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Solution reasonable, premise wrong.
Neal McCluskey of the CATO Institute has an interesting article on the controversy surrounding Ward Churchill, who basically said that the people who died in the World Trade Center deserved what they got. His solution to "offensive" political speech by professors is reasonable: have state money follow students instead of going to a university as a block grant.
His premise, however, is not. McCluskey basically argues that because Churchill is a state employee, taxpayers are "subsidizing" his speech. Using that argument, taxpayers are subsidizing speech every time an employee of any unit of government (school, county, city, state, federal) speaks on an issue or policy matter.
This is a mistaken premise. Government employees are paid for the work they do while "on the clock". What they do on their own time is their own business, and the content of theor political speech should not be subject to any restrictions whatsoever. It is reasonable and proper for government employees to be restricted from using office resources (internet access, fax machines, etc.) for political purposes. It is not reasonable to suggest that a government employee is liable to taxpayers for speech made "off the clock" and with personal resources.
Conservatives rushing to demand the termination of Churchill should remember that the sword cuts both ways. In the fall of 2003, Indiana University Professor Eric Rasmusen faced not only calls for censorship of his personal web site for "intolerant" statements about homosexuality, but some radical opponents of liberty even suggested he be removed from the University.
The right to free speech does not cease to exist because you disagree with what is said, no matter how "offensive" that speech is. This is a lesson both the Left and Right need to learn.