Marketplace of Ideas

Marketplace of Ideas is moving

2008-08-21T23:59:00.003-05:00

You may recall when this blog began in April that I said this was the Marketplace of Ideas blog’s temporary location.

Well, this is the last Marketplace of Ideas blog item you’ll read here. Beginning today, Marketplace of Ideas can now be found at the Marketplace Web site, www.marketplacemagazine.com, and, for those who want to bookmark, http://www.marketplacemagazine.com/blogs/blog2.php.

Along with Marketplace of Ideas, Marketplace Today, our breaking news site, is also moving to www.marketplacemagazine.com, and, for those who want to bookmark, http://www.marketplacemagazine.com/blogs/blog1.php.

Go over there now, and you won’t miss a thing.

Analysis of the (Sun)day

2008-08-21T07:00:00.004-05:00

Sunday's New York Times Magazine will include this in-depth exploration of Barack Obama's economic beliefs. Writer David Leonhardt has "spent much of this year trying to get a handle on what is sometimes called Obamanomics and have come away thinking that Obama does have an economic ideology. It’s just not a completely familiar one. Depending on how you look at it, he is both more left-wing and more right-wing than many people realize."

The piece begins with what it calls the Democratic Party's, and Bill Clinton's, "two Bobs" — Robert Rubin, Clinton's secretary of the treasury, who focused on reducing the budget deficit, and Robert Rubin, Clinton's secretary of labor, who "argued that the government should invest in roads, bridges, worker training and the like to stimulate the economy and help the middle class." Put the two together, and what do you come up with?

Obama’s agenda starts not with raising taxes to reduce the deficit, as Clinton’s ended up doing, but with changing the tax code so that families making more than $250,000 a year pay more taxes and nearly everyone else pays less. That would begin to address inequality. Then there would be Reich-like investments in alternative energy, physical infrastructure and such, meant both to create middle-class jobs and to address long-term problems like global warming.

Nothing about that paragraph will assuage those who believe the budget deficit is the biggest problem we face. And if that seems like a disjointed set of proposals to you, there's more:

Labor unions, in particular, would prefer more trade barriers than many other Democrats. During the primaries Obama nodded, and at times pandered, in this direction. Since then, he has disavowed that rhetoric, to almost no one’s surprise. Yet his zig-zagging on the issue did highlight the biggest weak spot in his, and his party’s, economic agenda. He still hasn’t quite figured out how to sell it. For all his skills as a storyteller and a speaker, he has not settled on a compelling message about how to put the economy on the right path.
The lack of such a message has contributed to several of his worst moments over the last year. Most recently, the campaign has come out with a series of small-bore, populist energy plans — a windfall-profits tax on oil companies, a crackdown on speculators, a partial opening of the strategic oil reserve — that seem more political than economic. The most glaring misstep on this score was his comment this spring about bitter rural voters clinging to guns and religion. It was, in effect, an admission that his own message about the economy hadn’t yet broken through.

Leonhardt claims that Obama's economic thinking has been influenced by the University of Chicago school of economic thinking, but there's not much evidence that Obama actually believes in free markets (he is, however, a veteran of the Chicago school of corrupt politics); he only seems more market-friendly compared with, for instance, his primary opponent Hillary Clinton:

“The market is the best mechanism ever invented for efficiently allocating resources to maximize production,” Obama told me. “And I also think that there is a connection between the freedom of the marketplace and freedom more generally.” But, he continued, “there are certain things the market doesn’t automatically do.” In other words, free-market policy isn’t likely to dominate his agenda; his project would be fixing the market.

No New Democrat there. And, by the way, Barack, markets generally resist getting "fixed" to meet political priorities; his "fixes," whatever they are (for instance, his desire to reduce the gap between "rich" and poor by sticking higher taxes on the right) are likely to lead to Obama's lesson number one in the Law of Unintended Consequences.

There's also another spot where Leonhardt is just plain wrong:

The Tax Policy Center, a research group run by the Brookings Institution and the Urban Institute, has done the most detailed analysis of the Obama and McCain tax plans, and it has published a series of fascinating tables. For the bottom 80 percent of the population — those households making $118,000 or less — McCain’s various tax cuts would mean a net savings of about $200 a year on average. Obama’s proposals would bring $900 a year in savings. So for most people, Obama is the tax cutter in this campaign. ...
All told, Obama would not only cut taxes for most people more than McCain would. He would cut them more than Bill Clinton did and more than Hillary Clinton proposed doing. These tax cuts are really the essence of his market-oriented redistributionist philosophy (though he made it clear that he doesn’t like the word “redistributionist”). They are an attempt to address the middle-class squeeze by giving people a chunk of money to spend as they see fit.

What's wrong with this analysis? How about this: Poor people do not own businesses, poor people do not employ other people, and poor people do not drive the economy. Business owners, most of whom live in households that bring in more than $118,000 a year because they are successful — do. And business owners will get a big fat tax increase out of Obamanomics, not because it will bring in more tax revenue (less than they think, of course), but because Obama and his minions believe in "fairness":

He would then pay for the cuts, at least in part, by raising taxes on the affluent to a point where they would eventually be slightly higher than they were under Clinton. For these upper-income families, the Tax Policy Center’s comparisons with McCain are even starker. McCain, by continuing the basic thrust of Bush’s tax policies and adding a few new wrinkles, would cut taxes for the top 0.1 percent of earners — those making an average of $9.1 million — by another $190,000 a year, on top of the Bush reductions. Obama would raise taxes on this top 0.1 percent by an average of $800,000 a year.

I don't believe that Obama actually will cut taxes on the non-"rich." You may recall that Clinton proposed a middle-class tax cut during his first campaign, only to throw it away when he let Rubin talk him into increasing everyone's taxes instead. The result was that taxes reached a record 20 percent of Gross Domestic Product by 2000, helping push the economy into the 2001 recession, even though no one noticed it at the time. Since most Democrats seem to believe that government can spend your money better than you can, Obama will have to convince congressional Democrats to do something they seem constitutionally incapable of doing.

There's a bigger issue here, and one that Leonhardt doesn't address. What exactly can you believe in what Obama says? His well publicized flip-flops on trade, capital gains taxes and other, smaller issues make you wonder what exactly he does believe in, other than getting elected. And this, remember, is someone who, as Leonhardt's otherwise fawning piece admits, has "never run any government entity — no state, no city, not even a municipal agency — and he may not prove to be good at doing so."

The fact that Obama's economic mishmash may sound good, and probably is in fact better than other Democrats of the tax-and-regulate-everything-that-moves school of politics, is not a compelling reason to vote for him.

18 reasons

2008-08-20T07:00:00.004-05:00

At last, reality has made a tardy appearance into the debate about the role of drinking in our society.

A group of college presidents has signed on to the Amethyst Initiative, a public statement that “the 21-year-old drinking age is not working, and, specifically, that it has created a culture of dangerous binge drinking on their campuses. ”

Why? As the presidents’ statement notes, “Alcohol education that mandates abstinence as the only legal option has not resulted in significant constructive behavioral change among our students. Adults under 21 are deemed capable of voting, signing contracts, serving on juries and enlisting in the military, but are told they are not mature enough to have a beer. By choosing to use fake IDs, students make ethical compromises that erode respect for the law.”

The presidents call upon elected officials to “support an informed and dispassionate public debate over the effects of the 21-year-old drinking age,” including “whether the 10% highway fund ‘incentive’ encourages or inhibits that debate,” while seeking “new ideas about the best ways to prepare young adults to make responsible decisions about alcohol.”

The 21-year-old drinking age requirement — tied to federal government blackmail that takes 10 percent of highway funds away from states that don’t have a 21-year-old drinking age — is ineffective in reducing underage drinking, in colleges and in the places where it was supposed to inhibit underage drinking, high schools. When college freshmen arrive in their dorm, either they have no experience with alcohol if they’ve been following the law, or they’re used to breaking the law. Away from home for an extended period for the first time in their adult lives, in most cases, with no parents telling them not to drink, they start drinking, sometimes to excess and sometimes with tragic results.

Advocates of the 21-year-old drinking age claim that 1,000 lives have been saved each year by the higher drinking age, according to the U.S. Department of Transportation. The Amethyst Initiative quotes Choose Responsibility as noting that more than 1,000 18- to 24-year-olds “die each year of alcohol-related causes other than traffic accidents," and that the 21-year-old drinking age has not prevented deaths, but delayed them — “every claim of an 18-, 19-, or 20-year-old life ‘saved’ as a result of Legal Age 21 is offset by the number of 21-, 22-, or 23-year-old lives lost.” If that is true, then the 21-year-old drinking age is an abysmal failure for that reason alone. Choose Responsibility also points out that “Four factors have combined powerfully (and dramatically more than Legal Age 21) to the decline of driving fatalities associated with alcohol: safer cars, higher awareness by drivers of all ages, greater utilization of a ‘designated driver,’ and more vigorous law enforcement.”

What’s more, as Choose Responsibility notes, “Legal Age 21 has created an environment of excess consumption and goal-oriented drinking. While fewer individuals aged 18–20 are drinking, those who choose to drink are doing so at dangerous and alarming rates. … Brain development is complete around age 25; therefore, 21 is not a magic number. What puts individuals at greater cognitive risk is binge drinking, whose rates have only climbed.”

To no one’s surprise, suggesting that the drinking age may be too high is tantamount to mandating drinking until you’re comatose to such anti-alcohol types as Mothers Against Drunk Driving. The PR NewsWire headline for MADD’s news release: “Some University Presidents Shirk Responsibility to Protect Students from Dangers of Underage Drinking.”

“It’s very clear the 21-year-old drinking age will not be enforced at those campuses,” said Laura Dean-Mooney, national president of MADD, which, according to the Associated Press, is “even urging parents to think carefully about the safety of colleges whose presidents have signed on.”

That’s an interesting statement (not to mention a neat bit of character assassination), given that every one of the 157 college-age people, 18 to 23, who drank themselves to death from 1999 through 2005, according to an Associated Press study, died in a state with a drinking age of 21. Actually, it’s very clear the 21-year-old drinking age is not enforceable at any campus except where there’s almost as many security personnel as students. So much for the “informed and dispassionate debate.”

Then again, there is no such thing as an “informed and dispassionate debate” when it comes to the issue of alcohol generally and drunk driving specifically. (See the aforementioned PR Newswire headline.) We as a society lose all proportion whenever the subject of drunk driving comes up, as the show of police force called “Drunk Driving. Over the Limit. Under Arrest” under way until Sept. 1 with $50 million of your tax dollars, demonstrates. (On Sunday I noticed within a one-mile stretch of U.S. 18–151 that goes through a village of 1,100 people west of Madison, one Wisconsin State Patrol squad car, one county sheriff car, and one village police car. None appeared to be doing anything other than sitting on the side of the road trolling for potential drunk drivers, around 6 p.m. On Tuesday, two state troopers were similarly trolling for drunk drivers on Calumet Street in Appleton at 3 p.m.)

Driving under the influence of alcohol means your senses are partially impaired from your ability to give full attention to driving. That also occurs with drivers on some kinds of medication, drivers who notice their car interior is too warm or too cold, cellphones, car audio systems, car navigation systems, cars that flash instrument panel warning lights, passengers, other cars, and drivers who are thinking about anything else besides driving. Some impairments are more serious than others, obviously, but to assert that, as a Colorado MADD chapter president, Penny Wagner, said, “Once you’ve consumed your first drink, you’ve lost that ability to make a sound judgment,” calls into serious question the credibility of the organization sponsoring that point of view. (Then again, MADD supports an absolute sobriety standard for all drivers.)

How serious is drunk driving? The National Highway Traffic Safety Administration reports that the number of drinking drivers involved in fatal crashes totals 0.127 percent of all drivers. Note the word “drinking,” not “drunk,” because the NHTSA counts every driver with any blood alcohol content in that percentage. (If you drink one beer and then are killed in a car crash in which the other driver was sober, then you died in an alcohol-related crash, according to the federal and state DOTs.) That is how the state Department of Transportation can propagandize that “alcohol-related crashes in Wisconsin killed 337 people and injured 5,552” without saying how many of the dead and injured were in fact legally or factually intoxicated. (And about that last point, “legally or factually intoxicated,” few people notice that a legal intoxication level creates a crime based on a state of being, rather than a state of doing, or, put another way, a state of mind instead of an action — in this case, bad driving.)

Like other laws created to make politicians look good or constituents feel good without producing actual results, the 21-year-old drinking age serves to encourage disrespect for the law. I’m still waiting for someone to give an actual logical rationale countering the presidents’ observation about how people are legally considered adults at 18 except when it comes to alcohol use. (Recall the words of Benjamin Franklin: “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.”) It is also another example of how laws can serve to deter personal responsibility. The 21-year-old drinking age is also an example of power triumphing over reason — why can’t you drink before you’re 21? Because we said so!

MADD and its allies will not tell you this, but the vast majority of people who used alcohol before their state said they legally could are not drunks and in fact use alcohol responsibly after they reach the legal drinking age. If that were not the case, the drunk driving and drunk-driving death rates would be an order of magnitude higher than they are. (Then again, MADD is well known for playing fast and loose with the facts, liberally using junk science, or generating all kinds of inaccuracies.)

To date, in Wisconsin only the president of Ripon College has signed on to the initiative. Northeast Wisconsin’s other college presidents and chancellors should too. So should the proponents of the 21-year-old drinking age agree to engage in “an informed and dispassionate public debate over the effects of the 21-year-old drinking age.” Don’t hold your breath.

Today's sign of your advancing age

2008-08-19T09:00:00.001-05:00

Beloit College released its annual Mindset List today, reminding all of us who have already graduated from college about the lives of today's college freshmen:

The class of 2012 has grown up in an era where computers and rapid communication are the norm, and colleges no longer trumpet the fact that residence halls are “wired” and equipped with the latest hardware. These students will hardly recognize the availability of telephones in their rooms since they have seldom utilized landlines during their adolescence. They will continue to live on their cell phones and communicate via texting. Roommates, few of whom have ever shared a bedroom, have already checked out each other on Facebook where they have shared their most personal thoughts with the whole world.

It is a multicultural, politically correct and “green” generation that has hardly noticed the threats to their privacy and has never feared the Russians and the Warsaw Pact.

Some of the more amusing ones (well, you may find them amusing; then again, you may not, particularly the last one):

Gas stations have never fixed flats, but most serve cappuccino.
As a precursor to “whatever,” they have recognized that some people “just don’t get it.”
WWW has never stood for World Wide Wrestling.
IBM has never made typewriters.
Roseanne Barr has never been invited to sing the National Anthem again.
Caller ID has always been available on phones.
Soft drink refills have always been free.
They have never known life without Seinfeld references from a show about “nothing.”
The Green Bay Packers (almost) always had the same starting quarterback.

Analysis of the Day

2008-08-19T08:00:00.003-05:00

The Milwaukee Journal Sentinel's Patrick McIlhearn notes that his car's driver has never gone on strike, unlike Racine bus drivers and (back in the late '70s, I remember) Madison bus drivers. Nor, I would add, do they race through the first half of their route and then sit for several minutes, making some passengers miss their bus and others late, as Madison drivers have been known to do.

Gas prices and Madison

2008-08-19T07:00:00.003-05:00

Democrats such as U.S. Rep. Steve Kagen (D–Appleton) must be breathing sighs of relief now that gas prices have slipped around 40 cents a gallon from their record highs of earlier this year. (Must be that nasty antitrust lawsuit against OPEC.)

Which does not mean that gas prices are no longer an issue for voters. That is what Randy Melchert, a Republican candidate in the 24th Assembly District in southeast Wisconsin, believes.

Melchert has a three-pronged way to reduce gas prices in the Milwaukee metropolitan area by 10 percent, and to reduce gas prices in the rest of Wisconsin as well:

Eliminate the state’s minimum markup law.
Reduce the state gas tax to the national average.
Eliminate the federal mandate requiring use of reformulated gas in the Milwaukee area.

Melchert’s Web site, themelchertplan.com, has an interactive calculator that shows how much money his would-be constituents would save if his plan became law. Northeast Wisconsin residents, who are not subject to the reformulated gas mandate (yet), would not save the estimated 14 cents per gallon cost of RFG, but they would still save the 24 to 36 cents per gallon the minimum markup law requires and the 4 cents per gallon above the national average at which the state gas tax is set.

The gas tax is no longer indexed to inflation, so at least it's not automatically increasing every spring. Then again, the transportation fund is decreasing thanks to Gov. James Doyle's repeated raiding of the fund to balance the state budget. The transportation fund seems to be, in the words of another observer, the payday loan store of state government.

As for Doyle’s position on the minimum markup law, he seems to emulate the death penalty dance of former Gov. Tommy Thompson. Thompson said publicly that he would sign a bill reestablishing the death penalty if it reached his desk. However, a death penalty bill never reached his desk because, despite the repeated efforts of state Sen. Alan Lasee (R–Rockland), Republican legislative leaders prevented it from coming to a vote since they didn’t support the death penalty.

Similarly, Doyle has said publicly that he would sign a bill ending the minimum markup law if it reached his desk. No such bill has reached his desk, in part due to strange votes of people like Sen. Glenn Grothman (R–West Bend), who in 2005 voted in committee against ending the law over concerns that gas stations wouldn’t be able to cover the cost of credit card transactions. It’s not clear what part of the state Constitution stipulates that legislators’ duties include monitoring gas station credit card transaction fees.

For that matter, setting (or effectively setting) gas prices is not the role of government, period. Many Republicans wrongly favor the minimum markup law on the premise that eliminating it would eliminate smaller gas stations in favor of the behemoths of Big Oil. As stated here before, evidence of predatory gas pricing is nonexistent, and as it is, consumers don't usually know or ever care about the source of their gas (with the exception of Citgo, owned by Venezuela and its vile "president," Hugo Chavez).

On the other side of the aisle, do not assume that the drop in gas prices is a success of the Democratic Party. It may well be that gas prices aren't going to drop to the levels (about $2.30 a gallon) that preceded Democratic control of Congress. It is a 100 percent guarantee that, next spring at the latest, they will increase with a President Obama and Democratic-controlled Congress, since Obama and most Democrats believe that oil companies should be saddled with windfall profits taxes and, anyway, we need to be weaned from our cars and "cheap" energy. (I'll believe that the next time I see any Democratic member of Congress on a Washington, D.C., bus.)

Then again, perhaps there's less urgency about gas prices in Madison because ... gas prices are (as of today) lower in Madison than in other metro areas of Wisconsin.

Prince Charles: “Let them eat cake”

2008-08-18T07:00:00.004-05:00

Why, one might ask, did our Founding Fathers fight for independence from Great Britain?

One reason is so that we would not be the subjects of twits like His Royal Highness Charles Philip Arthur George, Prince of Wales, Earl of Chester, Duke of Cornwall, Duke of Rothesay, Earl of Carrick, Baron of Renfrew, Lord of the Isles, Prince and Great Steward of Scotland, et cetera, et cetera, et cetera. As he waits … and waits … and waits to succeed Queen Elizabeth atop the United Kingdom, he feels free to enlighten us commoners about the dangers of genetically modified foods, as reported in the London Daily Telegraph:

In his most outspoken intervention on the issue of GM food, the Prince said that multi-national companies were conducting an experiment with nature which had gone “seriously wrong.”

The Prince, in an exclusive interview with the Daily Telegraph, also expressed the fear that food would run out because of the damage being wreaked on the earth’s soil by scientists’ research.

He accused firms of conducting a “gigantic experiment I think with nature and the whole of humanity which has gone seriously wrong.

“Why else are we facing all these challenges, climate change and everything?”
Relying on “gigantic corporations” for food, he said, would result in “absolute disaster.
“That would be the absolute destruction of everything … and the classic way of ensuring there is no food in the future,” he said.
“What we should be talking about is food security not food production — that is what matters and that is what people will not understand.
“And if they think its somehow going to work because they are going to have one form of clever genetic engineering after another then again count me out, because that will be guaranteed to cause the biggest disaster environmentally of all time.” …
In the interview the Prince, who has an organic farm on his Highgrove estate, held out the hope of the British agricultural system encouraging more and more family run co-operative farms.
When challenged over whether he was trying to turn back the clock, he said: “I think not. I’m terribly sorry. It’s not going backwards. It is actually recognising that we are with nature, not against it. We have gone working against nature for too long.”

Let’s see here. Our planet, whose population is growing (except in Europe), has starving people. There is also an effort to replace oil imported from the Middle East with ethanol from corn or other plant sources. Genetically modified plants have never been proven to harm nature or people. (Our sample size: 8.5 million farmers on more than 100 million acres of cropland in 21 countries, as of 2006.) In fact their genetic modifications can eliminate or reduce the need for pesticides and herbicides. Modifications can increase cold and drought resistance. Modifications can also increase the nutritional value of crops.

I’d be curious about what Charles considers to be “working against nature.” Irrigation? Fertilizer? Insecticides and herbicides? Hybrid crops? Use of tractors and combines? Metal silos? Lights? Electricity?

It’s not clear if Charles is really as ignorant or as insensitive to the problems of the world outside Clarence House as this makes him appear, or if he’s been listening to Jeremy Rifkin too much. (Bonnie Prince Charlie says we have, as of now, 15 months to reverse global climate change, assuming global warming is actually occurring.) It’s pathetic to see one of the world’s (alleged) leaders succumbing to superstition over science, similar to opponents of nuclear power. It’s also pathetic to see the next leader of the country and kingdom that produced Adam Smith, John Stuart Mill, William Wilberforce, Winston Churchill and Margaret Thatcher become vaguely socialist. That, or he’s channeling his inner Marie Antoinette.

Fun at the Weather Service?

2008-08-17T21:42:00.002-05:00

A regular reader caught this on the National Weather Service's forecast page for Rosendale Saturday night:

Overnight: Cloudy.

Sunday: Cloudy.

Sunday Night: Cloudy.

Monday: Cloudy.

Monday Night: Cloudy.

Tuesday: Partly sunny. Strong and damaging winds, with a east wind between 70 and 80 mph.

Tuesday Night: Cloudy. Strong and damaging winds, with a east wind 90 to 95 mph increasing to between 110 and 115 mph.

Wednesday: Cloudy. Strong and damaging winds, with a east wind 115 to 120 mph increasing to between 155 and 160 mph.

Wednesday Night: Cloudy. Strong and damaging winds.

Thursday: Cloudy.

Thursday Night: Cloudy.

Friday: Cloudy.

Skål

2008-08-15T07:00:00.011-05:00

I’ve been the editor of Marketplace on and off since the end of January 1994. If I had to point at one thing that points at quality of life in the preceding 14 years, it would be …

… the growth of breweries and wineries in Northeast Wisconsin.

The former of those two facts makes sense, given our heritage as a brewing state. The latter is less self-evident, since no one thinks of Wisconsin as having a good grape-growing climate. Some snobs claim that apple or cherry wines aren't really wines at all. But one of the great facets of free enterprise is the opportunity to make your own choice of what food and drink to drink. (At least for now, though some wish to restrict our food and drink choices.)

(This has nothing to do with the latest Department of Transportation anti-drunk driving campaign, “Drunk Driving. Over the Limit. Under Arrest” campaign that starts today and runs through Sept. 1. Anyone with an ounce of responsibility should know that impaired driving — to the point where you can’t safely operate a vehicle, not based on a legislatively determined number — is indefensible. It might have more to do with the Wall Street Journal’s weekend “Tastings” and “How’s Your Drink?” columns, the only problem with which is that if you followed their purchase advice, half of your house would be your liquor cabinet and your wine cellar.)

Wisconsin’s historically predominant ethnic group is German. Our German ancestors did unfortunately bring large government and high taxes with them, but they also brought beer. (An interesting tradeoff.) Other Europeans brought wine with them, since they came from countries with poor-quality drinking water. Within 50 years of a wave of mid-19th-century German immigration, brewing had become the fifth largest industry in the U.S., according to Maureen Ogle, author of Ambitious Brew: The Story of American Beer.

Beer and wine have been more durable than government, having survived “progressive” and anti-alcohol efforts to wipe it out during Prohibition. (One anti-alcohol type wrapped temperance and World War I anti-German sentiment by proclaiming, "The worst of all our German enemies are Pabst, Schlitz, Blatz and Miller.") Beer and wine are also more durable than newspapers, specifically the Gannett efforts to shame all of us into stopping drinking. (And, yes, that is exactly the goal of the Gannett series, any denials of theirs notwithstanding; had they wanted to focus exclusively on drunk driving, they certainly could have.)

One of the more interesting classes I took at the University of Wisconsin was a class in UW’s Botany department, “Plants and Man.” Besides being one of the first users of multimedia presentations (he used two slide projectors during lectures), the professor, Tim Allen, talked about, of all things, brewing and winemaking:

“You learn about biological processes, you learn about infections, you learn about being careful, being clean—all things that are crucial to science,” says Allen. “As well as learning a useful skill. Brewing is legal and a wholesome activity.”

One thing he said that stuck in my mind during the adult-beverage lectures was to look for quality over quantity — that two bottles of a really good beer are preferable to a six-pack of lesser beer. (That’s also the reason I don’t drink light beer.) I meet no one’s definition of a beer or wine snob, but I avoid the more common beer labels (i.e. Miller Genuine Draft over Miller Lite, and Michelob over anything with “Bud” in its name), particularly Old Style beer (the most common contents of the college party quarter-barrels I attended), of which I drank enough to resolve to never drink it again after graduation. (I also vastly prefer bottles to cans.)

Old Style, of course, was brewed by the late G. Heileman Brewing Co. of La Crosse, which also brewed my first favorite beer, Special Export. (Both Old Style and Special Export are now brewed by Miller for Pabst, the labels’ owner. Pabst also owns Blatz, Colt 45 Malt Liquor, Lone Star, Old Milwaukee, Olympia, Pearl, Rainier, Schaefer, Schlitz and Stroh’s.) Special Export was the beer of choice at home when I reached legal drinking age, so I drank it until the formula changed sometime around 1990.

(Interesting side fact: Several beer Web sites actually “card” users — if you’re not 21, you can’t get into their Web site, I suppose because of the national 21-year-old drinking age. At 18, you can vote, marry, sign legally binding contracts and die for your country, but until you’re 21 you can neither drink nor access beer Web sites.)

I come from a long line of brandy drinkers, which shouldn’t be a surprise in Wisconsin. My grandfather drank brandy and cola. My father drinks brandy and seltzer. My Polish Minnesota relatives were shot-and-a-beer types, although the shot was brandy and not whiskey. I drink the official mixed drink of Wisconsin, the brandy old fashioned made with sweet vermouth. (Except during my in-laws’ large Christmas celebration, where the order of the day is their brandy slush.) The black sheep of the family are my aunt and uncle, who make the world’s greatest Bloody Marys.

My alcohol choices are influenced heavily by my sweet tooth. (Call me a philistine, but my wine preferences lean toward sweet whites.) As I’m finishing this column, for instance, I’m drinking a Leinenkugel Summer Shandy, beer with a lemonade taste. (I’ll pause to wait for the snickering among some of you to stop.) I also like wheat beers, red beers, and even dark beers when I’m feeling, well, brilliant. I was going to replace the Summer Shandy with Leinie’s Apple Spice this fall, but Leinie decided to discontinue Apple Spice and replace it with Fireside Nut Brown. (We’ll see.) I have yet to delve into the world of home brewing, because I have enough to do in my life as it is. (More power to those who brew at home.)

There is great irony in the purchase of Anheuser–Busch, brewers of Budweiser, by InBev of Belgium. Some argue that Budweiser helped wipe out dozens of regional brands; others argue that Budweiser helped wipe out dozens of regional brands that were almost indistinguishable from Budweiser. Ogle (who has a beer blog) points out that, after Prohibition, per capita beer consumption didn't reach pre-Prohibition levels until the mid-1970s. Edward McClelland wrote on Salon.com that, while in 1960 this country had 175 traditional (not micro) breweries, within 45 years (45 years of beer on the wall?) there were just 21 breweries.

Anyone 10 years or older than I am can regale you with interesting stories as the answer to this question: What is the worst beer you’ve ever had? McClelland points out that Anheuser–Busch’s attaching itself to television and sports took it from number four to number one among U.S. breweries, wiping out smaller competition in the process. An honest appraisal, though, might make one think that the survivors were those who didn’t just have more financial, distribution or marketing horsepower, but made a better, or at least more consistent, product than many smaller labels. (You walk into any McDonald’s restaurant in the U.S., and you will get the same Quarter Pounder as at the next McDonald’s, or a McDonald’s 1,000 miles away.) A good tipoff is when a beer is known not for its quality, but its lack thereof.

The trend in the reduction of traditional breweries has been countered by the rise of the microbrewery, or “craft brewery,” including, in Northeast Wisconsin, Fratellos and Fox River Brewing Co., Hinterland, Stone Cellar, Titletown and others. (McClelland notes that the U.S. had eight microbreweries in 1980; 25 years later, the number had jumped to more than 1,300.) The parallel trend is the rise of the small winery, including, in Northeast Wisconsin, Captain’s Walk, Door Peninsula, Kerrigan Brothers, LedgeStone, Orchard Country, Parallel 44, Red Oak, Simon Creek, Stone’s Throw, Trout Springs, von Stiehl, Woodland Trail and others. (The winery list, incidentally, has doubled since I did a story about Northeast Wisconsin’s wineries in June 2001.)

At this point, those readers who don’t drink (and you are perfectly within your rights to abstain) might look at this as an exercise justifying drinking, as if those of us who enjoy the taste of alcoholic beverages or enjoy the stress-relieving effects of adult beverages are less moral or less pure of heart. That belies the reality that stress-relieving activities, of which drinking is one, have existed as long as stress has existed.

Washington Post columnist George Will, not a writer noted for humor, wrote perhaps the second funniest thing he has ever written (the first was his suggestion that football combines the two worst features of American culture — violence and committee meetings) when commenting on Investors Business Daily’s report on InBev’s purchase of Anheuser–Busch:

The story asserted: “The [alcoholic beverage] industry’s continued growth, however slight, has been a surprise to those who figured that when the economy turned south, consumers would cut back on nonessential items like beer.”
“Non what”? Do not try to peddle that proposition in the bleachers or at the beaches in July. It is closer to the truth to say: No beer, no civilization.

That’s not columnist hyperbole. Will refers to Steven Johnson’s The Ghost Map: The Story of London's Most Terrifying Epidemic — and How It Changed Science, Cities, and the Modern World, about a cholera epidemic traced to the drinking water in a particular London neighborhood:

“The search for unpolluted drinking water is as old as civilization itself. As soon as there were mass human settlements, waterborne diseases like dysentery became a crucial population bottleneck. For much of human history, the solution to this chronic public-health issue was not purifying the water supply. The solution was to drink alcohol.”

Often the most pure fluid available was alcohol — in beer and, later, wine — which has antibacterial properties. Sure, alcohol has its hazards, but as Johnson breezily observes, “Dying of cirrhosis of the liver in your forties was better than dying of dysentery in your twenties.” Besides, alcohol, although it is a poison, and an addictive one, became, especially in beer, a driver of a species-strengthening selection process.

Johnson notes that historians interested in genetics believe that the roughly simultaneous emergence of urban living and the manufacturing of alcohol set the stage for a survival-of-the-fittest sorting-out among the people who abandoned the hunter–gatherer lifestyle and, literally and figuratively speaking, went to town.

To avoid dangerous water, people had to drink large quantities of, say, beer. But to digest that beer, individuals needed a genetic advantage that not everyone had — what Johnson describes as the body's ability to respond to the intake of alcohol by increasing the production of particular enzymes called alcohol dehydrogenases. This ability is controlled by certain genes on chromosome four in human DNA, genes not evenly distributed to everyone. Those who lacked this trait could not, as the saying goes, “hold their liquor.” So, many died early and childless, either of alcohol’s toxicity or from waterborne diseases.

The gene pools of human settlements became progressively dominated by the survivors — by those genetically disposed to, well, drink beer. “Most of the world’s population today,” Johnson writes, “is made up of descendants of those early beer drinkers, and we have largely inherited their genetic tolerance for alcohol.”

So the next time you order beer, just tell your companions that nature wants you to drink beer. (I drink gin — always Tanqueray — and tonics in the summer due to my fear of scurvy and malaria. A bartender once told me that Tanqueray doesn’t cause hangovers, and so far, he’s been right.) Or repeat this quote attributed to John Ciardi: “Fermentation and civilization are inseparable.”

There is something viscerally satisfying about a good wine accompanying a good meal, or a bottle of beer in the company of friends. Taverns, after all, were where much of the business of the beginnings of this nation were conducted. And if you’re a parent, it is absolutely essential that your children see you and your spouse enjoying adult beverages responsibly.

Benjamin Franklin has been quoted as approving of both beer and wine as “proof that God loves us and wants us to be happy.” The actual quote is: “We hear of the conversion of water into wine at the marriage in Cana as a miracle. But this conversion is, through the goodness of God, made every day before our eyes. Behold the rain which descends from heaven upon our vineyards; there it enters the roots of the vines, to be changed into wine; a constant proof that God loves us, and loves to see us happy.” Then again, he certainly enjoyed ale from time to time.

Another Founding Father, Thomas Jefferson, pointed out, “Beer, if drank in moderation, softens the temper, cheers the spirit, and promotes health.”

Cheers. (Or perhaps, for our German ancestors, “prost.”)

The correct corporate tax rate

2008-08-14T07:00:00.007-05:00

National Democrats are in high dudgeon over a General Accounting Office report that two-thirds of U.S. corporations do not pay income taxes — that is, do not have income tax liability at the end of their fiscal year.

“It’s shameful that so many corporations make big profits and pay nothing to support our country,” harrumphed U.S. Sen. Byron Dorgan (D–North Dakota), who requested the GAO report with U.S. Sen. Carl Levin (D–Michigan), who you might think has better things to worry about, such as the deteriorating state of the state he represents. “The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes. We need to plug these tax loopholes and put these corporations back on the tax rolls.”

Well, there’s (at least) one problem with Dorgan’s spleen-venting. As page 13 of the report points out:

… The overwhelming majority, about 79 to 80 percent of both large [foreign-controlled corporations] and [U.S.-controlled corporations] that reported zero tax liability in 2005, established it on line 28 where they reported zero taxable income before net operating losses. This means that their reported current-year deductions more than offset the positive current-year total income reported on line 11.

In other words, in order to pay income tax, corporations have to have net income, as defined by federal tax law. Dorgan therefore is venting about the wrong thing — instead of venting about companies paying no taxes, perhaps he should be bold enough to support, instead of a corporate income tax, a corporate gross receipts tax, where taxes are based on revenue, not income (revenue minus expenses). Dorgan then will have to explain why it will be a good thing when corporations reduce employment and R&D spending, dividends to shareholders (which, by the way, comprise half of Americans), and such niceties as donations to nonprofits once they have tax liability they don’t currently have.

The dudgeon fades further when you read this from the Associated Press:

An outside tax expert, Chris Edwards of the libertarian Cato Institute in Washington, said increasing numbers of limited liability corporations and so-called “S” corporations pay taxes under individual tax codes.
“Half of all business income in the United States now ends up going through the individual tax code,” Edwards said.

The fact is that, contrary to what Dorgan thinks, no business escapes from taxes. Every employee, including those allegedly excessively paid CEOs, pays income taxes, Social Security taxes, capital gains taxes if they own stock, state and local sales taxes, and so on. Corporations also pay taxes covering their share of the Social Security taxes of their employees, unemployment and Worker Compensation taxes, property taxes on their properties and sales taxes (to excess, in many cases) on business-related items that aren’t exempt from the sales tax. The only way a corporation can escape taxes is to have no employees, facilities, equipment or purchases.

I’m going to repeat myself and point out that businesses should not have to pay taxes other than what funds strictly property-based services. In addition to the savings for companies in the cost of complying with our tax system, the savings from not paying corporate income or personal property taxes could go in one or more of three directions — more investment in the company, more pay for employees, or more dividends for shareholders. Any combination of those three is preferable to giving state government and our elected officials, including Dorgan, more money to waste. The benefits any business provides the areas they’re in, beginning with providing jobs, far exceeds whatever taxes a company pays. And every dollar a business is taxed is one more dollar in the price of a product, one less dollar that can be spent on the company (including employee pay), or one less dollar that can be passed on to shareholders.

I’ve also said this before, but it too bears repeating: In addition to ferreting out hidden taxes — since, as we all know, businesses don’t pay taxes, they pass them on to customers or their shareholders — ending corporate taxes other than strictly property-based services would have the additional effect of removing a lot of money and lobbying from our political system. If you have no corporate taxes, you have no corporate tax breaks, you have no lobbying for tax breaks, and you have no contributions to political candidates business hopes will favor tax breaks. (Then again, that’s probably a big reason why Dorgan and Levin wouldn’t favor ending corporate taxes.)

What’s the correct corporate tax rate? Zero.

Be on the lookout …

2008-08-13T14:35:00.001-05:00

From the National Weather Service in Sullivan:

...FUNNEL CLOUDS POSSIBLE TODAY...

FUNNEL CLOUDS HAVE BEEN REPORTED TODAY NEAR WATERTOWN AND NEAR WESTFIELD IN MARQUETTE COUNTY. THE FUNNELS CLOUDS OCCURRED WITH SCATTERED SHOWERS AND ISOLATED THUNDERSTORMS THAT ARE MOVING ACROSS SOUTHERN WISCONSIN. NO TORNADOES HAVE BEEN REPORTED.

THE MOIST ATMOSPHERIC CONDITIONS TODAY AND RELATIVELY COLD AIR ALOFT ARE SUPPORTIVE OF BRIEF FUNNEL CLOUDS. THE THREAT OF SEVERE WEATHER IS VERY LOW. IF ANY FUNNEL CLOUDS TOUCHDOWN...THEY ARE EXPECTED TO BE VERY BRIEF AND WEAK WITH VERY LIMITED THREAT TO THE PUBLIC. SCATTERED SHOWERS AND ISOLATED THUNDERSTORMS ARE EXPECTED TO CONTINUE THROUGH THE AFTERNOON WITH FUNNEL CLOUDS POSSIBLE.

From the National Weather Service in Ashwaubenon:

...FUNNEL CLOUDS POSSIBLE TODAY...

AN UPPER LEVEL DISTURBANCE WILL PRODUCE WEATHER CONDITIONS THAT ARE FAVORABLE FOR FUNNEL CLOUDS THIS AFTERNOON. IN FACT...A FUNNEL CLOUD HAS ALREADY BEEN REPORTED NEAR NEW HOLSTEIN...IN SOUTHEAST CALUMET COUNTY.

THESE RELATIVELY WEAK FUNNELS TYPICALLY FORM FROM A SMALL SHOWER OR THUNDERSTORM...AND RARELY TOUCH THE GROUND. THEY NORMALLY EXTEND A FEW HUNDRED FEET DOWNWARD FROM THE BASE OF THE CLOUD...AND LAST A FEW MINUTES BEFORE DISSIPATING.

ON OCCASION...THESE FUNNELS CAN TOUCH THE GROUND AS A TORNADO...BUT THEY ARE USUALLY QUITE WEAK. THESE TYPE OF TORNADOES ARE MUCH LESS VIOLENT THAN TORNADOES THAT FORM WITH STRONG THUNDERSTORMS OR SUPERCELL THUNDERSTORMS.

IF YOU SEE A FUNNEL CLOUD APPROACHING YOUR LOCATION...SEEK SHELTER INDOORS.

News item of the day

2008-08-13T08:00:00.001-05:00

Chocolate-covered bacon?

I don’t know about this. For instance, I love pizza, and I love shrimp. But I do not love shrimp pizza.

Then again, who knew that Oreos or Twinkies could be deep fried?

Hypocrisy, thy name is Barack

2008-08-13T07:00:00.004-05:00

You may have heard, or heard about, this Barack Obama ad criticizing John McCain for McCain’s opposition to requiring government to buy American products.

Interesting, isn’t it, that Obama is criticizing McCain for his position against mandating buying American products when there’s one American product Obama refuses to purchase — American oil. Obama’s (and his congressional predecessors’) stubborn refusal to drill for oil in this country has helped make gas prices higher than they otherwise would be, helping lead to the demise of GM’s Janesville plant. (The more supply, the lower the price. You know that, but this and other Obama assertions make me wonder if Obama skipped economics in college, particularly, in this case, the class that discussed competitive advantage.)

As it is, the concept of buying American is a patriotic-sounding canard. (I’d be curious about what Obama’s well-heeled supporters drive.) Apparently Obama drives a Chrysler 300, which is manufactured in Brampton, Ont., which, last time I checked, is not in our 50 states. (Perhaps Ontario is in Obama’s 57 states.)

Buy-American government mandates pose a problem for governments given that the American option may be more expensive, assuming an American option actually exists. The police car following you is likely to be a Ford Crown Victoria, which is built in St. Thomas, Ont., or a Chevrolet Impala, which is built in Oshawa, Ont., or a Dodge Charger, which is built alongside Obama’s 300 in Brampton. Your favorite municipality could purchase a Chevy Suburban or Tahoe, but GM is closing its Janesville plant, leaving Suburban and Tahoe production in Arlington, Texas, and Silao, Mexico. If a police department wants to buy American by all definitions, the department’s choices are a Ford Explorer, built in Louisville and St. Louis, or Ford Expedition, built in Wayne, Mich.; neither, however, are rated for pursuits.

Our driveway features the flip side of this issue. (Not because of police cars parked in it, of course.) My Subaru Outback, as well as its predecessor, was built in Lafayette, Ind. Our Honda Odyssey was built in Alliston, Ont. (Odysseys are now also built in Lincoln, Ala.)

What about police motorcycles, the subject of this pseudocontroversy? Kawasaki used to build police motorcycles in Lincoln, Neb., but stopped in 2005, leaving Harley–Davidson (and, now, its Buell brand) as the only manufacturer to build police motorcycles in the U.S. Some police agencies have determined that Harleys are too large for urban police operations. Moreover, the police motorcycle market is a pretty small market, at least up here in the land of the 14-month-long winter.

So which is it? Is my Outback an American car because a Japanese manufacturer pays Americans to build it? Is Obama’s 300 an American car because a U.S.-based manufacturer pays Canadians to build it? Moreover, is it more important to buy American, or buy what the government agency needs, regardless of which company produced it or where it was built?

As with many other issues, Obama hasn’t been consistent on trade during this campaign. He pledged to reopen negotiations on the North American Free Trade Agreement, but now has backed off.

McCain has consistently supported free trade. During a Senate debate in 2005, he said, “I firmly object to all ‘Buy America’ restrictions, as they represent gross examples of protectionist trade policy. From a philosophical point of view, I oppose such policies because free trade is an important element in improving relations among all nations, which then improves the security of our nation. Furthermore, as a fiscal conservative, I want to ensure our government gets the best deal for taxpayers and with a ‘Buy American’ restriction, that cannot be guaranteed.”

Few reputable economists (or, if you like, only economists employed by unions) oppose free trade. In addition to the obvious benefits of choice and price competition to consumers, free trade benefits workers too. Not only does protectionism not benefit consumers; it doesn’t benefit presidential candidates either; the main protectionist candidates of the primary season, Democrat Hillary Clinton (whose husband was much better on trade) and Republican Mike Huckabee, aren’t running anymore, are they? The candidacies of Walter Mondale, Michael Dukakis, Pat Buchanan, H. Ross Perot and John Kerry similarly failed.

One other oddity about Obama’s ad, as WTMJ radio’s Charlie Sykes pointed out Tuesday: The ad repeats one of McCain’s best lines from his campaign so far: “Not long ago a couple hundred thousand Berliners made a lot of noise for my opponent. I’ll take the roar of 50,000 Harleys any day.”

The baseballogue

2008-08-12T07:00:00.005-05:00

I spent part of last week on a 1,350-mile six-state five-day four-game 41-inning baseball trip — Los Angeles Dodgers at St. Louis, Houston at Cincinnati, Boston at Chicago White Sox, and Washington at Milwaukee.

I went on the trip with my father and a high school friend of his. Those two originated the epic baseball trip almost 20 years ago, but this was the first time I got to go along. Their most epic trip was a six-games-in-six-days marathon starting with two games in Chicago, a trip to Detroit, games in Cleveland and Cincinnati, and then back to where the trips usually end, in Milwaukee. (The trips have been shorter since then, either due to the age of the participants or the fact that that’s a really long itinerary for anyone.)

It was entertaining to hear the two of them talk about their younger days, although it gave me the feeling most sons probably feel about their fathers, something along the lines of: If I had done one-eighth of what he did, he would have killed me. My father turns 70 in December, and although he's in good health, you never know how much time you're allotted.

The trip was, frankly, just about perfect. The weather was not so obscenely hot (as it was the first time I visited St. Louis — in sequence, 80 degrees and rain, 95 and 97, and it wasn’t dry heat) as it often is in the Midwest this time of year. All of the games, featuring five contenders for playoff berths, were at least entertaining (Dodgers 4, Cardinals 1; Astros 9, Reds 5 in 10 innings; Red Sox 6, White Sox 2; and Brewers 5, Nationals 4 in 13 innings) with memorable moments in all.

The Dodgers now have former Red Sox outfielder Manny Ramirez, who seems to be this generation’s answer to Reggie Jackson, judging from the boos that rained down in each of his at-bats. Like Jackson, known as “Mr. October” during his playing days, Ramirez, dreadlocks and all, rose to the occasion with a two-run home run that proved to be the winning runs in the Dodgers’ win.

Ramirez was part of a funny coincidence. Just before the trip, the Red Sox (who we saw Saturday) traded Ramirez to the Dodgers (who we saw Thursday), and the Reds (who we saw Friday) traded Ken Griffey Jr. to the White Sox (who we saw Saturday). Griffey didn’t play, though. (Then, on Monday, the Reds traded outfielder Adam Dunn to Arizona.)

St. Louis might have the best baseball atmosphere of any city I’ve been to. (I have not been to Fenway Park in Boston, though my wife has. Not that I’m jealous of that or anything.) Busc h Stadium — which opened two years ago to replace Busch Stadium, which replaced Busch Stadium in 1966 — is a wonderful place to watch baseball in an area where the Cardinals are clearly front and center. The neighborhood is very industrial, but bars are jammed in between the ballpark and two freeways and a railroad track, and it’s a very festive environment, with people dressed in red whether they went to the game or not.

After an all-day drive through Indiana and Kentucky to Cincinnati, game two featured a similarly nice ballpark, Great American Ball Park, but in a less exciting atmosphere. It’s in a great location, with the skyscrapers of downtown Cincinnati to the north and the Ohio River immediately south, but there is one sports bar in the area, and the fans are not nearly as interested in the Reds as the Cardinals’ fans were. (Then again, the Cardinals are in the hunt for a playoff spot, and the Reds haven’t been a contender since their new park opened in 2003.) Friday’s highlight was a bit of schadenfreude for 2½ fans (my father’s character flaw is that he is a Cubs fan) who witnessed former Brewers closer Francisco Cordero, who signed with the Reds as a free agent for $46 million, give up four 10th-inning runs in the Reds’ loss.

Great American Ball Park (right photo) had two things in common with Busch besides prominent use of red — attendance far higher than what one’s eyes saw. Friday’s attendance was allegedly 25,652, which looked about 10,000 optimistic to me. Thursday’s attendance was 40,500, but it appeared as though at least 5,000 fans were dressed as empty seats. In both cases, the reported attendance figures were probably tickets sold. I must say, though, that at up to $72 in Cincinnati and $120 in St. Louis, it’s hard for me to imagine that many people buying tickets to a game and then not attending.

Both Great American and the newest Busch are replacements for older stadiums (even down to the same round shape and old-style artificial turf) that were used for baseball and football, with the retro touches, such as irregular distances from home plate to the walls, of the stadiums replaced by the multiple-use stadiums. (And fans pay for the new ballparks in more ways than one: Beer at Busch was $8.50.) There are now identical square craters where both old stadiums stood; Great American was built east of the old Riverfront Stadium, and Busch was built across the street from the previous (middle-aged?) Busch. The former Busch crater is to be replaced by Ballpark Village, a “first-class entertainment and business center,” in time for the 2009 All-Star Game.

Cardinals games used to be on KMOX in St. Louis, a station that could be heard throughout the eastern two-thirds of the U.S. at night when the venerable Jack Buck (whose bust is next to me in the first photo) was their announcer. (Listening to Cardinals games was such a great experience that it almost made up for the fact that the Cardinals beat the Brewers in the 1982 World Series.) Reds games are still on WLW (700 AM) in Cincinnati, a station that can be heard throughout the eastern two-thirds of the U.S. at night, with the legendary Marty Brennaman as their announcer. Brennaman got to announce two World Series wins within two years of his 1974 hiring, but other than the Reds’ surprise World Series win in 1990, he has announced more bad teams than good in recent seasons. He does, however, now get to work with his son, Thom (who also does baseball for Fox), who chose to come to Cincinnati to work with his father. Joe Buck, Fox’s main football and baseball announcer, got to work with his father with the Cardinals. Chip Caray, son of late Braves announcer Skip Caray, worked with his dad in Atlanta and was going to work with his grandfather, Harry Caray, in Chicago before the oldest Caray died before the 1998 season.

Chicago wins the award for having the best ballpark in the worst neighborhood. The first thing we saw before we got to U.S. Cellular Field (known locally as “the Cell”) was, believe it or not, a rat walking across the street. What originally was called Comiskey Park (which replaced the older Comiskey Park across the street) was designed before the wave of retro-design parks began with Baltimore’s Oriole P ark at Camden Yards. The new Comiskey, in a primarily industrial and lower-class residential neighborhood on Chicago’s South Side, was immediately criticized for its liberal use of concrete and its vertigo-inducing steep upper deck (which is where we sat, and yes, it is quite steep). Renovations made the park look better, although it’s still quite a haul to the 500-level seats.

The surprising thing about the White Sox game was how many Red Sox fans were there — upwards of 10,000, I’d guess. (A few of them sat behind us for their second game of the day, having paid $140 a seat to see the Cardinals defeat the Chicago Cubs that afternoon.) Then again, like Packers fans on the road, given that Fenway Park is perennially sold out, it’s probably easier to see the Red Sox on the road than at home. The Red Sox fans were the happy ones after David Ortiz (a former Wisconsin Timber Rattler) hit a bases-loaded double to propel the Red Sox to their win, which knocked the White Sox out of first place for one-half day. (The game also knocked out White Sox starting pitcher Jose Contreras for the season and possibly his career after his Achilles tendon snapped on a play at first base.)

Our baseballathon ended at Miller Park for the 13-inning game between the Brewers and the Nationals. I’ve argued before that the best $100 million southeast Wisconsin taxpayers ever spent was the roof at Miller Park, which, of course, was open Sunday. It benefits the Brewers immensely, nevertheless, for fans to be able to have assurance, beyond an act of God (one game in Miller Park’s first year was postponed because of a power failure), that, if they buy tickets for a game, that game will be played, regardless of weather. I predict that the Minnesota Twins, who are replacing the unloved Metrodome with a new roofless park, will rue the day they decided against a roof when their attendance drops into four digits for cold early-season games a couple years after the newness of their as-yet-unnamed new stadium fades.

I heard two of the funnier lines I've ever heard at a baseball game:

After a disputed strike call: "Hey ump! The eye doctor called! Your contacts are in!"
To Brewer Bill Hall in the 11th inning: "Let's go, Billy! They stopped selling beer four innings ago!"

Sunday’s game featured two Brewers/Klements Racing Sausages races, one in the usual sixth inning (the funny touch was that the five big sausages relayed to five smaller sausages, paying their own tribute to the Olympics), and a bonus race in the 12th inning (last photo). Sunday also featured an eighth-inning three-run double by (reserve) catcher Mike Rivera to tie the game, and then a 13th-inning home run by (reserve) outfielder Gabe Kapler to win the game.

Hall of Fame manager Earl Weaver believed that every baseball team wins 60 games, and every baseball team loses 60 games; the remaining 42 games of the 162-game season determines the success, or lack thereof, of the season. Sunday’s Brewers win (happily followed by Monday’s win) was in the 42-game category, and a perfect way to end a grand slam of a trip.

Car safety for dummies

2008-08-11T07:00:00.005-05:00

I returned last night from the six-state five-day four-game baseball trip my father, his high school friend and I began Wednesday — 1,350 miles of summertime Midwest humidity.

During such a trip, one’s mind wanders and notices things that are independent of the purpose of the trip. Sitting in a sport utility vehicle equipped with air bags, anti-lock brakes and reminders to fasten your seat belt, I started thinking about automotive safety.

Car safety first began to be noticed in the 1960s. That was about the time our older readers were taking driver education in high school and watching movies of the kind profiled in the documentary “Hell’s Highway” — “Signal 30,” “Mechanized Death,” “Wheels of Tragedy,” “The Third Killer,” and “The Last Date.” That was also the publication period of Ralph Nader’s Unsafe at Any Speed, which slandered an innovative car, the Chevrolet Corvair, as part of an attack on the safety, or lack thereof, in motor vehicles. (Written by someone who doesn’t drive, by the way.)

The result of highway and vehicle safety legislation of the 1960s includes road signs that break off when hit by a car instead of stopping the car with often abruptly fatal results, padded car dashboards, anti-whiplash front-seat headrests, shatter-proof windshields, and seat belts. (Related legislation also mandated, as an anti-theft measure, locking steering columns, which is why the ignition switch migrated from the dashboard to the steering column.) My parents’ first second car was a 1965 Chevrolet Bel Air sedan, and because it only had front lap seat belts, my parents made my brother and I share the passenger-side seat belt. My parents never hit anything with the car, fortunately, since, with just the lap belt, my brother and I probably would have had our faces rearranged by the dashboard. (If you wonder how you survived to today given the number of things in your childhood now considered unsafe, you’re not alone.)

Regulation usually operates on the idea that if some is good, more is better. The National Highway Traffic Safety Administration mandated that carmakers install seat-belt warning lights in cars in the early 1970s — if the driver and front-seat passenger didn’t fasten their belts, an annoying warning light and buzzer combination would go off. Car owners responded by looping their lap belts around the latch so that the sensor thought the belts were in use because they had been pulled far enough out of the seat belt holder. NHTSA responded in 1974 by mandating that cars be equipped with seat belt interlocks — if you didn’t have your seat belt on, your car wouldn’t start. Congress responded to the rage of constituents who hadn't already disconnected the interlocks by repealing the mandate a year later.

A decade after that debacle, air bags started appearing in cars. By the early 1990s, automakers were required to install either air bags or other passive restraints in cars. My 1991 Ford Escort GT came equipped with automatic shoulder belts — I had to put the lap belt on myself, but the shoulder belt wrapped around me thanks to a motor and track mounted inside the door. The unintended consequence of that was that anyone who opened the car door to look backward to back up in a tight spot got to experience what having a seat belt wrapped around your neck was like.

My wife purchased a Pontiac Sunbird with a seat belt mounted high enough on the door that the front-seat occupants could theoretically get into and out of the car without disconnecting the seat belt. (Unless, that is, you weighed more than about 80 pounds.) GM also equipped Sunbirds and Chevrolet Cavaliers of the era with automatic door locks allegedly due to issues with car doors popping open during crashes. If you had an automatic-equipped Cavalier or Sunbird, the doors locked upon shifting into Drive and unlocked in Park. If your Cavalier or Sunbird had a manual transmission, the doors would lock at 8 mph, but not automatically unlock (do you want a car whose doors lock and unlock in stop-and-go traffic?), and since GM inside door handles did not automatically unlock locked doors, you had to unlock the door yourself every time you got out.

By the late ’90s, all new cars had air bags. By this time, as well, states had responded to federal government threats to withhold transportation funds by enacting mandatory seat belt use laws. (That damnable, undemocratic regulatory device began in the Reagan Administration.) So it may seem odd to you that car air bags of the time were designed to prevent an unbelted vehicle occupant from a head-first rendezvous with the windshield. But they were, with the result that more than 100 children and adults 5 feet 2 and shorter were killed by air bags. The notices carmakers then installed basically suggested that adults were guilty of child abuse if they put their children in their front seats. (A 1998 letter to the column “The Straight Dope” asked: “Am I crazy, or is it logical for a safety device to have a notice that it may kill you?” The response included the line that, given NHTSA’s assertion about lives saved by air bags vs. the reported air bag deaths, “22:1 is a pretty favorable kill ratio.”)

Today, cars are equipped with sensors that are supposed to disengage the air bag below a certain amount of detected weight on the passenger seat. Insurance companies typically classify cars as totaled if the air bags deploy. And if taller and larger readers have noticed that newer cars offer less front-seat leg room, there’s a reason — the carmakers have lined up your body so that the air bag goes off right in your face. Whereas tall drivers used to be able to mount seats farther back than the rearmost adjustable position, with frame-mounted seats, that’s no longer an option.

About the time of the seat belt interlock travesty, the national 55 mph speed limit was enacted by Congress, ostensibly as an energy-conservation measure. When energy costs weren’t an issue, the safety types then claimed saved lives as the result of lower speeds, ignoring the fact that the 55 mph law was an abrogation of the right of states to create their own traffic laws, tremendously unpopular and studiously ignored nationwide. Wisconsin never rescinded 55 for roads other than four-lanes, and there are proposals to reinstitute 55 nationwide in our era of $4-a-gallon gas prices. If for no other reason than the fact that the only truly nonrenewable resource is time, 55 was a stupid idea when it was created, and it is a stupid idea now.

Over the past eight years, I’ve had experience with child car seats — mystification at badly written directions, skinned hands, crying children and delays in arriving at intended destinations, to be precise. Evidently car designers and child seat designers are unaware of the other group’s existence, particularly on the subject of getting three child seats onto one bench seat. Many health care providers offer periodic child car seat clinics, including installation checks, but unfortunately seats get moved around from car to, say, grandparents’ cars, and the installation checkers don’t travel with your seat. The other oddity is that safety advocates recommend not purchasing car seats at garage sales, inferring that the state-of-the-art car seat you purchased a few years earlier has become an infant or toddler death trap sitting in your basement.

Legislation, at least in Wisconsin, operates on the idea that if it’s a good idea, it should be the law. So, of course, child seat use is the law in Wisconsin — rear-facing seats to age 1 or 20 pounds, forward-facing seats to age 4 or 40 pounds, and booster seats to age 8, 4-foot-9 or 80 pounds. As with seat belt laws, it seems highly unlikely that there are very many parents who wouldn’t use child seats unless the law required their use — either parents use them because they should be used, or they don’t use them because they’re irresponsible regardless of what they law says.

Cars now have air bags, side door beams, anti-lock brakes and frame-mounted latches for the aforementioned child seats. (Perhaps it's because I've never been in a crash where an air bag went off, but I'm not sure the air bag is worth the cost, in contrast to what the safety-obsessed claim, for those who wear their seat belts.) And as a direct result, cars are heavier and get worse fuel economy than they did even 15 years ago. Then again, carmakers are in business to make money (despite their recent financial statements), so cars with all that safety equipment are also incrementally more expensive, which discourages people from buying new cars with the latest safety equipment.

You may have noticed something in common with all these safety improvements — that they are apparently designed largely for someone with an IQ of 55. Seat belt and child seat laws assume that you are too stupid or negligent to grasp that you’re safer wearing your seat belt and your children are safer riding in car seats, and if that really is the case, then no law is going to change your ignorance. And as I’ve argued before, speed limits well below the design speed of highways only encourage violation and contempt of the law, in addition to wasting the only truly non-renewable resource of ours — time.

I would argue that air bags, anti-lock brakes, traction control and other car safety improvements have actually led to worse drivers and driving. The reason is simple — too many drivers feel invincible behind the wheel thanks to those safety devices and assume their cars can get them out of any difficulty they might drive into, or prevent them from harm from said difficulty. I do not want to go back to the days of bias ply tires and four-wheel drum brakes, but that’s because radial tires and disc brakes are performance improvements, not just safety improvements.

No safety device, law or regulation has as much an effect on safety as the quality, or lack thereof, of the driver. If government were really serious about car safety, it would be harder to get and keep a driver’s license.

“Citius, Altius, Fortius”*

2008-08-08T08:00:00.000-05:00

Today is what might as well be the official start of the Olympics, because today is when NBC carries the Olympics opening ceremonies, even though events began Wednesday. (One could say the official start of the Olympics is the first official blasting of “Bugler’s Dream,” the name of which you may not know, but the music of which you do.)

The best thing about the Olympics may be that, for sports fans, TV-watching improves tremendously. Journal Communications’ own WTMJ-TV (channel 4) in Milwaukee and WGBA-TV (channel 26) in Green Bay will carry the Games weekdays from 10 a.m. to 1 p.m., from 7 to 11 p.m., and from 11:30 p.m. to 1 a.m. (Ask for me the next couple of weeks, and you will find me a yawning man.) USA Network’s daily schedule is from 1 to 11 a.m., MSNBC has the Olympics from 4 a.m. to 4 p.m., CNBC gets the Olympics from 4 to 7 p.m. and from 11 p.m. to 3:30 a.m., and even Oxygen gets into the act with gymnastics starting Monday. If you’d like to listen in Spanish, Telemundo also has Olympic coverage.

The multiple cable options are a big improvement for sports fans, because they allow more focused sports coverage — USA Network will have basketball, soccer, tennis, water polo and volleyball; MSNBC will feature softball, beach volleyball, wrestling, volleyball and weightlifting; CNBC will focus on boxing; and Oxygen will also feature equestrian and tennis. The biggest problem with NBC's Olympics coverage is that it's not really geared for sports fans; in fact, event coverage degenerates into soap opera, a trend that began with ABC-TV's "Up Close and Personal" vignettes during their coverage.

(Speaking of up close and personal: my wife was a translator — Spanish and, unexpectedly, Portugese — for Olympic volleyball in the old Omni for the 1996 Olympics in Atlanta. One night, I was idly watching late-night coverage back in Wisconsin when it was suddenly interrupted for news of the Centennial Olympic Park bombing. That caught my immediate attention because the Omni wasn’t far from the bombing site, and I wasn’t sure if she might not have been in that area at the time. She wasn’t, I found out after one after-midnight phone call to the house where she was staying.)

It would be nice if the Olympic movement was only about athletic achievement. For that matter, it would be nice if the Olympic movement was motivated only by athletic achievement. It would also be nice if the Olympics was a place where international disagreements could be set aside for a couple of weeks. None are the case, of course; in fact, anyone who says the Olympics should be free from politics doesn't know much about the Olympics, of which USA Today's Richard Benedetto said, "Sports and politics are running mates."

The Olympic movement has been the poster child for political intrigue for almost its entire existence, dating back to the days when Baron Pierre de Coubertin resurrected the Olympic movement in the 1890s. Coubertin believed that professional athletes soiled sports, so, when Jim Thorpe was discovered to have played "professional" baseball ($2 a game), he was stripped of his medals even though his losing his medals was against Olympic rules. Adolf Hitler viewed the 1936 Berlin Olympics as a chance to show off the superiority of his master race. Several Arab countries boycotted the 1956 Melbourne Olympics to protest Israel, and 20 years later many African countries boycotted over South Africa. The 1968 Mexico City Olympics was marred by the Mexican government's massacre of more than 200 protestors.

The Weekly Standard is not the first to have discerned similarities between China's being selected to host this summer's Olympics and Nazi Germany's hosting the 1936 summer Olympics, what with Darfur, Tibet, arrest and imprisonment of political dissidents and Tiananmen Square on China's civil rights résumé. As Weekly Standard writer Dean Barnett puts it, "Unwholesome Olympics politics are more the rule than the exception," including the 1936 Olympics and boycotts by the U.S. in 1980 and then of the U.S. by Soviet bloc countries four years later. In a completely different category would be the murder of 11 Israeli athletes by Palestinian terrorists in the 1972 Munich Olympics, an obscenity basically blown off by International Olympic Committee head Avery Brundage, a truly loathsome figure in sports history.

Beyond boycotts, each of the winter and summer Olympics between 1948 and 1988 was an athletic attempt for the U.S. and the Soviet Union to show off its superiority against the other. This was a rather stacked race given that the U.S.S.R.'s "amateurs" were not amateurs at all. Some viewers see NBC's coverage of the Olympics as excessively pro-American to the point of being jingoistic. And we haven't even discussed various medical scandals tied to the effort of outdoing the competition.

Commercialism has been a recent complaint (I wonder how much it would cost to be designated "the official conservative/libertarian online political column of the Olympic Games"), and yet the three U.S. Olympics held in the past 25 years — Los Angeles in 1984, Atlanta in 1996, and Salt Lake City in 2002 — all were profitable. (I was in Salt Lake City three years before the Olympics, and one business group that benefitted from the Olympics before the Olympics were road builders.) The Athens Olympics in 2004 and the Turin Winter Olympics in 2006 ran deficits.

Still, the Olympics can generate stunning achievement, including gold medals by athletes you've never heard of, such as American Billy Mills in the 1964 10,000-meter run, or Nadia Comaneci in 1976 gymnastics, or Cathy Freeman in the 2000 400-meter run. And, of course, there was that hockey team in 1980. (1960, too.) The Olympic Games is worthwhile watching, as long as you don't watch too closely.

* “Swifter, higher, stronger” in Latin.

The Hyphen School District

2008-08-07T08:00:00.002-05:00

I have covered high school sports, either full-time or on the side, for more than 20 years. Some years ago, I came up with, or swiped from someone else, the term “the hyphens” to describe consolidated school districts — in Marketplace’s circulation area, Beecher–Dunbar–Pembine, Cedar Grove–Belgium, Goodman–Armstrong Creek, Howard–Suamico, Iola–Scandinavia, Luxemburg–Casco, Rosendale–Brandon, Southern Door County, Tomorrow River, Tri-County, Weyauwega–Fremont and Wittenberg–Birnamwood.

Actually, that’s an incomplete list. In fact, almost every school district is a consolidated school district regardless of its name. The one-room schoolhouses that dotted the landscape were either closed or consolidated into other school districts through the 1960s. The buildings are still there in many cases, but they’ve been converted into houses or other uses. By state law, every piece of property must be part of a school district, and school districts only grow in size by annexation — which is difficult given that no school district wants to shrink and thus lose land value — or by merging with another school district. That’s how you get the odd cases of, for instance, my former house that was in the City of Appleton and the Menasha school district.

The consolidation question is coming up again given the pickle many school districts find themselves in with the state’s school district budget revenue caps. The Ripon Commonwealth Press reports that the Markesan School District is proposing joining with adjacent school districts to create a new seventh- through 12th-grade unified school district. Markesan is surrounded by nine other school districts — going around the compass, Green Lake, Ripon, Rosendale–Brandon, Waupun, Randolph, Cambria–Friesland, Pardeeville Area, Montello and Princeton — and though larger school districts such as Ripon or Waupun are not likely to be interested, school districts of Markesan's size, such as Green Lake or Princeton, might be.

This is a good time to open the school district consolidation discussion. Consolidating school districts does not have to mean closing the doors of school buildings, although the Markesan proposal would create one larger high school out of, optimally, three smaller high schools. (Combining Green Lake, Markesan and Princeton would create a high school of 541 students, about the same size as Ripon.) The number one reason to consolidate is administrative savings — one school district administrator, one bus company, one food service operation, one maintenance operation, and so on. The second reason is the opportunity to expand program choices to students, programs that one small district might not be able to afford, but a larger district could.

There are a number of places within Northeast Wisconsin where school district consolidation should have already taken place. Now that we have modern roads, bridges and communication methods, there is no earthly reason for the city of De Pere to have two school districts for the east and west sides of the city, particularly when the school districts have the state's 76th highest and 47th highest school mil rates, 16.1 percent and 20.6 percent higher than the state average, respectively, according to the Wisconsin Taxpayers Alliance. The Markesan (90th highest mil rate) and Green Lake (395th, thanks to all that expensive lakefront property) school districts have been jockeying around a property transfer, when what they should be discussing is merging the school districts, as they now may be discussing. (The Commonwealth Press story, which is not available online, contained no comments from Green Lake School Board members, who were at a joint meeting with their Markesan counterparts.)

Consolidation is the farthest step, but it's not the only option. Randolph and Cambria–Friesland have been near merged for years, with many shared programs, including athletic teams; the same is the case with three school districts in southwest Wisconsin, Cuba City, Southwestern and Benton. After the Bloomington and West Grant school districts merged and then demerged acrimoniously in the 1950s, cooler heads prevailed 40 years later, and the River Ridge School District was created. (It is not far from northwest Illinois' River Ridge School District, but given both districts' proximity to the Mississippi River, the names are appropriate. At some point, perhaps the two River Ridges will play each other in sports.)

One point of resistance to merger is the loss of civic identity that happens when a community loses its high school, which is a big deal in small-town Wisconsin. Even though school property tax rates aren't at the $30 per $1,000 assessed valuation level anymore, as they were in some rural school districts in the late 1980s, one wonders how long civic pride can hold off economic realities. It's better for school districts to arrange mergers on their own terms than to simply close, as the former Ondossagon school district in northern Wisconsin did earlier this decade and as the Florence School District almost did in 2005.

State law might have to be massaged to ease budget controls for merged districts for a set period of time to encourage mergers, as has happened in the past. (State aid already has hold-harmless provisions for merging districts, according to the state Department of Public Instruction.) And obviously there are geographic limits to which school districts can merge. But school districts having financial issues need to take the merger option more seriously today, if for no other reason than to ease the financial burdens of those paying for our state's schools.

Analysis of the Day

2008-08-07T07:00:00.003-05:00

University of Chicago economist Gary Becker and former federal appeals judge Richard Posner, who have their own blog, on “Is America in decline?”

Analysis of the Day

2008-08-06T08:00:00.002-05:00

The Cato Institute's Ilya Shapiro, on the group that is likely to decide this election — Purple America, which is not merely swing voters or even swing states:

The real Purple America is not a place but an idea, a confluence of values from Red America and tastes from Blue America. It combines a strong belief in personal responsibility, ordered liberty, and civil society with a passion for independent film, Belgian ale and salsa dancing. It also could spring for a good ball game (though preferably on grass and without the designated hitter).

Purple Americans are, to offer a gross oversimplification, a sober blend of Ricky Bobby and Jean Girard (the reference to Will Ferrell's farcical Talladega Nights is fitting here; this demographic skews young and irreverent.) They are an imagined community of conservative cosmopolitans, libertarians, classical liberals, hipublicans, South Park conservatives, Crunchy Cons and, especially, those who defy established labels — and thus are distrusted by both coastal elites and heartland populists. ...
Purple America demands independent creativity grounded in a solid moral core, as well as an inevitably thick skin. ... Purple America enjoys fireworks and barbecue on the Fourth of July and will relish the playing of the Star Spangled Banner at the Beijing Olympics in August. It welcomes diversity, but not the false diversity that sees a black lawyer's kid from the suburbs as more worthy than the son of an Appalachian coal miner or Vietnamese fisherman.

Sounds like Marketplace readers, doesn't it?

Analysis of the Next 18 Days

2008-08-06T07:00:00.003-05:00

With the Beijing Olympics beginning today (click here for the schedule), Forbes.com collected 31 perspectives on the Olympics, including from Olympic gold medalists Kerri Strug, Misty Dawn Hyman, Matt Biondi, Tommie Smith, Mark Breland, Billy Mills, Leon Spinks, Jackie Joyner-Kersee, Dominique Moceanu, Shawn Crawford, Karch Kiraly, Carly Patterson, Angelo Taylor, Dominique Dawes, Olga Korbut, Michael Phelps, Shane Gould, Kristine Lilly, Sanya Richards, Amy Van Dyken, Frank Shorter and Nancy Hogshead.

The overtaxing deficit

2008-08-05T07:00:00.002-05:00

Originally printed in Marketplace Aug. 5, 2008

What a year Wisconsin state government has had, and we’re just past the seven-month mark.

Just since New Year’s Day, the Legislature (1) dealt with a $652 million budget deficit by cutting just $69 million in spending, requiring Gov. James Doyle to cut an additional $201 million, while doing nothing about the (2) $2.15 billion deficit that exists when measuring state finances by Generally Accepted Accounting Principles or the (3) $1.7 billion structural deficit, the result of pushing state spending out of one budget cycle and into the next through accounting tricks. Those who win the legislative elections Nov. 4 could be said to be the real losers because they get to deal with all that.

State government’s bad year got even worse July 11 when the state Supreme Court ruled that the state Department of Revenue had overtaxed Menasha Corp. specifically, and other businesses generally, to the tune of $265 million in overpaid sales taxes and interest. Menasha Corp. had held that the software it purchased was not subject to the sales tax (custom software is not, but non-custom software is). In order, the Department of Revenue said the software was subject to the sales tax, the Tax Appeals Commission said it was not, a Dane County circuit judge said it was, the state Court of Appeals said it was not, and the Supreme Court agreed with the Court of Appeals.

Menasha Corp.’s part of the overpayment is $300,000, plus an additional $300,000 in interest. The Milwaukee Journal Sentinel reports that “dozens of other companies” believe they have overpaid software sales taxes as well. That $265 million figure may just be a starting point.

You could take all of the wages of every Department of Revenue employee (as reported in 2007), about $11 million, and that would cover all of 4 percent of the $265 million. Doyle, other state elected officials, and the Assembly and Senate total about $6.78 million in salaries. Combine the two groups, and if you didn’t pay any Department of Revenue employee, the governor, the attorney general, other statewide elected officials and any senator or representative, the state could have Menasha Corp.’s overpaid tax bill paid off in just 15 years.

Chief Justice Shirley Abrahamson, one of the three dissenting justices, said “Taxpayers will pick up the tab left by those who have escaped taxation as a result” of the decision. Apparently Chief Justice Abrahamson believes that no one should ever take advantage of a tax exemption or deduction because that would be “escap[ing] taxation.” That is also analogous to saying that an innocent person who is reprieved from a death sentence has escaped capital punishment.

The point is that Menasha Corp. should not have had to pay — was not legally obligated to pay — the additional sales tax. The Tax Appeals Commission made that exact ruling. (Isn’t it nice to know that the state Department of Revenue sees fit to ignore the law?) The fact that the state now owes Menasha Corp.$600,000, and may owe other similar companies more money, is the fault of the Department of Revenue, and thus state government.

This is the sort of the thing that, had a similar incident occurred in the private sector (say, a company the size of Menasha Corp. suddenly found itself owing $265 million in unpaid taxes, interest and penalties), would have resulted in firings, and probably not just one. I don’t think this is the result of some faceless bureaucrat misreading the law — this was probably a policy decision high up in the Department of Revenue to keep assessing tax on this particular variety of software until someone made them stop. It certainly makes one wonder how many other businesses — and, for that matter, individuals — are paying more taxes than they are legally required to merely because some DOR bureaucrat told them they had to.

This is also a perfect example of the kind of messing around that occurs in taxing entities or activities that should not be taxed — for instance, corporate income and personal property. The property tax is supposed to pay for government activities tied to property — for instance, police and fire protection. (Schools too, although the School Taxes Off Property organization wants schools funded by something other than the property tax — namely, ending all exemptions from taxes, which means STOP advocates reducing taxes by increasing other taxes.) It’s not clear to me, for instance, why Menasha Corp. has to pay sales tax at all for something that is required for them to conduct business.

For that matter, as I’ve argued in this space before, it’s not clear to me why businesses should have to pay taxes other than what funds strictly property-based services. In addition to the savings for companies in the cost of complying with our tax system, the savings from not paying corporate income or personal property taxes could go in one or more of three directions — more investment in the company, more pay for employees, or more dividends for shareholders. Any combination of those three is preferable to giving state government and our elected officials more money to waste. The benefits any business provides the areas they’re in, beginning with providing jobs — in addition to the 1,200 jobs it provides, Menasha Corp. has donated more than $1 million to Fox Cities-area charities in the past year — far exceeds whatever taxes a company pays.

Ending corporate taxes would have the additional advantage of ferreting out hidden taxes, because, as we all know, businesses don’t pay taxes, they pass them on to customers or their shareholders. Every dollar a business is taxed — whether legally or, in the case of Menasha Corp.’s overpayment, not — is one more dollar in the price of a product, one less dollar that can be spent on the company (including employee pay), or one less dollar that can be passed on to shareholders. It’s amazing how many people don’t understand that, and yet that is an incontrovertible fact.

Correction and clarification: The original version of this commentary, printed in the Aug. 5 Marketplace, incorrectly reported that Menasha Corp. was overtaxed $265 million; corrections have been made in the online version of this commentary. The state Department of Revenue now estimates that the overtaxed amount to Menasha Corp. and other companies totals $277.6 million.

Analysis of the Day

2008-08-04T08:00:00.001-05:00

University of Wisconsin Prof. Donald Downs (professor in my UW criminal law class, by the way) in Sunday's Wisconsin State Journal on "Change we can believe in," which isn't based on the presidential race:

The deeper problem is the "political class" itself, the members of Congress (and their worshipful entourages) who often seem more content to luxuriate in the perks of power than to do what is necessary for the national interest.
Sure, the parties are beholden to different major interests, such as Big Business, Big Oil, Big Education, and Big Law (Torts). But none of these interests holds out any promise of constructive change, just a reshuffling of the deck of political business as usual.
We confront not a partisan problem, but rather an institutional problem.

Downs has a nonpartisan suggestion for the Nov. 4 congressional elections:

Re-elect those who truly stand for constructive change, and throw out those dedicated to maintaining the perquisites of the political class.
The incumbency protection racket makes this a Sisyphusean struggle, but Congress's 15 percent national approval rating (half that of one of the most unpopular presidents on record) provides a measure of hope.

We’re number 43!

2008-08-04T07:00:00.005-05:00

Three weeks ago, CNBC.com released its survey on states as places to do business, in which Wisconsin ranked 37th.

Forbes magazine has now issued its ranking of states as places to do business. And Wisconsin doesn't rank 37th. Wisconsin ranks 43rd, behind, in the Midwest, Minnesota (11th), Iowa (22nd), Indiana (25th), Missouri (30th), Illinois (35th) and Ohio (39th) and ahead of only Michigan (47th). Virginia ranked first, followed by Utah and Washington; West Virginia ranked last.

Forbes' rankings are based on business costs, as in costs of labor, energy and taxes; labor, including educational attainment, net migration and projected population growth; the regulatory environment, including the regulatory and tort climate, incentives, transportation and bond ratings; the economic climate, based on growth in jobs, income and gross state product, unemployment rates and the presence of large companies in the state; growth prospects, forecasts of the future economic climate (in Wisconsin's case, gross state product growth of 2.1 percent is predicted, which ranks Wisconsin 41st); and quality of life, an index based on schools, health, crime, the cost of living and poverty rates.

Wisconsin got to 43rd by ranking 37th in business costs, labor and regulatory environment, 26th in economic climate, 46th in growth prospects, and 16th in quality of life. (Note, under regulatory environment, the words "bond ratings," of which Wisconsin's has been steadily falling due to our budget messes.)

The CNBC.com and the Forbes rankings are consistent in cost of doing business (37th from Forbes, 36th from CNBC.com). Wisconsin ranks better in Forbes' eyes in our economic climate (26th) and in quality of life (16th) than in CNBC.com's eyes (36th and 25th, respectively); even though the economic climate measure isn't an apples-to-apples comparison, the comparative rankings to other states are instructive. When you rank 46th in growth prospects, it's clear Forbes isn't bullish about your state.

One significant part of Forbes' ranking has to do with a Pollina Corporate Real Estate ranking of "states’ efforts to be pro-business ... limited to factors over which state government has control." The list shows only the top 10 (North Carolina is number one; no Midwest state is on the list), so we can't tell where Wisconsin fits on this list, but you can draw your conclusions from Wisconsin's lack of executive summary mention and from this:

The list reflects state leadership that truly understands the importance of producing the best job opportunities available for their constituents. The state governments at the top of the list understand that they must be very pro-active in the international battle to keep and attract jobs.
The way that business is conducted in this century is significantly different than it has been in the past. The question is: How is American business and government adapting to these economic realities?
"Our clients are under constant pressure from national and international competitors to be as economical and efficient as possible and often post the question to us: If we are to keep our operations in the U.S., which states have the most pro-business climates?" said Brent Pollina Esq.
The Pollina Corporate Top 10 Pro-Business States were selected based on those factors that are most important to corporate executives and can be controlled by a state's political leaders.
"Each of the Top 10 Pro-Business States has something to learn from the others and all 10 should be held up as models for the other 40 states and the federal government," said Mr. Pollina.

Wisconsin's leaders may understand "the importance of producing the best job opportunities available for their constituents," but it's not clear they know how to produce the best job opportunities available for their constituents. Wisconsin has a number of tax credits (Assembly candidate Jo Egelhoff lists "higher education tax credit, early stage investment credits, research and development credits and investment tax credits"), but we still have one of the highest corporate income tax rates in the nation, high property taxes, and a state Department of Revenue that likes to assess sales taxes on corporations that legally don't have to pay them. (More on that Tuesday in this space.) Wisconsin's low ranking also shows that other states are more aggressive in tax and other incentives, which Pollina identifies as "tax breaks, job training, free land, subsidized rent, free infrastructure, forgivable loans and numerous other creative forms of assistance."

Moreover, Pollina points out, "State financial incentives are often confusing and difficult for most companies to access. Most industry experts agree that most companies, when relocating, expanding or consolidating facilities in the U.S., receive only 10 to 15 percent of the incentives that are potentially available to them. This is the case even among the largest corporations. Companies must know what to ask for, whether they will qualify for programs and what the true value of programs are. It is a negotiation process, and those who know the programs, the states and how to extract the assistance receive the most benefits."

It would be easier to attract businesses here if we could tell prospective businesses that a business doesn't have to worry about compliance with corporate taxes, because we have none, instead of sticking them with a big tax bill and then advice on applying for this or that tax credit. Instead, our elected officials are more afraid of what the teacher's union or the public employee unions would say at the thought that businesses and their employees do a whole lot more good in this state than public employees do. It also appears, based on the way these rankings were compiled, that touting our (supposedly) great schools and quality of life matters much less to businesses not in this state than how much doing business in Wisconsin will cost them.

I'll repeat what I said in this space three weeks ago: Someone must point out that, compared with the states with which we are competing for business — including keeping the businesses we have here from leaving — Wisconsin has barriers to business vitality, economic prosperity and wealth creation, and if we ever expect sustained and sustainable improvement in our state's economy, we need to eliminate those barriers, particularly on Election Day.

“So long, everybody”

2008-08-04T06:00:00.011-05:00

The sports broadcasting world lost another great Sunday with the death of Skip Caray, longtime Atlanta Braves announcer, at 68.

Obviously this is not an Atlanta business magazine. (For one thing, Monday's high is forecast to be 83, not 95.) But many people my age and younger got a chance to watch a lot of Braves and Chicago Cubs baseball thanks to the Atlanta and Chicago satellite-delivered superstations. That is why the Braves (who called themselves “America’s Team” during the 1980s) and Cubs have a nationwide following, more than any other team except the Yankees. Skip’s father, Harry, was the Cubs announcer during the 1980s, while Skip was one of four Braves announcers who rotated through broadcasts on TV and radio.

Harry was something like having your slightly addled grandfather announce a game — he may go far afield from the game, and he may not always know what he’s talking about, but you love him just the same. For instance, Harry, shall we say, enjoyed adult beverages, which sometimes became apparent in later innings.

Harry Caray was a legend in St. Louis, where he announced for 25 years until he was fired over a rumored affair (there is more than one version of the story, one of which was told to me by a former colleague of Caray’s). From there, he announced for one year in Oakland, then announced White Sox games before moving to the North Side of Chicago, where he announced Cubs games and became a legend in Chicago too until his death in 1998.

Skip didn’t want to be a second version of his father, so he headed to Atlanta and adopted a quite different on-air persona. (I always thought his voice sounded like Edwin Newman, while his style was more like David Brinkley.) Where Harry was the hail-fellow-well-met guy, Skip was much more sarcastic and more witty, refusing to take the game too seriously. Like his father, Skip was worth watching in the pre-1990s days of terrible Braves teams merely for what he would say next. Some examples from ajc.com:

At the beginning of a game in a middle of a long losing streak, he said, “And like lambs to the slaughter, the Braves take the field.”
Until Braves owner Ted Turner made him stop, upon reaching the bottom of the fifth inning: “We’ve come to the bottom of another fifth.”
During a late at-bat of a Braves hitter during a game in Los Angeles: “He has twice grounded to short. [After the swing] He has thrice grounded to short.”
When the Braves loaded the bases against the Florida Marlins: “The bases are loaded, just like [Marlins manager] Jack McKeon probably wishes he was.” Later (after he stopped drinking due to health problems), when the Braves bullpen also allowed the bases to be loaded, he said, “The bases are loaded again, and I wish I was, too.”
During a period where Turner prohibited CNN announcers from using the word “foreign,” mandating “international” instead, a batter called time out and stepped out of the batter’s box because, Caray explained, “he had an international object in his eye.”
Caray described one poorly attended Braves home game as “a partial sellout.” Another home game, with entire sections of empty seats, was called “Blue Seat Night, folks — you dress up like a blue seat, you get in free.” In another game, he announced, “The stadium is filled tonight, but many fans have come disguised as empty seats.”
During a blowout loss: “This is as much fun as writing an alimony check.”
According to Caray, he once encountered a panhandler, and said before the panhandler could say anything, “Nothing for me today, thanks.” The panhandler’s reported reply: “Jenny Craig is just a phone call away.”
Caray once interviewed the San Diego Chicken (which, like almost all mascots, is of course mute), asking him one question: “Why did you cross the road?”
Caray, about opposing pitcher Roger Mason: “Boy, Mason is really getting jarred tonight.” Partner Joe Simpson: “Put a lid on it.”
Caray once mispronounced the name of Philadelphia Phillies third baseman Mike Schmidt, omitting the M and adding a Z sound at the end. After coming back from commercial, his partner, former Milwaukee Braves pitcher Ernie Johnson, asked, “What was the name of the Phillies third baseman again?”
In one of the strangest games in baseball history, a 19-inning twice-rain-delayed game against the New York Mets on Independence Day 1985, a game that began at 7:40 p.m. and ended at 3:55 a.m. with, yes, the scheduled fireworks display, Caray (who always called extra-inning games “free baseball”) said it was the first time he had come home at 5 a.m. for a legitimate reason.
Like former Detroit Tigers announcer Ernie Harwell used to do, Caray would announce that a fan from some randomly-named Georgia community caught a foul ball. So when the Braves held Bark at the Park Night, where fans could bring their dogs to the game, he at one point announced that a foul ball had been caught by “a Weimaraner from Newnan.”
Caray was talking to fellow announcer Don Sutton about former Dodgers second baseman Steve Sax’s brief inability to throw to first base, and asked Sutton if he had spoken to Sax recently. After Sutton’s answer, Caray replied, “Maybe you should just phone Sax.” (You have to say it to get the joke.)
When the Cincinnati Reds brought in relief pitcher Todd Coffey: “Well, the Braves are going to try to cream Coffey here in the seventh.”
Near the end of yet another Braves loss: “If you promise to patronize our advertisers, you can go walk the dog.”

After the death of Cardinals announcer Jack Buck, who worked with Harry Caray in St. Louis before replacing him (and whose style was closer to Skip’s than Harry’s was), Skip told the story about how Buck and Harry Caray worked a Cardinals spring training game in Florida following a long night out. The Cardinals were playing the White Sox, who had catcher Gerry McNertney, whose name proved unpronounceable for Harry Caray and Buck. It got worse and funnier as the game wore on, until the two hatched upon the solution of announcing a pinch-hitter for McNertney, even though he was still in the game. (This is the sort of thing that can be done only on the radio.)

For one of Caray’s two greatest broadcast moments (other than the chance to work with his father and his son on the same Cubs–Braves game), the sudden ending of the 1992 National League Championship Series, click here. Like the Brewers’ success last and this season for long-time (and long-suffering) Brewers announcer Bob Uecker, the Braves’ successes of the 1990s, including five National League titles and a World Series win in 1995, were great reward for someone who previously had called a lot of bad baseball.

Interestingly, even though Skip (whose real name was Harry Jr.) tried not to emulate his father, they both had the same sign-off: “So long, everybody.”

A day at the EAA

2008-08-01T07:00:00.004-05:00

I spent Thursday at the EAA AirVenture.

To answer your first question, no, I did not witness the fatal plane crash that occurred Thursday morning short of the east end of Wittman Regional Airport's east–west runway.

That is the second time I've missed a plane incident in the three times I've attended EAA. One other time, I came home from Oshkosh to find out that an emergency landing had occurred while I was on the flight line (and a Green Bay TV station had caught it on tape). And this had happened without my noticing that either.

That's easier than those who have not been to Oshkosh might think. The AirVenture is so spread out that, as EAA's Web site notes, "Just truckin’ around the grounds can add up to several miles over the course of one day. ... Although many have tried, it is literally impossible to see everything in one day, much less a week."

Someone with an interest in mechanical things but no interest in flying things would still find the AirVenture fascinating. There were torn-down engines everywhere so that would-be owners could see for themselves how the planes run. There were interior and cockpit mockups for pilots to try. It's not quite as expansive as the Iola Old Car Show, which seems to have enough parts with which to assemble an entire car on-site, but then again airplanes are more expensive than cars. (For that matter, there were several manufacturers offering car engines that could be installed in airplanes. The newest trend in engines appears to be plane engines that can run on diesel or kerosene.) And, for those really not interested in airplanes (why such a person would go to EAA is a good question), Ford, a major AirVenture sponsor, had cars and trucks, including its new F-150 pickup and several Mustangs (matching all the P-51 Mustangs in the Warbird section), and Oshkosh had, of course, airport fire engines.

The difference between car construction and airplane construction is apparent if you look hard enough. Planes have exposed rivets and screws on their outside, and that doesn't cut it in the automobile marketplace. On the other hand, there is certainly a higher standard for engines in aviation than in automobiles; if you car's engine quits while you're driving, you're stranded; if your plane's engine quits while you're flying, that's an order of magnitude more serious. Many planes also have pressurized cockpits, and if the air's thin enough to need a pressurized cockpit, then that's pretty thin air for the plane's engines too.

The difference between Iola, which I attend almost every year, and Oshkosh is that the only car demonstrations at Iola are cars entering and leaving the grounds. So many planes take off and land that, not only is Wittman the busiest airport in the world this week, another plane taking off gets almost blasé after a while — that is, until your teeth rattle with an F-16 or F-18 military jet lighting up the afterburners.

The spirit of AirVenture is that all planes are cool, whether they're to your taste or not. The V-22 Osprey pictured at the top combines facets of helicopters and propeller planes. The fact that the Osprey is rather controversial in military and political circles wasn't mentioned, and what would be the point of mentioning that at an air show?

The craziest thing there was unquestionably the Martin Jetpack, billed as "the world's first practical jetpack." I wasn't there for its debut Tuesday, but I am so far failing to imagine the circumstances under which I would strap on something that can, according to its creators, hover up to 8,000 feet, even if it includes a ballistic parachute. (It is considered, believe it or not, an ultralight airplane. I've been in an ultralight before, and it was a great experience. That ultralight, however, had wings.)

Perhaps the most interesting facet for a business person is the promotion of business travel without depending on airline schedules and getting frisked in a very personal way in airports. There were displays for more business jets that I ever knew existed. Two of the more interesting ones were the Eclipse 400 and 500, jets that are supposed to be less expensive and easier to operate than their competition. (The National Business Aviation Association will tell you that the Economic Stimulus Act of 2008 not only provides tax benefits for companies that buy airplanes this year, but may provide tax benefits as well for companies that upgrade existing aircraft or buy fractional shares in airplanes.)

I spent a lot of time in the Warbirds section. I am interested in World War II history, and the aforementioned Mustangs were plentiful, along with trainers, cargo planes, and even bombers, with B-17s and B-25s lumbering overhead. There were even old jet fighters, although, of course, the federal government is working hard to eliminate vintage jets from air shows due to noise regulations.

I had seen my favorite World War II aircraft, the Chance Vought F4U Corsair, before today, but I'd never seen it fly before today. The Corsair is an enormous plane that appears to be an engine (initially of 1,850 horsepower) with (bent) wings at first blush. Walk up to one, and you realize how interesting taking off and landing one of these things must be when you can't see anything, including the runway, underneath you. That was why the Corsair, designed for aircraft-carrier operation, didn't see action on aircraft carriers initially. The Marines, however, took one look and decided that the Corsair suited their island-based fighter operations just fine.

The U.S. Navy determined that Corsair pilots shot down 11 Japanese opponents for every Corsair shot down. When you are a fighter pilot, it is a good thing for your plane to be called by your opponent "Whistling Death," as Corsairs were called by the Japanese.

All you have to do is look at those vintage planes to realize that their pilots and crew were made of sterner stuff than us 21st-century wimps. Creature comforts were nonexistent on the C-47, the military counterpart of the ubiquitous-at-the-time DC-3. The B-17 looked in the air as if a car could outrace it down a runway, and these were, remember, the targets of the best fighter pilots Nazi Germany had. Rides were offered in a slightly older plane, a Ford Tri-Motor; I saw that plane once on a windy day, and it looked as if it wasn't moving at all in the air. Rides also were offered on a Korean War-vintage Bell 47 helicopter, built in the days when it was perfectly natural for a helicopter to have all of its parts visible to all.

The only thing that bugs me about EAA is the fact that my exit to and from U.S. 41, the Wisconsin 44 exit, has been closed all week, and the alternate interchange, Ninth Avenue, is, to put it charitably, a mess. I'm not sure who's responsible for that (I'm guessing more law enforcement than EAA specifically), but it is somewhat aggravating. Yes, people who live in the Lambeau Field neighborhood are inconvenienced too on game days, but not for an entire week.

Nevertheless, the AirVenture is a huge benefit for this area. Even if you don't actually go to the show, the planes roaring overhead (or, in the case of Friday, rocketing overhead) are quite a visual and aural show by themselves.

Is something brewing at Fox Cities Stadium?

2008-07-31T07:00:00.003-05:00

Post~Crescent sports reporter Brad Christopherson drew some interesting conclusions when he reported that the Wisconsin Timber Rattlers are taking their own sweet time renewing their Player Development Contract with their parent organization, the Seattle Mariners.

The timing of this is interesting because, while the Rattlers’ contract with the Mariners expires after this season. the Milwaukee Brewers’ contract with their similar Class A affiliate, the West Virginia Power, also expires after this season.

The Brewers haven’t had a minor league affiliate in Wisconsin since 2004, when they severed relations with the Beloit Snappers. The Timber Rattlers have been affiliated with the Mariners since 1993, when they were known as the Appleton Foxes. Many major league teams have been affiliated with Appleton-area minor league teams. The 1940–53 Appleton Papermakers were linked with the Cleveland Indians, Philadelphia Phillies, St. Louis Browns (who became the Baltimore Orioles) and Milwaukee Braves. The Foxes, formed in 1958, affiliated with the Washington Senators (who became the Minnesota Twins), Chicago White Sox (for 26 years) and the Kansas City Royals before the Mariners.

A Brewers–Timber Rattlers agreement would be an ideal move for both the Timber Rattlers and the Brewers. The Brewers’ franchise is clearly on the upswing, having finally reached .500 in 2005 and finishing with a winning record in 2007, following 25 years that were analogous to the Packers’ “Gory Years,” with wins and playoff berths few and far between. The Brewers have gotten several awards for the quality of their minor league system this decade, and their home-grown players include first baseman Prince Fielder, second baseman Rickie Weeks, shortstop J.J. Hardy, third baseman Bill Hall, left fielder Ryan Braun, right fielder Corey Hart and starting pitchers Ben Sheets and Manny Parra. The Power, the Brewers’ minor league team at the same level as the Rattlers, is (are?) in first place in the Northern Division of the South Atlantic League.

The Timber Rattlers’ relationship with the Mariners has served the Rattlers well until recently. (I remember watching Alex Rodriguez have a poor night for the Foxes in Goodland Field’s and the Foxes’ final season in 1994. That was the season where Rodriguez did something probably unprecedented — he played in Class A and Class AA, then the Mariners, then was sent down to the Mariners’ Class AAA affiliate just before the 1994 players’ strike, all in the same season.) As of today, Wisconsin is 42–63, 11–28 in the second half of this season. The Rattlers played in the Midwest League championship series in 2005, but have not contended for a playoff berth since then, finishing 54–86 in 2006 and 53–85 in 2007.

That, of course, reflects the quality of players sent to the Timber Rattlers by the Mariners. One ranking placed the Brewers’ minor league system as fifth best in baseball, while the Mariners’ system ranked 19th. Minor League Baseball.com noted in 2007 that the Mariners’ drafts of North American players had produced “only a handful of major leaguers dating back to 2000.” Not surprisingly, the Mariners have gone downhill since they set the record for wins in a regular season with 116 in 2001, their last playoff season. The Mariners are on their second general manager and field manager of this season.

Of course, minor league baseball isn’t specifically about winning. An impressive list of major leaguers has played for Appleton or Wisconsin, including new Hall of Fame relief pitcher Rich “Goose” Gossage, Cy Young-winning starting pitchers Pete Vuckovich and LaMarr Hoyt, former Rookie of the Year Ron Kittle, Mariners starting pitcher Felix Hernandez (who is good enough to have his own bobblehead), Boston Red Sox designated hitter David Ortiz, and, of course, the player now known as “A-Rod.” Hall of Fame manager Earl Weaver, who managed the Orioles into four World Series, won the 1960 Midwest League title managing the Foxes, as did former Florida Marlins manager John Boles in 1983.

The 2007 Timber Rattlers drew 197,511 fans, 3,237 per game, eighth best in the Midwest League, and, more importantly, 59 percent of capacity. So far this season, the Rattlers are averaging about 2,500 fans per game, about 45 percent of capacity, though the franchise was hampered by our crappy spring.

Affiliating with the Brewers could result in an upswing in attendance from Brewers’ fans, on Brewers’ days off or on road trips, for those interested in seeing future Brewers, or for those looking for a less expensive Brewers baseball experience. Having a minor league affiliate two hours away would be quite handy for Brewers’ player personnel executives, too. (The Brewers’ three higher-level affiliates are in central Florida, Huntsville, Ala., and Nashville.) Next year’s Timber Rattlers could have players from the Brewers’ two rookie league teams, the Arizona Brewers and the Helena (Mont.) Brewers, plus leftovers from this year’s Power.

That also might result in some more media attention for the Timber Rattlers, whose games are broadcast on a Clintonville radio station and online and who get a “Rattler Report,” instead of a game story, in the Post~Crescent. (Perhaps Fox Sports Wisconsin might see fit to start covering Timber Rattler games; a few games are on Time Warner Cable now, but if you’re not a Time Warner subscriber, you can’t watch them.) Conversely, having an in-state minor league affiliate could help the Brewers’ statewide marketing efforts, which are in a catchup mode after having had no appreciable statewide marketing efforts before the Brewers’ current ownership took over.

The date to watch is Sept. 16, when major league teams can begin negotiating with minor league teams through Sept. 30. As Rattlers president Rob Zerjav told the Post~Crescent, “I think whenever we make a decision, it’s important that we look at what the fans want. They’re the ones buying the tickets. You want to give them what they want. So it’s one aspect of how we make the decision.”

“If the Brewers are looking at Appleton, I'd understand,” Andy Milovich, executive vice president of Palisades Baseball, the management company that runs the Power, told the Charleston (W.Va.) Gazette. “I don’t think the stadium there is as good as ours [an assertion unsupported by the online evidence — for one thing, Time Warner Cable Field at Fox Cities Stadium holds 1,000 more than Appalachian Power Park], but I’m sure there’s pressure from the local media and politicians to move [the Brewers] there.” (Pressure? Moi?)

From an outside perspective, there seem to be no negatives with a Brewers–Timber Rattlers affiliation deal. Let’s hope it happens.

Your tax dollars at work

2008-07-30T08:00:00.000-05:00

The National Taxpayers Union notes that the National Treasury Employees Union began a campaign, "Federal Employees, They Work for U.S.," which is "aimed at dispelling negative stereotypes and increasing the visibility of government work."

Perhaps the NTEU is referring to the negative stereotype of government employees being overpaid? The Cato Institute determined that federal employees were paid, on average, $100,178 in wages and benefits in 2004, vs. $51,876 for private-sector workers. The NTU also notes that one in 5,000 nondefense federal employees is fired for poor performance each year.

As the NTU puts it, the campaign "doesn’t reflect the reality that federal workers are paid extremely well to do the jobs they almost can’t lose. ... Since we pay them via taxes, they should get back to work and do their jobs efficiently, excellently, and with gratitude to the American taxpayer."

Analysis of the Day

2008-07-30T07:00:00.002-05:00

What if I told you that a prominent global political figure in recent months has proposed: abrogating key features of his government's contracts with energy companies; unilaterally renegotiating his country's international economic treaties; dramatically raising marginal tax rates on the "rich" to levels not seen in his country in three decades (which would make them among the highest in the world); and changing his country's social insurance system into explicit welfare by severing the link between taxes and benefits?

For one thing, "I" would be Stanford University Economics Prof. Michael J. Boskin writing in Tuesday's Wall Street Journal about Barack Obama's startling economic ignorance. For one thing, Obama's plans to increase taxes would result in, according to Boskin, a drop in after-tax return per dollar of earnings by 32.9 percent, and a drop in after-tax return per dollar of dividends by 30.6 percent.

As Boskin puts it: "History teaches us that high taxes and protectionism are not conducive to a thriving economy, the extreme case being the higher taxes and tariffs that deepened the Great Depression. While such a policy mix would be a real change, as philosophers remind us, change is not always progress."

Misery loves company

2008-07-29T07:00:00.001-05:00

The National Conference of State Legislatures reports that the number of states with budget problems is on the increase, due to what the NCSL calls "anemic revenue performance" (translation: we're not paying enough in taxes).

More than half the states are experiencing budget deficits, including, as we all know, Wisconsin. All but two Midwestern states, Indiana and Missouri, has a gap between revenues and expenditures. Three states, Illinois, Iowa and Minnesota, have budget gaps of 8 percent or more. Interestingly, all but one of those deficit-plagued states, Minnesota, has a Democratic governor, while Indiana's and Missouri's governors are Republicans. (Before you condemn this as a partisan slam, read on.)

Minnesota's governor is Republican Tim Pawlenty, who you may have read is apparently on John McCain's vice presidential short list (perhaps a list of one, in fact). This may not make conservatives happy, because Pawlenty's fiscal record as governor apparently leaves a lot to be desired — the National Taxpayers Union says his tax record "can rightly be described as a disaster for Minnesotans," complete with $1.74 billion in tax increases. Others, however, argue that Pawlenty "has reshaped Minnesota with fiscal restraint and the most taxpayer-friendly administration in the history of Minnesota," and that Pawlenty should not be blamed for vetoes that were overridden by "hostile liberal majorities."

The NCSL reports that few states (but not all, as we discovered Monday) are trying to close their budget gaps by "cutting spending and tapping reserves." This is laudable, if true. It would have been better, of course, for those states to have not increased spending that now needs cutting in the first place. Then again, the NCSL appears to like tax increases, given that they think that either federal gas tax needs an increase or a vehicle-miles-based tax needs to be enacted in an era of $4-per-gallon gas.

Wisconsin's current fiscal woes date back to the 1990s, when Republican Gov. Tommy Thompson decided that a booming economy meant the state could increase spending and cut some taxes. Thompson was clearly preferable to any of his opponents, but taxes and spending were and are too high in this state, and current experience demonstrates that just because you can afford high levels of government spending at a particular time doesn't mean you'll always be able to afford it. But most voters in Wisconsin apparently don't care about either taxes or spending, or they may say they care, but they don't vote like they care.

Analyses of the Day

2008-07-28T08:00:00.001-05:00

Both are from Friday's Wall Street Journal:

(1) Columnist Kimberly A. Strassel's Potomac Watch column reporting that congressional Democrats are threatening business groups with blatantly anti-business legislation in the next congressional session unless the business groups give them campaign contributions. (In the non-political world, this is called "extortion.") And it's not as if Democrats are being subtle about it:

[Senate Majority Leader Harry] Reid stepped up the pressure with last week's pow-wow. Democrats invited only presidents and CEOs of the most powerful trade groups, hoping to circumvent GOP lobbyists and take their message straight to the top. That message? According to one participant, the meeting was cordial, but the theme clear: "We have a narrow margin right now, and it is tough for us to get anything done. But there will be more of us next year, you'd better get used to it, and you better find a way to work with us."...

Based on this, anyone who tells you that Democrats are pro-business is lying. Eighth Congressional District residents should ask their congressman, who is running for reelection, about this. (And, by the way, what are his views on business anyway?)

(2) Columnist David Ranson of H.C. Wainwright Economics on people's view of the economy, as opposed to what the economy is actually like:

People tend to anthropomorphize the world around them, and not just in economics. We look at the outside world and assume that it is governed in the same way as our own lives. For example, we're mystified by Mother Nature's apparent heartlessness and large-scale disregard for what we cherish: order, justice and the sanctity of life. We still resist the notion that we can't dictate the course of the Mississippi, control the way the planet evolves, or equalize the distribution of income.
The same parochial streak in human nature is rife in economic commentary. In the context of a household or a business, debt is a burden and can become a threat. But for society as a whole, debt finance is a prime means of capitalizing production and growth.

It's extraordinary, then, that in national debate the narrow view drowns out the broad. Aggregate private debt and trade deficits are widely regarded with equal suspicion and fear — even by "experts." Instead of celebrating the role that private debt has played in creating prosperity, many blame "excessive" debt when things go wrong, and cite it as a basis for pessimism. ...
There's an old saying that if your neighbors are losing their jobs it's a recession; if you are losing yours it's a depression. It's therefore unfortunate that such a large fraction of prominent forecasters hails from the financial community. Their views are colored by the turmoil suffered in their industry. ...
We are not a nation of whiners, but we do have a lot of alarmists. It is becoming politically incorrect to suggest that the economy is basically sound.

Ranson borrows a metaphor from Franklin Roosevelt's first inaugural address: "What's excessive now is fear, not debt: Fears of insolvency and private-sector indebtedness are misplaced and harmful. They place obstacles in the way of ill-used capital that seeks to move toward safer and more profitable employment. They plunge the stock market into turbulence. They push government into hasty actions that intrude more aggressively into private choices and decisions. They undercut the market-price system, without which the economy cannot allocate resources productively. Last but not least, these fears trigger the proverbial false alarm in a crowded theater, sending everyone stampeding for the exits."

“Reform” and reform

2008-07-28T07:00:00.006-05:00

This is shaping up to be a somewhat dull election year in Wisconsin. There are no statewide races and only a couple of compelling open-seat legislative races, and at this point the only drama seems to be whether the Republicans can hang on to one house of the Legislature, or if the Democrats will control both the Assembly and the Senate.

That’s not the case with our neighbors to the north, Michigan. On Election Day Michigan voters will decide (assuming the referendum isn't thrown off the ballot in the court system) the fate of a constitutional referendum that would reduce the number, salaries and benefits of elected officials, legislators and judges, reconfigure the state’s judicial system, and change election law.

On the face of the proposal, this incredibly lengthy proposal includes many seemingly worthy initiatives. The Michigan Senate would lose 10 of its 38 senators, and the Michigan House would lose 28 of its 110 representatives. Two Supreme Court justice positions and seven Court of Appeals positions would be eliminated. Pay for Michigan’s governor, lieutenant governor, attorney general and secretary of state would be cut 25 percent, judicial pay would be cut by 15 percent, and pay for legislators would be cut by the 38 percent they voted for themselves in 2002. Elected officials would have to disclose their income and assets annually. The benefits of all elected officials would be reduced to the same that Michigan state employees get (which evidently are not as luxurious as the benefits of Wisconsin state employees). Elected officials would be banned from lobbying for two years. Redistricting of legislative districts would be taken out of the legislature’s hands to an independent commission.

This seems to be working with Michigan voters, 70 percent of whom favor the proposal, including 73 percent of Republican voters and 67 percent of Democratic voters, according to its sponsor, Reform Michigan Government Now.

Michigan voters clearly want something done because their state is, well, the Edsel (for younger readers: replace "Edsel" with "Yugo") of state economies. Michigan has lost 300,000 manufacturing jobs since 1999. Michigan was the only state to lose net jobs during 2007. The state's June unemployment rate was 8.5 percent (Wisconsin's was 4.9 percent), and a forecast earlier this year that Michigan's unemployment rate would hit 8.9 percent in 2009 now looks optimistic. Michigan also has one of the worst housing markets in the U.S., with, as of earlier this year, one out of every 20 mortgages either in or near foreclosure.

In such an environment, consider this: If you think Wisconsin elected officials are overpaid, consider that Michigan’s governor makes 30 percent more than Wisconsin’s, Michigan’s lieutenant governor makes 72 percent more than Wisconsin’s, Michigan legislators (who are full-time, and there are 16 more of them) make 68 percent more than Wisconsin’s (who are considered 60-percent full-time-equivalent), and Michigan’s Supreme Court makes 20 percent more than Wisconsin’s.

There is, however, a complication worthy of a potboiler novel. An intern for the Mackinac Center for Public Policy, a free-market think tank, discovered, on a United Auto Workers union Web site, a PowerPoint presentation, “Governmental Reform Proposal: Changing the rules of politics in Michigan to help Democrats.” (I think this intern has just assured himself lifetime political employment.) Reading the first few slides shows that the authors of the PowerPoint basically believe Michigan’s system is broken because it didn’t produce the results the authors wanted, and is likely to produce results the authors do not want: “Labor and tort ‘reform,’ erosion of civil rights and environmental protections, budget cuts, [and] privatization.”

The PowerPoint punchline is on page 11: “In 2008, use the public’s very negative mood and high level of discouragement about state government (the worst in 25 years) to enact a ballot proposal which comprehensively reforms state government, including changing the structural obstacles to Democratic control of state government in 2012–2021.” What follows is almost exactly the Reform Michigan Government Now proposal.

This part is unintentionally amusing: The estimated $4.911 million of the campaign is estimated at “less than half the cost of trying to beat an incumbent GOP Supreme Court Justice,” more than what is “spent every four years trying to win the House and Senate, usually unsuccessfully,” and less than half of the cost of a presidential-election-year “coordinated campaign.” If Michigan voters pass this, “it will reduce the cost and increase the prospects of winning the State Legislature every cycle.”

The point about the Supreme Court bears noting. Michigan's Supreme Court ranked dead last in a University of Chicago Law School study, based on "judicial independence from political or outside influences, its numbers of published opinions, and how often the court's decisions are referenced in rulings by other courts." The Public News Service noted that Michigan's Supreme Court "seems to be especially supportive of businesses, based on how it has split on many business-related decisions." (Wisconsin's Supreme Court ranked eighth in the University of Chicago study, and 24th in a U.S. Chamber of Commerce study, where Michigan ranked 33rd.)

Not surprisingly, the Mackinac Center opposes the proposal, having discerned that the PowerPoint "leaves little doubt that the Reform Michigan Government Now ballot initiative is a partisan power play. The most important features of the scheme are the redistricting commission and the removal of two Republicans from the Michigan Supreme Court. Nearly everything else in the proposal seems to be calculated to make the entire package more attractive to voters. ... While we have no objections to partisan politics as such, it is essential to call attention to partisan ploys that are presented as neutral good-government reforms."

The proposal's motives become more transparent when one notices that the proposal to reduce the size of Michigan's top two court levels is designed to weed out Republican judges. Then again, suddenly Michigan liberals have some hesitation about the proposal, one of whom is concerned that controversy over the proposal might actually affect the presidential race, as well as, interestingly, Michigan's Washington Democrats. Also noteworthy is that the PowerPoint author(s) mention the unpopularity of Michigan's Democratic governor, Jennifer Granholm, particularly after she got a tax increase passed one year ago, and yet also mention the lack of obvious Democratic successors for Granholm.

The final irony: Legal challenges have been raised to the vote (there is apparently a reference to a nonexistent part of Michigan's Constitution), which places Michigan’s judges in the strange position of having to decide whether a referendum that would reduce their own numbers and salaries is legal.

There is a more central issue here. It came to me when I was watching "All the King's Men," the Academy Award-winning 1949 movie based on the Pulitzer Prize-winning Robert Penn Warren novel about a Huey Long-like politician whose interest in reform metastasizes into an interest in driving the state's political machine. Reform is never successful if reform is centered around "who," as in whom to replace. Newt Gingrich engineered the Contract with America, which gave Democrats their worst congressional defeats in 50 years. Republican control of Congress lasted just 12 years, due in large part to Republicans' emulating most of the worst abuses of Democrats during their half-century controlling Congress.

Some would argue that voters shouldn't decide to reduce their representation. I don't buy that, particularly if the voters feel they're not being represented by their elected officials. (A friend of mine who has worked extensively in politics thinks Wisconsin should go to a one-house legislature, like Nebraska.) There are some good provisions, such as reducing pay and benefits of elected officials, and an independent redistricting body, as long as it was truly independent. But merely getting rid of the bums, whether by vote (the preferred route) or by term limits (which Michigan has, and which some commentators believe are part of the problem), won't change very much. Even though Michigan's elected officials are clearly overpaid, it's not who they are or how many there are, it's what they are or are not doing. An economy in recession, which Michigan obviously is, needs tax increases like flooded land needs a rainstorm. (The simile of 2008.)

As Mackinac Center president Lawrence Reed puts it, "Ask any resident what ails Michigan, and 'we have too many judges and legislators' probably wouldn't make anybody's top-50 list. Few people are foolish enough to think that simply reducing those numbers would transform Michigan. Most people would say our taxes need cutting, the bureaucracy needs trimming, the schools need mending, the business climate needs improving, or Detroit needs reforming. But RMGN does none of that, which makes it a huge distraction from fixing the state's fundamentals."

Reform is not about replacing one politician with another, or not replacing one politician; it's about replacing bad policies with good policies. That's the case in Michigan and in Wisconsin.

The former pride of Kenosha

2008-07-25T07:00:00.011-05:00

Hot Rod magazine, a publication for car enthusiasts, committed one of the great April Fool’s jokes in the history of magazine publishing when it breathlessly reported in its April issue that a group of private investors were working to bring back the late American Motors Corp. (The disclaimer at the beginning of the Web page didn’t appear until the last paragraph of the printed version.)

As with any successful practical joke, this one worked because of the appearance of plausibility. Given that the 2008 Ford Mustang looks like the 1967–68 Mustang, and given that Chrysler is resurrecting the Dodge Challenger and General Motors Corp. is bringing back the Chevrolet Camaro, is it possible that someone might want to resurrect the AMC Pacer (top photo) or, even better, the Javelin (right photo)?

AMC, created by the merger of the former Nash and Hudson brands, was the smallest member of the Big Four automakers, until Chrysler purchased it in 1987 to get the Jeep brand into the Chrysler fold. AMC first had a reputation for building compact cars, such as the Rambler, in an era in which compact cars were only sporadically popular. One of AMC’s presidents was Gerald Romney, a later governor of Michigan and Republican presidential candidate, and father of 2008 presidential candidate Mitt Romney.

Having much less capital than its bigger three competitors, AMC nonetheless built some cars that were ahead of their time, thanks in large part to the work of chief stylist Richard Teague. The company first took its sporty Javelin, chopped off the rear end, and created the two-seat AMX, a cult car among collectors today. A couple years later, AMC took its compact Hornet, similarly sliced off the rear end, and created the subcompact Gremlin (an unfortunate name for anything motorized), a car you could buy with a Levi’s interior. Whoever thought of adding four-wheel-drive to the compact Concord (born as the aforementioned Hornet 10 years earlier) created the Eagle (right photo), America’s first crossover sport utility (car with four-wheel-drive-truck-like capabilities), predating the Subaru Outback and other all-wheel-drive-equipped cars by 15 years. Then, in 1983, came the downsized Jeep Cherokee, the first compact sport utility. An AMC subsidiary, AM General, began work in the late 1970s on something the U.S. Army called the “High Mobility Multipurpose Wheeled Vehicle” — which, two owners and a marketing agreement with General Motors later, the world came to know as the Hummer.

Other AMC cars were not great cars, but at least they stood out on the street, such as the Marlin (which arguably looked better as the Tarpon show car, based on a smaller model than the Marlin ended up being), the Gremlin, and the final two-door (right photo) and four-door versions of the Matador. Like the Pacer, the Matador coupe was in a class of one, while the last four-door Matador was referred to as “coffin-nose.”

One unusual AMC niche was in police cars. Anyone who watched “Adam-12,” “The Rockford Files” or “The Dukes of Hazzard” (I plead guilty to all three — any series with cool cars got my attention) might remember that those series all featured Matador police cars. Many law enforcement agencies used Matadors because they probably were less expensive than their Big Three competition. (I once saw a sign in a National Guard armory that reminded everyone that all of their equipment was produced by the lowest bidder.) I don’t remember seeing Matador police cars in Wisconsin, but for several years in the early ’70s the Wisconsin State Patrol used Ambassador squad cars (this photo). So did a few sheriff’s departments, including Dane County, at least until a well-publicized spat between either AMC or the Madison AMC dealer and the sheriff over sheriff’s deputies’ habit of crashing said Ambassadors. (The dealership, from which we purchased a 1973 Javelin (read further), is still in business today, though it sells used cars now.)

There are conflicting schools of thought as to why AMC finally folded with its purchase by Chrysler. Patrick Foster, author of American Motors: The Last Independent, argues that AMC did fairly well in the 1960s, offering economical (for the day), sturdily built, stolid cars (similar to Mercedes-Benz in the day), until AMC management decided it needed to offer what the other members of the Big Four were offering — sporty cars (although the Javelin was quite successful in the Trans Am series) and big cars, products where AMC lacked the ability to compete with GM, Ford and Chrysler.

I maintain that the reason AMC doesn’t exist today as an independent manufacturer has to do with a decision the company made during the early 1970s to discontinue building its Javelin “pony car.” Chevrolet built many more Camaros and Ford built many more Mustangs than AMC built Javelins, but the Javelin and its AMX two-seat cousin developed a reputation as race cars whose performance exceeded their reputation. (My first car was my father’s brown 1973 Javelin, a cool-looking car from the front seats forward, with a back seat suitable only for dolls.) The last year of the Javelin was 1974, just before the pony car market exploded and General Motors sold as many Camaros and Pontiac Firebirds as they could build.

Instead of the Javelin (and the luxury Ambassador, killed at the same time), AMC built the Pacer (right photo), a car that was small in length, but wider and thus roomier (or so AMC wanted the consumer to believe) than the average small car. It was, however, heavy for its length due to big windows and slow yet fuel-inefficient even for that time, and, as the New York Times put it, it “looked like nothing else on the road,” a plus perhaps only in the minds of Wayne and Garth.

With AMC lacking money, 25 percent of AMC was sold to Renault (leading to the AMC Alliance and Fuego) before Chrysler purchased all of AMC in 1987. Chrysler closed the Kenosha manufacturing plant, originally built by Nash in 1902, in 1988. Chrysler’s Kenosha engine plant and General Motors’ Janesville plant are the only plants building cars in Wisconsin today, and the Janesville plant will be closing within the next two years. (My family must be a curse upon carmakers, since our family’s garage simultaneously housed a Kenosha-built Javelin and a Janesville-built Chevrolet Caprice. My parents also owned two of the last Oldsmobiles, and my father owned a Studebaker Hawk many years ago. Someone should warn Cadillac, Subaru and Honda of this.)

Given how things for the remaining Big Three automakers today, it’s hard to imagine how AMC could have made it to today had the sale to Chrysler not occurred. It is fun to contemplate, though, what could have happened had the “group of like-minded venture capitalists pooling billions of dollars to create the ultimate U.S. car company, and without the hindrance that comes with being a public company” been more than the figment of a creative writer’s imagination.

Hello muddah ... hello faddah ...*

2008-07-24T16:11:00.004-05:00

I know you're all wondering how my Cub Scout camp experience went.

First, I did pass the 100-yard swim test, for the second consecutive year. The fact that (1) I last swam 100 yards one year ago, as opposed to 25 years ago, helped, as did the fact that the water on Cedar Lake was at least 10 degrees warmer than last year. Second: There is no graceful way to get into or out of the top bunk of a bunk bed.

Our Ripon group bunked with a hilarious group from Neenah. (Think of Saturday Night Live's Da Superfans, some of whom are readers of Marketplace.) One of them concluded that the entire camp is a subterfuge — it's not a Cub Scout camp, it's Fat Farm for Dads, with 100-yard swims, paddleboating all over Cedar Lake, the climb up from the waterfront, etc. (I spoke to one of the wives of our group; she feigned ignorance.)

Based on this past week, I predict that within the next 20 years, there will be reports of an epidemic of genetic damage caused from large-scale use of bug sprays dating back to 2008 in Wisconsin. I went through almost an entire bottle of bug spray in less than three days. (Fortunately, my hair stylist, whom I saw Thursday, found no bugs, ticks, flies or other critters that don't belong in my hair.)

There was one moment that I found more profound than the rest of this appears. In conversation with a staffer (all the Camp Rokilio staffers are high school and college students, male and female), I mentioned that I was the bugler for my Boy Scout troop. I was about to mention that I was the least popular Scout in my troop when I blew "Reveille" every morning and "Taps" every night, when he interrupted, "You played the bugle? Can you still play?" When I said I did on occasion (actually, the trumpet, not the bugle), he asked if I would play "To the Colors" at the flag raising the following morning. He then got the camp's bugle, which I believe is older than I am, and appeared to have had previous close encounters with something larger and harder than the bugle, while having had no encounters at all with any kind of anti-tarnishing substance.

Having thus put myself on the hook, I practiced a few times Wednesday morning in the woods, hoping to reach the junction between practicing enough to remember the tune but not practicing too much to destroy my nonexistent chops. I got most of the notes, and, remembering my University of Wisconsin Band mantra that if you're going to fail, fail boldly, played sufficiently loud to scatter wildlife for at least five miles in every direction. (I play trumpet something like an old-style heating system: on — that is, really loud — or off.)

Afterward, I walked back to the Train Station group of Scouts, getting ... a round of applause. (It probably was applause for the fact that they didn't have to hear any more of my playing.) I also had several fathers, and many staffers, come up and thank me for playing. I had a couple staffers ask if I'd stay for the rest of the summer to play. (Let's see about that commute: Leave Ripon in the morning, get to Rokilio by 7:45, play, go to work, return to Rokilio by 5:45 to play, go home ...)

I didn't do this, and I'm not writing about this, to cover myself in glory, since my playing would have mortified the bugler version of me 30 years ago. (Note to self: Practice before next year.) I did it out of respect — respect for my country, respect for the Boy Scouts of America, and respect for Rokilio staffers who put up with a lot in dealing with seven- through nine-year-old boys for an entire summer. Something else came to mind too — you may have read that veterans groups and the military are having problems finding buglers to play "Taps" at veterans' funerals, some going so far as to play digital or otherwise recorded versions of "Taps." That's just wrong, although understandable given that there are, by one estimate, 500 buglers in the military, and 1,800 veterans who die every day. (Fortunately, a group is recruiting volunteer bugle players.)

One should show respect when one has the opportunity.

* If you don't know what this refers to, you must broaden your cultural education. Or click here.

Your 8 cents (per gallon) worth

2008-07-24T09:50:00.006-05:00

Today’s Milwaukee Journal Sentinel reports on a Wisconsin Policy Research Institute study that the state’s minimum markup law adds 8 cents to the price of a gallon of gasoline beyond a normal wholesale-to-retail profit margin.

Eight cents per gallon isn’t much. But $990 million is, and that’s what WPRI estimates the minimum markup law costs Wisconsin residents in gasoline prices — up to $278 million more than we would pay without the law. Since the minimum markup of either 6 percent on the wholesale price or 9.18 percent of the posted terminal price is a percentage, rather than a flat cents-per-gallon fee (as is the case with the 32.9-cent-per-gallon gasoline tax), the higher wholesale gas prices go, the higher the minimum markup is. (For example: In January 1998, when the wholesale gas price was 64 cents per gallon, the minimum markup was 5.9 cents per gallon. Earlier this month, when the wholesale price was $3.29 per gallon, the minimum markup was 30.2 cents.)

The rationale for the minimum markup law, to prevent predatory pricing by larger oil companies, doesn’t hold water, so to speak. The WPRI study cites 2003 research by the Federal Trade Commission:

“Economic studies, legal studies, and court decisions indicate that below-cost pricing that leads to monopoly occurs infrequently. Below-cost sales of motor fuel that lead to monopoly are especially unlikely. For these reasons, we believe Wisconsin’s Unfair Sales Act likely harms consumers and restricts competition. Moreover, at best, the Act is unnecessary because the federal antitrust laws already protect against predatory pricing.”

That rationale applies only if you believe that government should be in the business of telling businesses what to charge for their products. To believe this rationale requires belief in conspiracy capitalism, that these big evil (insert kind of company here) corporations are conspiring to squash their small competitors like a bug so they can stick it to the consumer and charge whatever they want. Note the line from the Federal Trade Commission: “Below-cost sales of motor fuel that lead to monopoly are especially unlikely.”

Service station owners will tell you that they don’t make much profit, even with the minimum markup law, on gasoline. The Journal Sentinel quotes Matt Hauser, president of the Wisconsin Petroleum Marketers and Convenience Store Association, as saying that service station owners are “lucky” to get 2 to 3 cents per gallon in profit.

I’m certain that Hauser is correct. I am also certain that that’s not the problem of consumers, including businesses whose livelihood depends on transporting products by land and are now charging more and/or enjoying less profit as a result of higher gas prices. It is also not an issue the government should be deciding, whether it’s gas prices, food prices (which also were subject to the minimum markup law before the 1980s) or the prices of anything else. If Megalomart decides to set its gas prices at whatever their costs are, so what? Is the next government step, as the Wisconsin State Journal wrote in 2001, “more laws to protect Joe’s Hamburger Stand from lower hamburger prices at McDonald’s, or to shield Ann’s Hardware Store from cheaper tool prices at Wal-Mart”?

WPRI calls the minimum markup law “one of the most overt examples of select businesses reaping the benefits of government-mandated profits at the expense of the consumer. …Aside from the additional cost of fuel to the consumer, high gas prices seep into the price of all goods and services transported throughout the state. When it costs more to truck candy bars to a grocery store, that price will be reflected in the cost of those candy bars. As a result, Wisconsin consumers end up not only paying higher prices at the pump, but they end up paying ancillary costs hidden within goods and services they need.”

Government interferes enough in the free market as it is without also telling companies what they must charge for gasoline, tobacco and alcohol, or to try to pick winners and losers (small = good, big = bad). The Minimum Markup Law, like a lot of legislation passed during the Great Depression, was a bad idea then and is an outmoded law now.

Taxes, businesses, taxes, government and taxes

2008-07-24T07:00:00.002-05:00

Time was when political campaigns wouldn’t start in earnest until Labor Day, when the attention of the electorate was assumed to have diverted from vacation to more serious subjects.

Campaigns started earlier in Wisconsin because we have a primary election shortly after Labor Day. But thanks to the 24/7 news cycle and the Internet, any campaign can start as soon as the filing deadline.

Jo Egelhoff, former Appleton alderman who is running for the 57th Assembly District seat being vacated by Rep. Steve Wieckert (R–Appleton), talked in The Post~Crescent about what the state needs to do to attract more jobs, essentially: “1) reducing our horrific budget deficit and 2) creating a positive tax climate for employers and employees alike.”

Egelhoff pointed out, correctly, that the fact that Wisconsin has slipped out of the top 10 taxed states list is not because of any focus on governmental economy in Madison, but because some states raised their taxes beyond Wisconsin’s, and others have collected more tax revenues because of oil price increases. Egelhoff favors creating a small business tax credit program “to encourage risk-taking and growth” for companies in their first two years of operation.

Reading the online responses to Egelhoff’s commentary proves that there is a great deal of misunderstanding about how business and taxes work among the electorate. Cutting “wasteful spending” is assumed to mean “spending towards helping people, and not corporations.” At least one person does grasp what we all know, that “consumers should understand that taxes to corporations are simply added to their product price and we reimburse them at the cash register.” (The complete answer, of course, is that every dollar a business is taxed is a dollar that won’t go to the business’ owners or to the business’ employees or back into the business.)

There was a longer assertion about how Egelhoff “utterly fails to see the connection between education and taxes. Folks, if we want to have a first-rate educational system, we have to pay for it. … We don't want to cut their funding because they produce the educated workforce that Ms. Egelhoff touts in her article. In fact, we need to increase their funding just to keep up with inflation. If we make low taxes an important part of our program to attract business, we will join a race to the bottom. We will cut and cut and cut our public services until we become just another Third World country, and we will still fail because, on that basis, we cannot compete with China, Brazil or Thailand.”

“Race to the bottom” is a favorite phrase of those who believe we don’t spend enough money on government now, and, by extension, that we are insufficiently taxed. My first suggestion is that those people who really believe we should be taxed higher should in fact send more money to the government.

But what exactly is enough in taxes and spending? Wisconsin is in the top fourth of states in education spending and, at $6,157 per student, we spend 5 percent more per student than the next-highest-spending state in the Midwest, Minnesota, and 8½ percent more than the national average. In this past school year, per-pupil spending increased 4.2 percent, and total school costs increased 3 percent, according to the Wisconsin Taxpayers Alliance. This is, incidentally, despite the fact that enrollment has dropped in Wisconsin for the past four consecutive school years. (Perhaps the fact that teacher and administrator employee benefits are 52.5 percent more than the national average has something to do with it.)

Moreover (and, as a reminder, none of this necessarily represents or reflects Egelhoff’s positions) is our educational system really first-rate? When teachers are paid according to years of experience and educational level instead of quality, the answer is clearly no. When the only way to get rid of a teacher is either for that teacher to commit gross misconduct, or for the school district to engage in job-cut maneuvering or wait out that teacher’s retirement, none of those are signs of a first-rate educational system. When the only way to reward a teacher for superior performance is to raise the pay of all teachers of similar experience and educational level — that is, when individual teachers are not able to negotiate their own salaries — that is not a sign of a first-rate educational system either.

(For those who think the previous paragraph is an exercise in teacher-bashing, it is not, but consider: Reality says that 75 to 80 percent of school district budgets are for personnel costs. Reality also says that schools are the largest part of your property tax bill. Do the math.)

The assertion a few paragraphs ago refers to the importance of our “educated workforce.” The importance of an educated population, not just workforce, is self-evident. However, note the CNBC.com survey of state business climates I wrote about earlier this month, which (A) places Wisconsin at 37th overall, (B) ranks Wisconsin 47th in “workforce” (defined as the numbers of available workers and their average education level, unionization level, and the job placement success rates of state worker training programs), and (C) ranks education as fourth most important for businesses, with “cost of doing business” number one.

Profitable businesses (1) provide their customers with useful products and services, (2) pay employees and (3) pay their owners. Many businesses also make contributions out of their profits, at the discretion of management, to their communities that go beyond those three points. That is how “private enterprise” contributes to the “public welfare.” (And besides that, every corporate employee who earns a salary, including that high-paid management, pays taxes anyway. Corporate income taxation is really triple taxation — employees pay taxes on their income, shareholders pay taxes on their dividends and their capital gains, and the corporation pays income taxes — except that the corporate tax is hidden in the prices of products and services.)

If corporate taxes were reduced to zero, there would be no need for Egelhoff’s proposed small business tax credit, or any other business-oriented tax credits, and no lobbying legislators for tax breaks. There would also be no need for the accountants larger businesses use to avoid taxes. (Appropriately, I might add; a corporation's fiduciary responsibility to its shareholders is to maximize profits, and taxes eat profits.) Corporate revenues and profits would then go to the proper places, which, once again, are (1) the business, (2) employee pay, and (3) shareholders.

Based on how too many people in Wisconsin vote, there is one place schools seem to be particularly deficient — economic education.

Analysis of the Day

2008-07-23T07:00:00.001-05:00

The Economist on "Which way will capital vote?", which demonstrates that business owners (who comprise 10.7 percent of eligible voters, by the way) "cannot be ignored, and they have doubts about both candidates." The punch line:

With less than four months to the election, many businesspeople are undecided. A recent poll of small-business owners found that 80% had little idea what either candidate might do for them. Dave Bromberg, a grocer in Albuquerque, says he likes both of them. He thinks Mr McCain is tough on waste but Mr Obama would have trouble standing up to a free-spending Democratic Congress. “Democrats feel sorry for everybody,” he says. “McCain will probably say, hey, we’re all responsible for ourselves, and [the government] will help you a little bit, but only a little.”

“Global” warming?

2008-07-22T07:00:00.002-05:00

There is a consensus, according to the Al Gore crowd, that man-made global warming is occurring. Those more skeptical would argue that, while global warming may be occurring, humans aren’t contributing significantly to global warming — that global warming is being caused by natural processes, including activity on the surface of the

But go back to the first half of that last sentence. What if global warming isn’t occurring at all?

GlobalWarming.org first notes that the average temperature in 1979 and the average temperature in June 2008 is the same. This graph shows that temperatures have generally ranged from 0.5 degrees cooler than normal to 0.6 degrees warmer than normal in the past 19 years, with notable cooling around the eruption of the Mount Pinatubo volcano in late 1992 and notable warming during an El Niño event in early 1998.

The next map, from NASA, shows the change in surface temperatures in 2007 and 2008 compared with average surface temperatures between 1995 and 2000. The blues on the map show cooling, and the yellows and oranges show warming.

Note that the northern U.S. and Canada have cooled, while the southern U.S. is warmer. Note also that the northern and central Atlantic Ocean and northern and southeastern Pacific Ocean have cooled, but the rest of the Pacific, along with the Indian Ocean have cooled.

Not convinced? OK, let’s compare 2000 to 2008 against 1900 to 2000. Note that the U.S. from the Plains east has warmed some, but not from the Plains west. The southern half of South America and northern Europe have cooled, while the southwestern half of Europe and eastern Asia have warmed. The Arctic has warmed, while the Antarctic has both warmed and cooled. The Atlantic and southeastern Pacific oceans have warmed, but not the western Pacific. (Click here to comparisons of your own using a variety of variables.)

This isn’t proof of global warming. It may be proof of warming within regions of the globe, but it may also be proof of cooling within other regions of the globe. That suggests that solutions to global warming are solutions to what is not a global problem, and may actually have negative effects in some parts of the planet. (Free market solutions are better anyway.)

It’s interesting to note that the global warming true believers not only entertain no doubt about their belief in global warming, but they actively attack the more skeptical. Heidi Cullen, host of “Forecast Earth” on The Weather Channel, has gone so far as to advocate that meteorologists who dare question global warming have their American Meteorological Society certifications revoked. Apparently science is no longer interested in testing theories.

Be(ing) Prepared

2008-07-21T07:00:00.003-05:00

Like this column, this isn’t Friday either, but think of it as a Friday posting.

For the first part of this week, I won’t be in the office. I’ll be at the Boy Scouts of America Bay–Lakes Council’s Camp Rokilio, a Cub Scout camp, with my oldest son and the members of Cub Scout Pack 3735 of Ripon, away from cellphones, the Internet, email and my car.

This is the second consecutive year we’ve done this. Michael said last year he wanted to come back to Rokilio before we left Rokilio one year ago, so we were the first to sign up this year. Camp Rokilio, near Kiel, is something else, with six theme buildings — a fort, a gold mining village, a Viking ship (given my Norwegian heritage, I should lobby for this one), a space station (where we stayed last year), a castle, and a train station (where we’re staying this year). Assuming I survive the 100-yard swimming test (it nearly killed me last year — probably due to the effects of one of my damnable sinus infections and the fact I hadn’t swum 100 yards in approximately 25 years — even though I passed), there will be swimming, attempts to drown each other in paddleboats, archery and BB gun shooting, activities tied to, in our case, trains, and father-and-son time in the outdoors, rain, humidity and mosquitoes or not. That also includes my being the master of ceremonies for the Tuesday night campfire one night before departure, which is not an easy task. (You try coming up with jokes that entertain eight-year-olds and their fathers.)

This is all sort of a flashback for me, even though Cub Scout camps didn’t exist in my Cub Scout days. I moved on from Cub Scouts to Boy Scout Troop 67 in Madison for five years, and became one of the estimated 2 percent of Scouts to earn the Eagle Scout Award. That places me in the same camp with President Gerald Ford, H. Ross Perot, Steven Spielberg (who helped develop the requirements for the Cinematography merit badge), Sam Walton, several U.S. senators (that used to be something to brag about) and 33 astronauts. And, as someone suggested I do many years ago, I have it on my résumé, even 27 years after the fact.

One of the larger honors I’ve received was to speak at the Eagle Scout ceremony of a member of my church. The ceremony occurred 25 years after I got my Eagle Scout award, and, in a great example of calendar circumstance, 30 years to the day I left for my first full-fledged overnight campout, at the Kettle Moraine State Forest Northern Unit near Plymouth.

As I told the Scouts two years ago, that first campout was something I survived, rather than enjoyed. Being in August, it was hot and humid, and hiking with a fully packed pack is hard work. I was homesick despite the fact I had been away from home before then and my time away from home for the campout totaled less than 48 hours. I was thoroughly intimidated by the entire experience, and I didn’t fit in since I was a new Scout. My father picked me up, and I had planned to tell him that I’d had a terrible time and wanted to quit. What prevented that was another Scout, someone I didn’t even know, who needed a ride back to Madison. I wasn’t about to unburden myself to my father in front of a complete stranger, so I decided not to say anything until I got back home. And when I got back home, I didn’t get around to saying I wanted to quit.

Perseverance isn’t one of the Scout laws (they are, and I’m typing this without consulting the Internet: A Scout is: Trustworthy, Loyal, Helpful, Friendly, Courteous, Kind, Obedient, Cheerful, Thrifty, Brave, Clean and Reverent), but perhaps it should be, since, as adults find out, much of life is simply sticking it out. Perseverance is also a key to getting an Eagle Scout Award, since, when you’re 10 or 11 years old as a new Scout, that Eagle Scout Award is a long way off. As with any major accomplishment — say, getting an MBA degree, or winning the Super Bowl, or, as I did while I was in Scouting, hiking in the Rocky Mountains at the Philmont Scout Ranch in New Mexico — the accomplishment really isn’t about achieving the accomplishment, but in doing what it takes to earn that accomplishment.

(And speaking of accomplishment, a design accomplishment occurred with whoever designed my backpack. My parents bought it for me in the spring of 1976, and it went on every campout of mine in Boy Scout days, including the aforementioned New Mexico trip. I'm using that same backpack this week, 32 years after I got it.)

Boy Scouts are usually middle-school boys. That is a group that desperately needs role models, regardless of the kind of home they come from. I certainly didn’t come from a bad home — my parents have been married for 47 years, and other than sibling rivalry, there were no pathologies at home — and yet Scouting was important for me because Scout leaders, most of whom were the fathers of other Scouts, showed me that what my parents were talking about — do your work and do it well, be trustworthy, go to church, and so on — wasn’t just something my parents cooked up to make my life difficult; they lived the lives mature adults should live. That is a message that can’t be repeated enough not just to Scouts, but to middle and high school students, boys or girls.

Scouting seems to have become less popular over the years, although it wasn’t necessarily popular, at least among my age group. Scouting, of course, teaches values that are timeless, even if those values aren’t trendy or “in.” It’s not cool to be a Scout, and it’s not cool to live your life as a Scout; it’s just the right thing to do. Society, including business, should be encouraging organizations that encourage being trustworthy, loyal, helpful, friendly, courteous, kind, obedient, cheerful, thrifty, brave, clean and reverent. (That’s all I’ll say about the question of whether United Way funding should extend to the Boy Scouts, who refuse to allow homosexual men to be leaders.) I can’t think of a business that wouldn’t welcome an employee who lived his or her life according to those 12 tenets. This country doesn’t need more celebrities; it needs more people who try to live their lives according to those 12 parts of the Scout Law.

I told the Scouts — and who knows if the words connected — that the fact I was able to recite the Scout Law and most of the Scout Oath that day probably demonstrates that my Scouting experience did have an impact on me that extends to today, even if I don’t consciously asked myself every morning what good turn I’m going to do that day. I think the Scout Oath, which begins "On my honor I promise to do my best," and the Scout Law are a pathway to becoming someone who puts more into society than he takes out, regardless of how famous or wealthy or powerful someone is or is not, wherever someone is and whatever someone does.

Analysis of the Day

2008-07-18T14:38:00.003-05:00

The New York Times’ David Brooks on what kind of change voters really want, and which presidential candidate is best equipped for it. Brooks claims that the terms “reform” and “conservative” can be synonymous, as typified by Theodore Roosevelt and British prime minister Benjamin Disraeli. The punch line:

[Roosevelt’s] formula was like Disraeli’s: political innovation to restore traditional national morality. He had an image of an American hero — thrifty, hard-working, vigorous and righteous — and sought to create a Square Deal for that sort of person. “The true function of the state as it interferes in social life,” Roosevelt wrote, “should be to make the chances of competition more even, not to abolish them.”

John McCain’s challenge is to recreate this model. He will never get as many cheers in Germany as Barack Obama, but for a century his family has embodied American heroism. He will never seem as young and forward-leaning as his opponent, but he did have his values formed in an age that people now look back to with respect.

The high point of his campaign, so far, has been his energy policy, which is comprehensive and bold, but does not try to turn us into a nation of bicyclists. It does not view America’s energy-intense economy as a sign of sinfulness.

If McCain is going to win this election, it will because he can communicate an essential truth — that people in a great and successful nation do not want change for its own sake. But they do realize that it’s only through careful reform that they can preserve what they and their ancestors have so laboriously built.

Down on the farm

2008-07-18T08:00:00.001-05:00

There’s something ironic about a farming and agribusiness expo being shortened because of something farmers deal with all the time — bad weather.

It’s a good thing I went to Farm Technology Days in southeastern Brown County Tuesday. Wednesday afternoon, the expo grounds were evacuated because of severe weather moving into the area, and the severe weather left more than two inches of rain, forcing the expo’s last day to be canceled.

Farm Technology Days is an interesting look into all the iterations of agriculture and agribusiness throughout the state. The list of exhibitors in an entire city of tents ran from A (A–A Exhibitors) to Z (Ziegler Ag Equipment). Farm equipment I don't recognize (my wife, the farmer's daughter, could have, but she wasn't there) mingled with everything from small lawn tractors to giant all-wheel-drive articulated tractors as tall as my house, along with pickup trucks, medium- and heavy-duty trucks, tractor–trailers, and even enormous semi-based recreational vehicles. I didn't get to participate in the various demonstrator opportunities, for driving tractors, lawn equipment, skid steer loaders, and so on. (I was wondering how I could get a John Deere representative to bring the high-feature lawn tractors to my house, which needs mowing.)

Your tax dollars were represented too. Five different agencies of the U.S. Department of Agriculture were there. Twelve representatives of the University of Wisconsin System were present. The state Department of Agriculture, Trade and Consumer Protection, and the Department of Natural Resources, and the Division of Public Health were all there too.

I've gone to two Farm Technology Days back when it was called Farm Progress Days. My grandfather, who sold farm implements (he had the previously mentioned station wagons stuffed to the roof with farm equipment catalogs), probably attended almost all of them from when the expo began in the 1950s until around his death in 1994. I've become more interested in agriculture over the years for two reasons — first chronologically, because I started working at a small-town newspaper out of college, so I got an education into farming, and even the byzantine way that milk prices are set. Then, I married into a farm family, so I got an even better education in farming from my late father-in-law and my brother-in-law.

(After living in rural areas for a few years, I was able to distinguish between the different sources of manure as I drove past a farm. Cow is the most common, but there are other sources; the worst is slurry, which comes out of the ironically named "honey wagon" after fermenting in tanks for the appropriate amount of time. My father-in-law called that, seemingly pungent enough to asphyxiate birds flying in the air, "the smell of money.")

Farms are where Wisconsin's vaunted work ethic began. Farming is an every-day activity, with no days off unless you can arrange for someone to do the daily work. (Dairy cows will react badly to your leaving them at 5 Friday afternoon and returning at 8 Monday morning expecting them to deliver milk immediately.) The former owner of the former fire truck builder 3-D Manufacturing in Shawano once told me he loved to hire farmers for his plant because they all worked hard and were mechanically inclined, because they had to be.

Farming is also about as tough a business as there is. You may notice that there are a lot of bare (and, if the weather forecasts for the weekend are to be believed, about-to-be-inundated) spots in farm fields this wet summer. Those non-planted areas generate expense, but no income. Think of this conundrum: If a farmer has a bad year for crops, the farmer gets little money. If a farmer has a good year for crops, the farmer may get little money if everyone else also has a good year for crops. It must be a bit unnerving for a farmer to borrow money to be able to plant crops and then hope he has enough money from selling crops to pay off the season-opening loan.

Farm products are an economic area where Wisconsin shines, and generally without the subsidies farmers in other areas of the country receive. (Farm subsidies, by the way, lead to what the federal government considers "excess capacity," leading to the government's paying farmers not to grow. The way to eliminate the "excess capacity" is to eliminate the subsidies, according to the Cato Institute's James Bovard.) Wisconsin doesn't just export food, but food processing machinery as well. This is why everyone in Wisconsin should favor free trade, because it benefits Wisconsin.

Farm Technology Days is, if nothing else, a reminder of how important agriculture is to Wisconsin’s economy. (Interesting facts about Wisconsin farming can be found here.) Any trip to a small town should be a reminder of that — implement dealers, seed and feed stores, car dealers that sell more pickup trucks than cars, food processing plants, and even farm equipment manufacturers — but those of us who live in larger areas of Wisconsin and perhaps never pay attention to what's outside our car windows when we leave those areas should pay more attention to our more rural areas. (One interesting statistic: The dairy industry contributes about $20 billion to Wisconsin's economy each year. Oranges contribute only $9 billion to Florida's economy, and potatoes contribute only $2.5 billion to Idaho's economy.)

The converse of the farming-ignorant is those who believe that farms are so sacred that they want nothing non-farm-related done to them. This poses problems given that many people in this state now live in, or on, what formerly was a farm field of some sort, the result of population growth and the reality that more food production can take place on less farmland today. The fact is that, bucolic as they may look, farms are factories, where production of crops and cattle take place. They may be more picturesque than your typical smokestack-equipped factory, but they are places of manufacturing, not something that exists for your pleasant view.

Think about that the next time you drive past a farm ... or try to decide on a beverage with your lunch.

My favorite fundraiser

2008-07-17T08:00:00.000-05:00

Want to drive really cool cars and help the cause of breast cancer at the same time?

And well you should. Saturday is my favorite fundraiser (perhaps I should say fundraiser), the BMW Ultimate Drive benefiting Susan Komen for the Cure, a breast cancer research foundation. The BMW Ultimate Drive has raised more than $11 million since it began in 1997.

For gearheads, this is too good to be true. Test-drive a BMW at Enterprise Motorcars in Appleton between noon and 5 p.m., and BMW makes a $1 donation for every mile of the test drive.

Women know why this is important. In 2007, according to the American Cancer Society, an estimated 240,000 new cases of breast cancer were diagnosed in the U.S. — the number one cancer among women — and about 40,000 women died of breast cancer. Only lung cancer is a bigger cause of cancer deaths among women.

For men, it shouldn't take too much time to figure out why this is important. Every male reader of Marketplace has or had a mother. Most have wives. Some have sisters. Some have daughters. Most have female coworkers or neighbors or friends.

I mentioned before that breast cancer was estimated to kill 40,000 U.S. women last year. But according to the National Cancer Institute, as of January 2004 2.4 million women with breast cancer were alive — they were either being treated for cancer or had reached the magic five-year mark after diagnosis.

I know one of those people. My mother was diagnosed with breast cancer 20 years ago. She had none of the major risk factors — she had no family history, she wasn't overweight, she didn't smoke, and she didn't drink heavily. (Interestingly, she was one of three women on the block of Madison where I grew up to get breast cancer.) Her case of breast cancer was advanced enough, with lymph node involvement, that she was given a 22-percent chance of surviving five years. The chemotherapy also made her too sick to finish the full course of chemotherapy.

Fortunately, she has survived to see her children graduate from college, her son get married, the birth of her grandchildren, and retirement. Also fortunately, treatment is more effective, with fewer side-effects, than it was even 20 years ago.

The Ultimate Drive is quite a bargain — drive cool cars, and raise money toward a cure for breast cancer. Click here to register.

Happy (?) Cost of Government Day

2008-07-17T07:00:00.000-05:00

Back in April, we commemorated Tax Freedom Day, the day in which your wages finally matched your taxes.

Today, nearly three months later, is Cost of Government Day, as noted by Americans for Tax Reform and by Citizens Against Government Waste — the day our earnings finally match federal, state and local government spending. The national-average Cost of Government Day was Wednesday, but, of course, because Wisconsin has more government spending than most states, our Cost of Government Day is a day later, today, 37th latest among the states.

(Number 37 … why does that sound familiar? … oh, yes. Our state also ranks 37th in business climate, according to CNBC.com. I wonder if they’re related.)

The first point to ponder: We pay one-third of our income in taxes, but government costs total more than half of our income. ATR terms “government costs” as not just government spending, but also costs tied to regulations (which cost $1.16 trillion in 2007, according to the Competitive Enterprise Institute, or an estimated 62.6 days of work, according to ATR). That is what a budget deficit looks like.

That deficit is not caused by insufficient taxation (ATR notes that the federal budget deficit dropped from 3.6 percent of Gross Domestic Product to 1.2 percent of GDP between 2004 and 2007); it’s caused by excess spending. ATR estimates that, had federal spending been tied to the rate of personal income growth, the deficit would have been entirely eliminated by 2006.

“This type of wasteful spending takes money away from real national priorities and contributes to the inefficiencies of government,” said Tom Schatz, president of Citizens Against Government Waste, whose 2008 Pig Book chronicles 11,610 porky projects — defined as “a line-item in an appropriations bill that designates tax dollars for a specific purpose in circumvention of established budgetary procedures — totaling $17.2 billion. Wisconsin’s contribution totals $174.8 million, 1.02 percent of the total, interesting given that Wisconsin has 1.83 percent of the U.S. population. Even in pork, we’re poorly represented in Washington. (The contributions of U.S. Reps. Steve Kagen (D–Appleton), $23.79 million, and Tom Petri (R–Fond du Lac), almost $13 million, can be found by searching here.)

Some readers may think this is either bad methodology (it’s the same methodology the Tax Foundation uses to compute Tax Freedom Day — divide total taxes or spending by total income) or that such rankings don’t really matter. It really does matter, if for only this reason — the fact that Wisconsin is losing high-income residents to states with lower tax burdens.

The source for this assertion is ATR’s study of people moving from state to state and the income they take with them. ATR claims that “Several empirical studies have documented the surge of taxpayers moving from high tax to low tax states over the past 15 years. Indeed, these studies show that taxes are the single largest factor in interstate migration, rather than such factors as weather, employment, family relocation, etc.”

ATR reports that between 1996 and 2006, the 10 highest taxed states lost 2.4 million residents and $69.51 billion in income from people leaving for states not part of that top 10 list. Conversely, the 10 lowest taxed states gained 1.4 million residents from other states not part of that bottom 10 list, with real income gain of $30.5 billion over that decade. Between 2004 and 2006, the nine states that don’t have an income tax gained more than 1 million residents from the other 41 states, bringing with them $37.3 billion in income, according to ATR and the Internal Revenue Service.

Part of this is one of the more unpleasant, but less noticed, changes in Wisconsin’s economy over the past 15 years — the departure of corporate headquarters from Wisconsin, which, you’ll recall, began with the well publicized move of Kimberly–Clark Corp.’s corporate offices from Wisconsin to Texas. (More on that in the near future.) People who work at corporate headquarters make higher-than-average incomes and thus pay higher-than-average income taxes. Corporations make location decisions based on not just business-related taxes, but on personal taxes as well.

ATR's answer is for the 41 states that have income taxes (beginning with Wisconsin, where the income tax began) to phase them out. (I'll pause while you pick your jaw up off the floor after contemplating this state without an income tax.) ATR proposes a combination of states' increasing their sales taxes by 2 or 2.5 percentage points (taking the sales tax up to 7 to 7.5 percent in Wisconsin, plus 0.5 percent in those (misguided) counties with sales taxes) combined with strict budget growth controls of either the increase in state income minus 1 percentage point or the sum of a state's population growth and inflation.

That previous paragraph is a conservative fantasy in this state, of course. Property, income and sales taxes have roughly equal portions of tax collections in this state. Eliminating one would force the state to increase rates so that collections of the other two increased by one-sixth each to make up the difference. Moreover, in an era of growing Internet sales, perhaps the sales tax is an outmoded way to collect tax revenue. Given that property taxes receive the most complaints from state taxpayers, tax changes to increase property taxes substantially would make that option, to say the least, unpalatable to most state legislators. And, as I've argued in this space before, actually cutting taxes and spending is contrary to our state's political culture, including that of the party that is supposed to be about cutting taxes and spending. (Which party was in power in the Legislature when the Taxpayer Bill of Rights referendum proposal died?)

Then again, cutting taxes and government spending seems increasingly a conservative fantasy. As I wrote on Tax Freedom Day, those who want to cut taxes and government spending in Wisconsin have to fight our ancestry and history, plus 2,292 units of government, plus organizations that believe that your taxes aren't high enough. On that cheery note, Happy Cost of Government Day.

I look outside my office window, and I see …

2008-07-16T14:29:00.007-05:00

… rotating clouds. (Photos by our Erica Dakins.) Things are starting to look suspiciously similar to June 12, when, you’ll recall, some areas received a couple of months of rain in one afternoon.

Thursday 11:45 a.m. update: A Flash Flood Watch is now in effect for Brown, Calumet, Kewaunee, Manitowoc, Outagamie, Shawano, Waupaca, Waushara and Winnebago counties through Friday morning, and for Fond du Lac, Green Lake, Marquette and Sheboygan counties through Saturday evening. The quote from the latter warning: “Another very dangerous flooding situation may be developing for southern Wisconsin. It has many similarities to the weather pattern and subsequent flooding experienced back in early June.”

Another advisory has this news: “Several inches of rain are likely in some areas by Sunday night.”

Analyses of the Day

2008-07-16T07:00:00.002-05:00

Both are from Forbes:

(1) You'll recall that U.S. Rep. Steve Kagen (D–Appleton) got the House to pass a bill to sue OPEC over high gas prices. JPMorgan Private Bank chief economist Michael Cembalest, writing at Forbes.com, suggests that Congress should not sue OPEC, but ... Congress:

Over the last 30 years, elected U.S. officials blocked nuclear build-out and spent fuel storage construction; impeded the construction of oil refineries; refrained from passing meaningful alternative energy legislation; imposed an import tax on cheaper Brazilian ethanol; prevented offshore drilling in Alaska, California and Florida; delayed tighter auto fuel-efficiency standards for 30 years; blocked the construction of liquefied natural gas ports; killed wind farms in their own backyards (and back bays); and neglected opportunities for public-private sector partnerships on energy research and development.

Cembalest, by the way, believes that the peak of high oil prices is in sight: "Oil prices will likely approach a breaking point of some kind later this year. Yes, the supply-demand equation is tight (U.S. reserves per well are half the levels they were a decade ago), and marginal costs are going up (more costly horizontal and directional drilling now account for 40% of wells drilled). Even so, marginal costs are $70 a barrel, not $140, and Organization for Economic Cooperation and Development demand is being destroyed at a rapid clip."

(2) RealClearMarkets' John Tamny believes the federal government should allow General Motors Corp. to collapse. I'm not sure I buy that, but Tamny makes a fascinating point about how GM advocated for the wrong dollar policy:

The Big Three have routinely agitated for a weaker dollar against the yen. In a 2005 op-ed in The Wall Street Journal, GM Chief Executive Rick Wagoner cast some of the blame for the company's poor performance on "unfair trading practices," in particular, "Japan's long-term initiatives to artificially weaken the yen."

Wagoner's thoughts were remarkable in a number of ways, but were notable because his comments about yen weakness were so impressively untrue. In reality, as recently as 1971, the dollar bought 360 yen. Today, it buys 107 — a gain for the yen vs. the dollar of 236%!... Despite the dollar's collapse, GM's U.S. market share has continued to wither, falling from 41% in 1985 to less than 25% today. Over that same timeframe, GM shares have flatlined, while those of Honda and Toyota have risen over 600% and 800%, respectively.
What's fascinating is that GM's management could be so obtuse about what aids its success. The obvious truth here is that, with GM a successful producer of large, gas-guzzling autos, a weak dollar has and always will be a killer for a shrunken unit of account, driving up not only the costs of commodity inputs for automobile production but also, more importantly, the price of oil itself. Not surprisingly, GM's shares rose 56% from June 1997 to May 2000 — when the dollar was strongest and oil was cheap.

We're number 37!

2008-07-15T07:00:00.003-05:00

The first journalistic experience I ever had with rankings had to do with a story I wrote about school district results in the statewide third-grade reading test, which was assessed to state third-graders between 1989 and 2005. (That has since been replaced by the Wisconsin Knowledge Concepts Examinations, by the way.)

When I reported that the area’s biggest school district had scores that were less than other schools in the area and schools in its athletic conference, I was called on the carpet by school district officials (not for the first or last time, by the way) and told that you really can’t compare scores of one group to another. One year later, when a different group of third-graders got better results, the school district, of course, crowed about their great test scores.

(And if you think that’s bad, just try comparing property tax rates between municipality–school district–county combinations.)

I thought of that when I saw CNBC’s ranking of states as places in which to do business. Texas ranked first, followed by Virginia, Utah, Idaho and Colorado. Alaska ranked 50th.

How did Wisconsin rank? Number 37, behind, in the Midwest, Iowa (ninth), Minnesota (10th), Indiana (13th), Illinois and Ohio (both tied for 30th), ahead of Michigan (40th), and down four spots from 2007.

The survey, according to CNBC.com, uses public data on 40 measures of competitiveness, separated into 10 broad categories, and weighted “based on how frequently each is cited in state economic development marketing materials.”

That 37th ranking is what you get by combining Wisconsin’s rankings (apparently in the following weighted order) in cost of doing business (36th), workforce (47th, our lowest ranking), economy (36th), education (ninth, our highest ranking), quality of life (25th), technology and innovation (22nd), transportation (13th), cost of living (22nd), business friendliness (28th), and access to capital (27th).

Some of the rankings are pretty obvious. Cost of doing business refers to individual income and property taxes, business taxes, gasoline taxes, utility costs, wages, Worker Compensation insurance, and industrial and office rental space. “Economy” refers to “basic indicators of economic health and growth,” along with the number of major corporations located in a state. Education combines K–12 test scores, class size and spending, along with the number of higher education institutions (in Wisconsin’s case, 13 University of Wisconsin four-year schools, 20 private four-year colleges, 13 UW two-year schools, and 16 technical colleges). “Business friendliness” is “the perceived ‘friendliness’ of their legal and regulatory frameworks to business.” “Access to capital” refers specifically to venture capital.

Some are not so obvious. “Workforce” refers to the numbers of available workers and their average education level, unionization level (with higher levels getting lower ratings because “while organized labor contends that a union workforce is a quality workforce, that argument, more often than not, doesn’t resonate with business”), and the job placement success rates of state worker training programs. “Quality of life,” which every Wisconsin economic development body touts, is based on “local attractions, the crime rate, and health care.” “Technology and innovation” is based on states’ “support for innovation,” number of patents issued to state residents, and the “deployment of broadband.” “Transportation” is an interesting measure, based on “the value of goods shipped by air, land and water,” as well as air travel availability and road quality.

With these as the definitions, 37th isn’t much of a surprise. Given our levels of taxation and regulation, in fact, it's pretty remarkable that Wisconsin came in just 36th in cost of doing business and 28th in business friendliness. (Then again, the survey was conducted before the news that our state makes a habit of overtaxing our corporations.) It's nice to see that we rank 13th in business-related transportation given our lack of large airports and the fact that most of our four-lane highway construction came at our initiative, rather than having been part of the Interstate Highway System. (More on that in a future post.)

Some are surprising, and perhaps you would disagree with them. Every Northeast Wisconsin business person, without exception, has always touted the quality of his or her workforce. In fact, some businesses with nationwide customer bases even export their local employees to other areas of the country for work, reasoning that the cost of housing employees is less than the benefit of their superior comparative work ethic. However, Wisconsin historically has a below-average percentage of people with college degrees. Many Northeast Wisconsin private-sector employers have unions and get along fine with them; public-sector unions, however, are the bane of the taxpayer's existence in this state. As for the success rate of state workforce development programs, this rating would not seem to be a vote of approval.

About our state's economy, at least it can be noted that 36th is 10 places better than in 2007. This half of the state is manufacturing-oriented, although health care and the insurance industry are significant white-collar employers. High-tech and particularly biotech are growing but comparatively smaller segments. Texas, the number one ranked state, is also ranked first in economy, with a gross state product per capita nearly $3,000 more than Wisconsin's. This ranking doesn't measure per capita income, but Wisconsin has more often than not trailed the national average, depending on how you count, in personal income as well.

Tom Still, our former Inside Wisconsin columnist and president of the Wisconsin Technology Council, argues that Wisconsin's culture has not been as entrepreneurial as, say, the culture of Minnesota, which, you'll note, is ranked 27 places higher than Wisconsin. It has to be said as well that tax rates as historically high as ours (an important point — Wisconsin's reputation as a nosebleed-height tax state far predates tax cuts passed in the 1980s and 1990s) don't really reward entrepreneurial risk-taking.

A quibble in the opposite direction is our ninth-place ranking in education, based on our high spending on education (leading directly to our high taxes) and our students' high test scores, which I would argue has as much to do with their parents' opinion, as expressed in parental discipline, about the importance and value of education as with what happens inside Wisconsin schools. The large number of post-high school education options does not correlate with our aforementioned below-average college graduation rate. And there is less correlation than teacher unions want you to believe between education spending and education quality; otherwise, New York, New Jersey and the District of Columbia would be the top three in U.S. education quality based on per-pupil spending, and I don't think anyone believes that to be the case. Wisconsinites reflexively boast about our great schools without, I think, seriously investigating whether our schools really are as great as we think they are. (Being seen as having some of the best schools in the U.S. may not be such a great thing either.)

One final quibble is in the area of quality of life, where Wisconsinites might have a different definition than CNBC's survey. Wisconsin doesn't have that many name-brand attractions; the Northwoods is not necessarily thought of like, say, Disneyland, and yet observe the U.S. 41/U.S. 45 interchange in Oshkosh, or Interstate 39 in Marquette and Waushara counties, on a Friday evening. Wisconsin's crime rates are historically low (note that this list of the 30 lowest metro-area violent crime rates includes Sheboygan, Appleton, Eau Claire, Wausau, Fond du Lac and Oshkosh). This survey does seem to suggest that businesses don't take the environment seriously when making location decisions.

So what do we do about 37th place? First: Take it seriously. Unlike, say, a certain newspaper chain's obsession with our drinking habits with accompanying potentially manipulated survey, CNBC appears to have no axe, partisan or otherwise, to grind. If the survey is based on measures of competitiveness that economic development organizations tout, then based on those standards, Wisconsin is not doing very well. The survey should be looked at in the same way one would look at a negative job review: Fix the problems. It's not as if Wisconsin will be fired if we don't improve, but then again not improving won't make our state a better place to work or live.

Nothing will get better in this state, business-wise, if we take either tack usually found when faced with survey results we don't like: (1) attack the messenger, the survey or the conductor of the survey, or (2) revert to boosterism and tell people to not believe this survey; this is a great place to do business. The role of economic development corporations or business promotion groups is certainly not to emphasize the negative. But someone must point out that, compared with the states with which we are competing for business — including keeping the businesses we have here from leaving — Wisconsin has barriers to business vitality, economic prosperity and wealth creation (particularly attitudinal barriers), and if we ever expect sustained improvement in our state's economy, we need to deal with those barriers, particularly on Election Day.

Quote of the Birthday

2008-07-14T08:00:00.000-05:00

President Gerald Ford, born on this day in 1913:

“A government big enough to give you everything you want is a government big enough to take from you everything you have.”

Your Monday morning reader

2008-07-14T07:00:00.004-05:00

Given our ridiculously short summers, Wisconsinites often indulge themselves in the long weekend, or the overstuffed weekend — to jam 10 pounds of events into a five-pound bag.

That's how I find myself after a weekend that included attending the Iola Old Car Show with a Costa Rican Episcopal priest and my 25th high school reunion. (In both cases, a good time was had by all. The first might represent my annual sole chance to get a Chevrolet Corvette thanks to the annual St. Anna Fire Department Corvette raffle. As for the latter, I awoke Sunday morning to the exquisite aroma of a special production of the reunion, whole bean coffee named … “Choy to the Max.” (Another contribution from the ’80s that I forgot to mention Friday.)

So this morning, I pass on reading you might not have gotten to this past weekend that is worth your attention, including:

The Milwaukee Journal Sentinel ran 12 pieces Sunday in reaction to the comments of former comptroller general David Walker on our $53 trillion Social Security and Medicare fiscal hole, growing at the rate of $2 trillion to $3 trillion per year — two senators named Kohl and Feingold (what state are they from? And where are Wisconsin’s senators anyway?), Reps. Tom Petri (R–Fond du Lac) and Steve Kagen (D–Appleton), the latter of whom didn’t answer the question, and Wisconsin’s other representatives, including Paul Ryan (R–Janesville), who actually has a plan.
One perspective on former U.S. Sen. Phil Gramm’s comments that the U.S. is in a “mental recession,” not an actual recession.
Investors Business Daily mostly agrees with Gramm.
No, Republicans do not have a monopoly on good ideas.
Economist Greg Mankiw in today’s New York Times on what presidential candidates trying to get the votes of economists should support. (You should support at least five of eight.)
The Economist’s Lexington on Barack Obama’s flip-flops, with this particular insight: “The vital question is not whether Mr Obama is changing his positions but whether he is changing them for better or worse.” (I would argue that the better question is which version of Obama is more believable … but you can wait to read about that in this space.)
Speaking of Obama, Wall Street Journal columnist Matt Miller on three non-liberal positions Obama must take to get elected president: (1) actual accountability for teachers, including better pay for good ones and pink slips for bad ones; (2) reducing our second-highest-in-the-world corporate income taxes; and (3) fixing the problem with health savings accounts’ high deductibles and copayments that “put undue burdens on the sick and the poor.”
One more on Obama: The relationship between Obama’s chances of getting elected president and the stock market.
In keeping with this being car show season, insight into why cars of today don't get the gas mileage of cars of 30 years ago.

The Class of 1983

2008-07-11T08:00:00.003-05:00

This is Reunion Month at the Prestegard household. This weekend is my high school’s 25th class reunion; my wife’s 25th class reunion is at the end of this month.

That makes us two of the older members of Generation X, which means we supposedly are slackers, unhappy at work, seeking bala nce between work and life, wanting independence to do our work, tech-savvy, blunt, independent, skeptical, knowledge-seeking, and so on. And, according to this, we Gen Xers believe Generation Y suffers from Attention Deficit Hyperactivity Disorder. (Damn kids.)

I am skeptical about generational attributes, although some are probably valid since people of similar age have common experiences. My personality wasn’t changed by Ronald Reagan’s election to the presidency in 1980, although my worldview was. Unlike many of the people with whom I graduated from college (that was 20 years ago this year), I had a job lined up almost two months before I graduated. Is the fact I didn’t get married until I was 27 an attribute of my generation, the result of my exciting single social life, or merely due to the fact that my wife-to-be took her own sweet time returning from her Peace Corps service in Guatemala? (As if she was supposed to know about a timetable that didn’t exist.)

La Follette High School in Madison is certainly not the same place I went to high school (nice to see, though, that the principal and other administrators are alumni), and it’s not the same high school whose athletes I covered for a weekly newspaper while I was in college. (I figured that out the first time I read about drive-by shootings at La Follette.) There are four public high schools in Madison, and when I was in high school, West was where the university professors’ children went, Memorial was for the West Side snobs, East was for the blue-collar families (although Maple Bluff residents also went there), and La Follette was the high school of the East Side white-collar families. (The demographics at La Follette have changed substantially since my days there.) Our biggest rival was East, as demonstrated by the police presence at La Follette–East hockey games — common today, but not in those days. (And speaking of hockey, my class provided Madison’s, and perhaps Wisconsin’s, first female varsity hockey player, Sue Mussey, who went on to play at Providence.)

One year ago, after my aunt’s funeral, I drove past La Follette, since the mausoleum my aunt chose as her final resting place is in the neighborhood, to show our children where I went to high school. Out front, I saw a Madison police car and a Madison TV reporter doing a story about some kind of incident there. In the four years I went to La Follette, the only incident worth a TV story that I recall was a large underage drinking party outside of Madison put on by the class of 1982 on Senior Skip Day. (The biggest incident involving our class, about which speculation still occurs, was an epic food fight at lunch outside one day. If it comes up this weekend, it’ll probably be a Rashomon-like experience for those who witnessed it or participated in it.)

La Follette was a good place to go to high school, although with more than 2,000 students, it’s not as if I knew that many people with whom I graduated. As with attending large colleges, you’re better off joining groups of people with whom you have common interests. In my case, that was the La Follette bands (directed for two years by an alumnus of and assistant for the world famous University of Wisconsin Marching Band) and the student newspaper, The Lance. (Not named for someone named Lance, but a short version of the athletic nickname, “Lancers.”) My first big journalism moment was covering a controversy that took place over a group of cheerleaders who quit due to some kind of conflict with the athletic director. (And that’s all the details I remember after more than 25 years.)

Those kinds of student groups, though, mean that you spend less time with your classmates, since groups like those include students your age, older than you, and younger than you. (My first girlfriend, who I met in the band, was in the aforementioned Class of 1982, although she was not present at the epic drinking party.) There isn’t anyone from the Class of 1983 with whom I’ve kept in even semi-regular touch since graduation. It’s not as if I’ve deliberately shunned my classmates (a group of us attended the same schools from first grade to graduation), although I didn’t pine for my high school days after graduation either. Our paths simply went in different directions after graduation.

Our class’ biggest accomplishment (other than winning the Homecoming class competition three years in a row, which is not something most people put on their résumé) was our contribution to La Follette’s state championship in Class A boys basketball in 1982, our junior year. La Follette’s team included one starter who went on to become the University of Wisconsin’s fifth leading men’s basketball scorer, another (a classmate of mine) who also played Division I basketball at Western Michigan, and another starter who played football at Wisconsin and with the New England Patriots. And yet La Follette, with five regular-season losses, was the underdog in the Class A championship game against Stevens Point, which was undefeated going into the title game … but not undefeated afterward. (As it happens, Stevens Point’s leading scorer played for Wisconsin, where he was a teammate of his state championship game rival. Also as it happens, his sister is in the July 8 Marketplace.) My contribution to the state championship was in the band.

(Watching the game 25 years later, I was struck by (1) the quality of that game, final score 62–61 in a game played years before the three-point shot came to high school; (2) the amazing free throw shooting (one miss in the entire game … by the losing team); and (3) how free-flowing the game was, even though neither team would be considered an up-tempo team. In contrast, the style of Wisconsin high school basketball these days is much lower-scoring, much more defense-oriented, and not particularly fun to watch if you have no rooting interest.)

After attending my 10th class reunion (also the same month as hers), my wife noted that she had more in common with my classmates than with hers. That’s probably the difference of going to a suburban high school with expectations that graduates would go to college, vs. going to a rural high school where more people didn’t go on to college than did. (One result: Her class has a larger proportion of grandparents than mine.) I think she is the only member of her class who graduated from college and then went to the Peace Corps.

The La Follette Class of 1983 graduated at the University of Wisconsin Fieldhouse June 4, 1983. (One of the speeches can be read here.) With more than 500 graduates, it’s pretty remarkable to note that everyone who was there for day one in August 1979 and didn’t drop out or move away was still there for graduation. In other words, none of my classmates died while I was in high school; there were no memorial pages for seniors in the La Follette 1983 yearbook.

Of course, that wasn’t the case for long. Since graduation, 15 have died (and possibly more since the whereabouts of 145 of us can’t be found). The deaths I’m familiar with include car crashes, a racing accident, and a heart attack (someone with Down Syndrome or something like it). For a while, every time I picked up a Sunday Wisconsin State Journal, I read an obituary of someone I knew.

Unless you had a miserable high school experience, class reunions are a choice between dread at going and regret that you didn’t. The former is in the inevitable comparisons between yourself and your classmates — who has aged better than you have, who is more successful than you are, who has experienced more horizontal growth (in my case, about 60 pounds of horizontal growth), who has become follically challenged, will your ex-girlfriend be there, etc.

The latter comes after you find out that you actually get along with your classmates better now (at least for one weekend every five years) than you did when you were in high school. In the hormonally and emotionally supercharged environment of high school, if you are not a loner, you’re competing for, among other things, grades, athletic-team playing time, opportunities for what our student handbook called “Inappropriate Displays of Affection,” placement in band, and favored jobs. Since high school is not a place where emotional maturity can usually be found, slights occur, feelings get hurt, and grudges build. (That’s my experience as a male; for females, take this paragraph and multiply by 50.) After a while, though, for those who attend, the negatives don’t matter; those for whom the negatives matter simply don’t go to their reunions.

Class reunions also are a reminder of the march of time. La Follette opened in 1963, and if you do the math, you’ll discover that the Class of 1983 went to La Follette during the first half of the school’s existence to date. (Sigh.) I notice that “oldies” radio stations such as WOGB (103.1 FM) and WVBO (103.9 FM) have now decided that ’80s music fits into their programming. Yes, we are the generation that foisted Madonna, Duran Duran, Culture Club, Twisted Sister and heavy metal upon the world. Judge the music of 1979, 1980, 1981, 1982 and 1983 for yourself.

(Before any snide comments from you Baby Boomers out there: May I point out that the Four Seasons’ 1975 hit “December 1963 (Oh What a Night)” depicts an event that occurred nearly 45 years ago. Moreover, disco is your fault. You’re welcome.)

It’s odd to suddenly be in a favored retail demographic. Almost as odd as having music you listened to in high school be on an oldies radio station. Or realizing that everyone with whom you graduated from high school is now between 42 and 44.

The ______ Democrats

2008-07-10T07:00:00.004-05:00

The headline of this piece is not intended for the reader to insert his or her favorite obscenity.

It is to note the Democratic Party’s obsession with categorizing its members. As The Economist notes in “White men can vote” this week, referring to Barack Obama:

The “people” section on his website divides Americans into 17 categories: Latinos, women, First Americans, environmentalists, lesbian, gay, bisexual and transgendered people, Americans with disabilities, Asian-Americans and Pacific islanders and so on. There is no mention of whites, or men.

As you can judge from the headline, the Economist’s story (I’d tell you who wrote it, but the Economist rarely uses bylines) proposes that white men will decide whether Obama is elected president, and that poses a problem for Obama given that Obama trails John McCain “by about 20 points among them.”

This is a wonderfully written piece that doesn’t merely talk about racial politics, but about how voters view the role of government. For instance:

Between the presidential elections of 1960 and 2004, [Democrats'] share of the southern white male vote shrank by 17 points, but among non-southern whites it still shrank by 12 points. And racial attitudes have changed dramatically since the 1960s, especially among the young. There must be something besides bigotry making white men spurn the Democrats.
Thomas Frank, the author of What’s the Matter with Kansas?, thinks the white working class has been hoodwinked. It is in their economic interest to vote Democratic, but they don’t because those crafty Republicans have got them all worked up about silly moral and cultural issues such as abortion, guns and gay marriage.

Both theories are popular among Democrats, not least because they imply that Democrats have done nothing wrong; it is just that poor white trash are too bigoted or stupid to support them. But Democrats will not get very far by blaming the voter. David Paul Kuhn, author of The Neglected Voter: White Men and the Democratic Dilemma, points out that moral issues cannot easily be separated from economic ones. Poor people fret more about family breakdown because they see more of it than rich people do and its consequences, for them, are worse.
In a time of economic insecurity, it is rational for people to turn to things they can rely on, such as faith and patriotism, and unwise for Democrats to scorn them for it. That is why Mr Obama’s comment that people in small towns “cling to guns or religion or antipathy to people who aren’t like them” because they are “bitter” will be the keystone of Republican attacks, predicts Mr Kuhn.
Mr Kuhn thinks the Democrats’ failure to take white men seriously is the main reason they keep losing presidential elections. The party captures liberal white men—typically prosperous professionals—but scores badly among businessmen and white male workers. Part of the problem is that Democrats are identified with the notion that white men are to blame for all the world’s ills, from racism to the oppression of the workers. Few white men share this view. Many are workers themselves.

And:

In some voters’ minds, Democrats are associated with an assault on masculinity itself. “Boys can’t be boys in school any more,” complains Karen Combs, a volunteer for Mr McCain. And urban liberals don’t understand how much guns matter to rural white men, fumes Dave “Mudcat” Saunders, a Democratic strategist. “Someone’s talking about taking your guns, they’re talking about coming inside your fence,” he says. “And government should stop at your fence.”

(I am shocked that a Democratic strategist could be found who espouses such a libertarian attitude as “government should stop at your fence.”)

Economist columnist Lexington echoes that point in a column about Michelle Obama:

Now that the primaries are over, the issues have changed. Blacks are solidly for Mr Obama, but many swing voters are unsure. Some Republicans think his wife’s habit of speaking her mind could prove a problem. For example, in February, as her husband’s campaign was catching fire, she said: “For the first time in my adult life, I am proud of my country, because it feels like hope is finally making a comeback.” Some Americans bristle at the implication that the only worthwhile thing any of them has done in the past quarter-century is to back Mr Obama.

Mrs Obama’s speeches rarely accentuate the positive. America, to her, is a “downright mean” country where families struggle to buy food, where mothers are terrified of being fired if they get pregnant and where “life for regular folks has gotten worse over the course of my lifetime”. But she was born in 1964, when Americans lived shorter, poorer lives and southern blacks couldn’t vote. Whereas her husband is magically skilled at not giving offence, Mrs Obama can be a blunt instrument. “Don’t go into corporate America,” she urges young people, denigrating what most Americans do for a living and biting the hand that pays for all the public programmes she favours. “Barack Obama will require you to work,” she says. “He is going to demand that you shed your cynicism. That you put down your divisions. That you come out of your isolation…Barack will never allow you to go back to your lives as usual, uninvolved, uninformed.” Some people would rather decide for themselves how to live their lives.

Conservative pundits have savaged her. One acerbic blogger calls her “Obama’s bitter half”. Others mock her occasional gripes about her personal finances and her solipsistic college thesis about the woes of black Princetonians. The National Review says she “embodies a peculiar mix of privilege and victimology, which is not where most Americans live. On the other hand, it does make her a terrific Oprah guest.”

(Voters aren’t the only ones being categorized. The Wall Street Journal’s Best of the Web Today noticed this passage from a New York Times story about preparations for the Democratic convention in Denver in August: “A 28-page contract requested by Denver organizers that caterers provide food in ‘at least three of the following five colors: red, green, yellow, blue/purple and white.’ Garnishes could not be counted toward the colors. No fried foods would be allowed. Organic and locally grown foods were mandated, and each plate had to be 50 percent fruits and vegetables. As a result, caterers are shying away.” However, the Denver Post reports that convention organizers changed their minds and termed the stipulations “guidelines.”)

To say that Obama has a white male problem isn’t correct — he has a traditional values problem, one that is not going away regardless of how many speeches he makes about how patriotic he is, how many flip-flops he makes about gun rights, and how many tax cuts he proposes for working families. (His political party clearly has a weirdness problem, as shown by its aforementioned fixation on the color of food.) Those white males Democrats seem to denigrate and can’t attract to Obama’s side more often than not have wives, who probably have similar views about what government should and should not do, and who also vote. Obama’s problem isn’t his skin color or his ethnic background — it’s his positions on issues, including the cynical impression created by his issue flip-flopping, and his ignorance about how taxes work.

Michelle Obama’s demand that “you put down your divisions” should apply first to her husband’s political party — the same party whose presidential candidate’s Web site “divides Americans into 17 categories: Latinos, women, First Americans, environmentalists, lesbian, gay, bisexual and transgendered people, Americans with disabilities, Asian–Americans and Pacific islanders and so on.”