asked me why, and I really had no good them failure. I'd love to see BlackBerry rise to
answer to that question, except for the fact that the top again.
it did what it needed to. I got my texts and my So this isn't goodbye, RIM. Instead, I'll just
e-mails, and I had Internet and unlimited data. say, "See you later, BlackBerry."
Yes, I had some major struggles with it, but it
still worked. And then there was BlackBerry Maggie Chang is a Business sophomore.
FOLLOW DAILY OPINION ON TWITTER
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join in the debate. Check out @michdailyoped to get updates on
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SEND LETTERS TO: TOTHEDAILY@MICHIGANDAILY.COM

Correlation and causation

0

ne month out of each semes-
ter, we GSIs must pay union
dues or a service represen-
tation fee to our
union, the Grad-
uate Employees'
Organization.
I had forgot-
ten that March
is one of those
months, and I
had an interest-
ing discussion MATTHEW
with myself as ZABKA
I looked at my
last paystub and
found that because of union dues, my
check was less than I had expected.
On one hand, I don't like being
forced to give the GEO money,
which it then uses to fight for
causes with which I don't agree.
On the other hand, if workers were
not forced to pay dues to the union
that represents them, there could
be an incentive for those workers to
free ride - meaning a worker could
expect union perks while not con-
tributing his or her fair share for
such benefits.
Unlike most discussions I have
with myself, this one is also taking
place across the country. Republi-
cans in several states such as Michi-
gan have mulled over introducing
right-to-work legislation that would
ban requiring union dues as a con-
dition of employment. While both
sides of the right-to-work issue have
reasonable claims, and debating
right-to-work laws is important for
society, politicians and the media
have, as usual, reduced a worthy
policy debate to bad rhetoric and an
even worse use of statistics.
The rhetoric includes some who
have mockingly branded right-
to-work laws as "right to work for
less" laws. They claim that the laws
weaken unions, which in turn lead to

reduced wages.
One user of such rhetoric, Prof.
David Schultz of the School of Busi-
ness at Hamline University in Min-
neapolis, Minn., has attempted to
justify this claim using statistics.
Before looking at Schultz's reason-
ing, one must understand what the
statistical term correlation means
and what it tells us.
Correlation is a number between
-1 and 1 that measures the strength
of an association between two sets of
data that are collected for the same
individuals. A correlation close to
-1 or 1 suggests a strong association,
while a correlation closer to 0 sug-
gests a weak association.
If a correlation is positive, one
expects points of the two sets of
data to increase together. For exam-
ple, if one looks at the heights and
weights of individuals, one would
expect a positive correlation, since
taller people tend to be heavier than
shorter people.
If a correlation is negative, one
expects points of one set of data
to decrease as points of the other
increase. One might expect a nega-
tive correlation between students'
time spent on Facebook and stu-
dents' GPAs. Time spent on Face-
book is time not spent studying, so
increased time on Facebook may be
associated with a lower GPA.
Back to right-to-work laws. Schul-
tz measured the correlation between
right-to-work laws in states and
median family income. He found a
weak, negative correlation of -0.40.
This means that on average, states
with right-to-work laws tend to
have lower median family incomes.
Schultz then concluded from his
analysis that, "right-to-work laws
depress family incomes."
His conclusion is wrong and
serves as a depressing example of
how statistics are misunderstood or

twisted to support a political agenda.
Correlation only measures an associ-
ation between two variables. It tells
us nothing about one variable caus-
ing the other.
The number of boating acci-
dents per week and the number of
ice cream cones sold per week are
positively correlated, but boating
accidents do not cause people to
buy ice cream, and ice cream prob-
ably doesn't cause many boating
accidents. Instead, both of these
things happen to increase together
in warmer weeks.
Unions don't
necessarily cause
lower incomes.
Just as weather is lurking behind
the association between ice cream
sales and boating accidents, sev-
eral other variables could be lurk-
ing behind the negative correlation
between right-to-work laws and
median income. Education levels,
proportion of stay-at-home parents,
geographical location and countless
other factors could be the real causes
of the lower mean median incomes
in right-to-work states.
The debate over right-to-work
laws is important for society to
have, but this debate should be
grounded in solid reasoning instead
of heated rhetoric and bad statis-
tics. I have my own opinions on
right-to-work, but I have no idea
if such laws cause lower median
incomes, and neither does Schultz.
- Matthew Zabka can be reached
at mzbka@umich.edu. Follow him
on Twitter at @MatthewZabka.

0
0

Rosenberg shouldn't write the
foreword to the Daily's book
TO THE DAILY:
As a former Daily sports editor, I am sur-
prised and disappointed to see that Michael
Rosenberg is writing the foreword to The Dai-
ly's book "Michigan Football, from the pages
of The Michigan Daily." Rosenberg proved
himself to be a biased reporter in the way he
covered Michigan Football from 2008 to 2010.
"Three and Out," a best-selling book authored
by University lecturer John U. Bacon, details
Rosenberg's biases toward the program. These

biases ultimately caused a scandal regarding
the team stretching too much (in the book,
when he is asked about this, he starts crying).
Rosenberg is, quite literally, the last person
that should be writing this. Someone less con-
troversial andmore deservingofthishonor,like
former Daily editor Mike Wallace or maybe a
star player like Charles Woodson, should have
written the foreword. Dhani Jones, a former
Daily staffer and star on a national title team,
also would have been perfect for a project like
this.
Raphael Goodstein
2002 University alum

ej