Christian Schneider

Author, Columnist

Category: WPRI Blog (page 5 of 6)

Public Libraries – No Longer Just for the Literate

Throughout history, government has recognized several important classes of individuals who need help. As American citizens, we approve of a portion of our tax dollars going to help the truly needy. Currently, these groups can be broken up into the following categories:

1. The Poor;
2. The Disabled;
3. The Elderly;
4. People who haven’t seen “Harold and Kumar Go to White Castle.”

Yes, your tax dollars are going to help those poor souls who are dangerously under-entertained, by subsidizing your neighborhood Free Blockbuster, commonly known as the public library.

Public libraries were formed due to a recognition that in order to have an educated populace, the public should have access to literature. Rather than people with low incomes having to go purchase books, they could have free access to them at the library. This ensures a baseline of access to literature for those of modest means, and provides valuable research opportunities for individuals who may not want to buy all their source material.

According to author William James Sidis, the public library as we know it originated in Boston in 1836. In 1731, Benjamin Franklin founded the Library Company of Philadelphia, which allowed members to buy a subscription, and the pooled money went to buy books (the company actually still exists). Rumor has it that Ben Franklin’s first checkout was “Knocked Up.”

Recently, public libraries have begun to change their missions altogether. Libraries are now equipped with full multimedia capabilities, and serve less as educational opportunities and more as neighborhood entertainment centers. Library patrons have expanded from those who need no-cost materials to free-riding wealthy people looking for some free entertainment. Get a library card and now you have full access to a wide variety of music CDs, DVD movies, video games, and internet access, all for free, and all at taxpayer expense.

In fact, video stores around Wisconsin are shutting down now because they can’t compete with internet-based companies like Netflix, which charges one monthly fee and mails DVDs to the customer. But public libraries actually had this system in place well before Netflix ever appeared. For years, library patrons have been able to go online, request virtually any DVD or music CD they want, and have it delivered to their local library for pickup. In this respect, local libraries had Netflix’ technology beat by years. And for free, to boot.

In the 2008 Milwaukee City budget, Mayor Tom Barrett began to recognize the absurdity of public libraries serving as clearinghouses for free DVDs and CDs. His budget eliminated the ability of library patrons to put digital media on hold, thereby making it more difficult to freeload off the taxpayers.

According to the Legislative Fiscal Bureau, public libraries cost us $220 million per year. Of those funds, 81.5% are provided by local governments through property tax revenues. 6.5%, or $14.2 million, of the total system budget is provided by the state, and the remaining 10% is provided by gifts, endowments and the late fees I paid for “27 Dresses.”

When we look at the broader scope of government, do we really need to consider free entertainment as a basic public service? Wouldn’t the public be better served by people who can afford it going to a video store and paying for their DVDs? Wouldn’t that create jobs and economic activity? Are there homeless people without health care laying on the street, curled up in blankets, clutching a DVD copy of “Meet the Fockers?” Is this really a public funding priority? Has anybody ever answered a citizen survey listing being able to rent “Superbad” for free as a top 10 government priority?

Library apologists would point out that much of written literature is popular entertainment and that it would be impossible to draw a line between what is valuable and what is not. If those people can’t tell the difference between adultery in “The Scarlet Letter” and a character humping hot pastry in the movie “American Pie,” then they have been standing too near the book de-magnitizers for too long. If the DVD you are checking out makes Rob Lowe’s home video collection look like “Touched by an Angel,” it probably doesn’t deserve a place in a public library.

With local and state governments facing significant budget challenges, it might be time to take a closer look at the non-essential services they are providing. Nobody is facing imminent death because they haven’t seen season one of “Who’s the Boss?” on DVD. Yet local libraries might be soaking the taxpayers to make watching Alyssa Milano’s pre-teen years a reality.

-May 5, 2008

The Good ‘ol Days of Mudslinging

Coming off another statewide campaign in which candidates and their supporters criticized each other bitterly, the usual calls for reforming our campaign finance system are underway. These “negative” attacks are so disturbing to editorial boards, the state’s two largest papers have actually proposed doing away with Supreme Court elections altogether. Apparently, the best way to protect the peoples’ interest is to make sure they have no say in who governs them.

Yet for all the people that think these races are too “negative,” it is instructive to go back and take a historical look at negativity in campaigning. In David Mark’s excellent book “Going Dirty: The Art of Negative Campaigning,” he details some of the most important races in American History, and the level of animus and dirty campaigning in each.

In the “good old” days, much of the campaigning was done by third parties, in the form of partisan newspapers. These are the very third parties campaign finance reformers now seek to shut out of the political discussion come election time, believing the only people allowed to have discussions about elections are the candidates themselves. Here’s a look at some of the campaign rhetoric in presidential races that actually determined the course of our nation:

Adams vs. Jefferson (1796)

The Federalists, led by John Adams, attacked Thomas Jefferson as an “Atheist,” “anarchist,” “demagogue,” “coward,” and “trickster,” and said that Jefferson’s followers were “cut-throats who walk in rags and sleep amid filth and vermin.”

Adams vs. Jefferson (1800)

Jefferson, who was Vice President (because at the time, the person who came in 2nd in the previous election earned the VP job) took Adams on again. Jefferson’s supporters tried to link Adams to George III, even starting a rumor that Adams intended to marry his son off to the daughter of George III and create an American dynasty under British rule. Adams’ supporters ripped Jefferson, calling him (the guy who wrote the Declaration of Independence, incidentally) “a mean-spirited, low-lived fellow, the son of a half-breed Indian squaw, sired by a Virginia mulatto father… raised wholly on hoe-cake made of coarse-ground Southern corn, bacon and hominy, with an occasional change of frecassed bullfrog.”

Andrew Jackson vs. John Quincy Adams (1828)

The two had run against each other in 1824, with Jackson winning the popular vote; yet three other candidates, including Adams, fractured the electoral votes to the point where deciding the election had to go to Congress. Adams then convinced Speaker of the House Henry Clay to engineer a vote to give him the presidency; three days later, Clay was given the secretary of state job in the Adams administration.

Incensed, Jackson spent the entire next four years attacking Adams. Jackson’s supporters called Adams “The Pimp,” based on a rumor about Adams coercing a young woman to have sex with a Russian Czar a decade earlier. Adams’ supporters countered with a cartoon of Jackson hanging a man in a noose, a reference to Jackson’s time spent executing Seminole Indian sympathizers. The cartoon’s caption read, “Jackson is to be president and you will be HANGED.”

The campaign also saw each candidate attack each others’ wives. Jackson’s supporters claimed that Louisa Adams was an illegitimate child that had been having sex with Adams before marriage. Adams’ supporters pointed out that Rachel Jackson married Andrew before her previous marriage had legally ended. After growing increasingly depressed, Rachel Jackson died several days after Jackson won the campaign, and Andrew never stopped blaming Adams for her death.

James Blaine vs. Grover Cleveland, 1884

Republican Blaine suffered attacks when he refused to distance himself from a Protestant minister’s anti-Catholic slurs, including that the Democrats were the party of “Rum, Romanism, and Rebellion.”

Cleveland was attacked for having hired a substitute to fight for him in the Civil war, a common practice for wealthy Northern men. Cleveland also faced attacks that he had fathered an illegitimate child, leaving to Blaine’s campaign slogan, “Ma, ma, where’s my pa?” Cleveland admitted that the child may be his, and paid child support until the boy was adopted by wealthy parents.

Keep in mind that in each of these examples, the Union was still in its infancy – so unlike the hyperbole in today’s campaigns, the future of the country truly was at stake. And yet, with all of this mudslinging and “misinformation,” voters made choices that crafted our fledgling democracy into the world’s gold standard for individual freedom. Compare that to the recent Wisconsin State Supreme Court race, where the suggestion that one candidate “tends to side with criminals” was covered as if it were an alien invasion, leading the news media to advocate shutting down elections altogether.

Interestingly, Mark points out that one of our founding documents is essentially an issue ad against British Royalty. While everyone remembers the towering rhetoric about all men being created equal and the promises of life, liberty, and the pursuit of happiness, the Declaration of Independence is essentially a negative document that savages King George III of England as “unfit to be the ruler of free people.” According to the Declaration of Independence, “He (George) has plundered our seas, ravaged our coasts, burnt our towns, and destroyed the lives of our people.” Basically, our nation was founded by a hit piece.

Campaign finance reformers will continue to harken back to the “good ‘ol days” where everyone got along and campaigns were run with dignity. Yet these days never existed, and never will. We have to continue to trust the voters to make choices that have built us into the world’s foremost democracy – and that includes trusting our citizens with the right to free political speech.

The Government Accountability Board: Growing Like a Weed

In an effort to strengthen the state’s abysmal record in enforcing election law, the Legislature last year implemented a new board to review campaign activities. The new Government Accountability Board was set up to enforce elections laws and to handle campaign finance reports.

Yet since the new board was implemented, the GAB has seemingly had trouble with the very laws it was intended to enforce. Just this week, the Board had to remove two members who violated the State Constitution by serving on the Board before their terms as judges had expired (even though they had resigned their positions.) In their press release, the GAB called this constitutional provision “obscure,” as if the Wisconsin Constitution were somehow hard to track down. Fortunately, the state’s Attorney General was able to find his copy under his couch cushions and point out this violation to the Board.

In one of their first actions, the Board announced their intention to regulate campaign advertisements for upcoming elections. Apparently, they believe a board of political appointees should be the ones serving as the speech police for Wisconsin campaigns. Yet nothing in the Wisconsin statutes gives them the ability to regulate the timing and content of political speech. When Legislators passed the law instituting the Board, they thought they were authorizing these unelected bureaucrats to enforce existing laws, not to make new ones up out of thin air. This would be like going to the doctor for an ear infection and ending up with a vasectomy.

Of course, courts continue to rule that the suppression of issue advocacy during elections is a violation of another obscure constitutional provision, known mostly to scholars as “The First Amendment.” Then again, why would the GAB start worrying about our founding documents now?

As their denouement, it appears the GAB is now going to move to suppress free speech before three of their members are even confirmed by the State Senate (as is seemingly required by the law). Three of the members have been confirmed by the Assembly. The Board knows that their appointees would have a difficult time mustering the 2/3rds vote necessary for Senate confirmation if their stated purpose was to regulate campaign speech. So some members may try to serve on the Board and vote to regulate issue ads before the 2009 session begins, when they will require confirmation. It appears they are going to serve almost as if they as “recess” appointments, since the Senate is not currently in session.

As a result of the GAB’s actions, Wisconsin will have an unelected, unconfirmed group of bureaucrats who will be putting themselves in charge of political speech for all upcoming state elections, in violation of their statutory authority. If you think the weeds taking over your front lawn this spring are a problem, that pesky clover has nothing on the Government Accountability Board. Someone needs to get the sprayer out and rein in this out of control board, before it chokes off meaningful political discourse.

-April 11, 2008

NOTE: This commentary initially did not mention the fact that three board members had already been approved by the Assembly. That fact has been added for clarity.

The Wisconsin Legislature’s Putrid Present

My wife and I used to have a great family dog. He was loving, loyal, and always happy to see me when I came home from work. However, on the rare occasion, he would sneak into the basement and have an “accident.” When he did so, he would run and hide behind the couch, knowing how little his rectal gift would be appreciated.

Eerily, my dog’s behavior mirrors the Wisconsin State Legislature’s attempts to pass a budget repair bill to fill in a $652 million hole this biennium. Put simply, the Legislature is pooping in our basement, and looking for a couch to hide behind.

In fact, the Assembly and Senate are so desperate to befoul our state’s finances without anyone noticing, they are willing to break the law to do so. Both houses have passed competing versions of budget adjustment bills without either house sending it to the Joint Finance Committee, where any appropriation bill legally has to go. According to the Wisconsin law:

“All bills introduced in either house of the legislature for the appropriation of money, providing for revenue or relating to taxation shall be referred to the joint committee on finance before being passed.”

Now, it may seem that whether or not a bill goes to the Joint Finance Committee is an arcane procedural technicality, obsessed over by only the most dedicated Capitol coneheads. But, in fact, the Joint Finance Committee exists specifically to remedy these types of funding emergencies, by putting the brakes on the process. The committee, which consists of members of both parties from both houses, forces the adults to the table to negotiate and doesn’t let them leave until they have a deal. (An excellent history and justification for the committee can be read here.)

When the Democrat-controlled Senate introduced their budget “repair” bill, they sent it to the “Senate Finance” committee. The Senate’s bill relies heavily on a new $400 million hospital tax, which they somehow believe will make health care less expensive. Then again, this is the same group that thought higher gas taxes would make gas cheaper, so we clearly shouldn’t expect much to begin with.

This hypothetical committee consisted of six Democrats and two Republicans – the Senate half of the Joint Committee. Naturally, the faux-Senate committee passed the bill before it was sent to the floor and passed by the full Senate. Needless to say, the “Senate Finance” committee is not the “Joint Finance” committee, where the bill legally had to go. Cutting the Assembly Republicans out of the equation allowed Democrats to whisk their bill through without any meaningful scrutiny.

Ironically, this tactic was first used in 2000, when now-disgraced Senate Majority Leader Chuck Chvala introduced his “mini budget,” which contained a laundry list of left-wing giveaways. It is believed that Chvala’s bill was both the first and last time this illegal procedural maneuver was used. Coincidentally, this gimmick was revived this year by long time Chvala ally Russ Decker, who now serves as Senate Majority Leader.

Even worse, the Assembly passed their budget repair version without ever sniffing the finance committee. Assembly Republicans merely yanked their bill to the floor and voted on it, hoping the whole mess would just go away. Their bill, which relied heavily on budgeting smoke and mirrors, actually increases the state’s structural deficit by $753 million. In effect, they “solve” the budget problem by giving us more of the same nonsense that got us in this fix in the first place. This is like curing an alcoholic by giving him enough Jim Beam to make him forget he’s a drunk.

In both cases, circumventing the legally mandated procedure allowed legislators to get out of town before anyone actually started to pay attention to what was in their equally-putrid bills. One capitol staffer told me that skipping Joint Finance is akin to a speeding ticket – yet when I speed, it doesn’t cost taxpayers $652 million.

Rather than using the budget shortfall as an opportunity to correct permanent flaws in the way Wisconsin spends money, our lawmakers are more comfortable high-tailing it for the hills. Most likely, they’ll sneak through their final agreement on the first day of warm weather, when reporters are busy investigating why people like to have picnics. But for now, lawmakers are intent on avoiding negative press and getting back to their districts to start running their campaigns. Take a look – you’ll find them hiding behind your couch.

-March 27, 2008

Hate George W? You Should be a Conservative

There’s an old saying: Republicans get elected saying big government doesn’t work, then go about proving it.

In recent years, America has become a breeding ground for liberals. The Left has used their universal distaste for George W. Bush to recruit new footsoldiers all over America. They’ve been voting in Democratic primaries at twice the rate of the GOP primaries. They deride the President as a smirking, right-wing buffoon. And that’s probably what it says on his fan mail.

Naturally, much of liberal distaste for President Bush stems from the Iraq war. But war in itself doesn’t necessarily fall anywhere on the liberal-conservative continuum. The reason more Democrats don’t start more wars is because only one Democrat has been elected in the last 28 years. As everyone can recall, the modern-day liberal gold standard, John F. Kennedy, got us into Vietnam – and it was LBJ in 1965 who escalated our presence there. Clearly, misguided wars are a bipartisan problem.

What’s most interesting, however, is that when Bush has blundered badly with regard to domestic policy, it’s because he’s moved over to the liberal side. Dabbling in big-government solutions has delivered Bush some puzzling embarrassments, especially since much of the criticism he gets comes from the left wing. In effect, Bush has shown how ineffective, wasteful, and sometimes scary, big government can be – a lesson Bush haters should take to heart.

Take, for example, Bush’s most public embarrassment – the Hurricane Katrina rescue effort. We all remember the mass of humanity outside the Superdome without food or water, and people trapped on top of their homes waiting to be rescued. While Bush made some symbolic tactical mistakes, such as not visiting the disaster site in time, it was actually FEMA that proved to be disorganized and ineffective. Layer after layer of bureaucracy crippled the department, with few people in charge knowing what was going on. As a result, Democrats hammered away at Bush for the confusion, scoring political points along the way.

In the meantime, conservatives weren’t surprised at all at the atrocious response to the hurricane. This is the federal government, they pointed out. This is what happens when we pump money into a disorganized bureaucracy with no real accountability. The only difference between FEMA and other federal programs is that Medicaid hasn’t been underwater yet. Of course, the hush money taxpayers have shelled out to displaced victims of the hurricane has been exposed as a fraud time and time again. Who could have seen that coming?

Bush was also heavily criticized by the Left for another foray into big government: his Medicare Part D prescription drug program. While the President thought pumping hundreds of billions of dollars into helping senior citizens pay for prescription drugs would keep them off his back during the 2004 election, they hung it around his neck like a cold fish. The program actually ended up being a political liability, as Democrats successfully portrayed it as a “giveaway to big drug companies.”

Apparently, Democrats were surprised to find out that when you buy prescription drugs, it actually involves purchasing them from pharmaceutical companies. Liberals were likely confused when they found out you can’t buy bulk prescription drugs from Ben and Jerry’s. Yet if it were Barack Obama that proposed the program, Democrats would be building monuments to him in every city in America.

Bush repeatedly failed conservatives during his tenure. His plan to grant expedited citizenship to illegal immigrants flopped badly. He never pushed for his plan for personal retirement accounts, instead allowing Democrats to scare and confuse seniors by labeling it “privatization” of Social Security. (Democrats’ Plan B to confuse seniors was to explain to them what a “stop sign” is.) Ironically, liberals savage Bush’s attempts to expand wiretapping of terrorists. Of course, wiretapping isn’t necessarily a “liberal” ideal, but let’s be honest – electronic surveillance of citizens is much more often associated with oppressive socialist regimes, not capitalist, free market societies.

So I’d like to welcome our liberal friends over to our side. Their repudiation of George W. Bush is proof that they, in their hearts, know that big government doesn’t work. In many ways, to reject Bush is to reject the notion that government can solve our problems for us. Until, of course, President Obama magically transforms the federal government into a finely-tuned bureaucratic machine.

-March 13, 2008

Electing Judges: Save us from the Horrors of Democracy

The candid citizen must confess that if the policy of the government, upon vital questions affecting the whole people, is to be irrevocably fixed by decisions of the Supreme Court.., the people will have ceased to be their own rulers, having to that extent practically resigned their government into the hands of that eminent tribunal.

– Abraham Lincoln, First Inaugural Address

 

Wisconsin government has been infected by a poisonous presence. Apparently, this corrosive phenomenon is so dangerous, it has prompted one of the largest newspapers in the state to call for a constitutional amendment to eradicate it. And what exactly is so damaging to our democracy?

Well…democracy, actually.

Disillusioned by the spending in and tone of the state’s recent Supreme Court elections, the Wisconsin State Journal has repeatedly called for justices to be picked by an “impartial” committee, rather than by popular vote.[i] They argue that the concepts and rulings handled by the Court are far too complex for your average voter, and submitting judges to common elections is a vulgar way of picking such sacred positions. According to supporters of “merit” selection, picking judges via election is like painting a Matisse with crayons.

In their four (to date) editorials pushing such a “merit” system of picking judges, the State Journal repeatedly cites the need for “qualified” judges who don’t “appear” corrupt. Yet they cite no judge currently on the bench who they consider unqualified as a result of being picked by popular election, and they can’t name a single court action or decision handed down that is the result of this supposed “corruption” that would lead them to disenfranchise every voter in Wisconsin. Apparently they believe that one of these days, the produce manager at your local grocery store is going to slip by a confused electorate and end up on the high court.

The conceit inherent in their position lies with their elevated view of the Supreme Court. Supporters of appointed judges apparently believe in the concept of “judicial supremacy,” which gives the Court heightened importance over the other two branches of state government. Yet one must ask the obvious question: Why is democracy acceptable when picking legislators, who write hundreds of new laws each year, but not judges, who will rule on a fraction of a percent of those laws? It would seem that the 132 legislators who write all of our laws and formulate budgets would be much more susceptible to corruption. Why bother electing them?

A system of picking judges via backroom dealing runs counter to the very principles on which our government is founded. One doesn’t have to read too far into the Declaration of Independence to find that our government derives all of its powers from the “consent of the governed,” not from “people who the State Journal thinks are swell.”

In fact, one of the harshest criticisms of the court system as it currently exists is the extent to which it is insulated from public opinion. Interest groups can often convince sympathetic judges to enact new laws that would never make it through the legislative process. For instance, Wisconsin voters in 1993 approved a constitutional amendment to ban casino-type Indian gaming in the state. In the 2004-05 term, the Wisconsin Supreme Court interpreted the strict ban on gaming expansion to mean tribes could offer any types of gambling they wanted – the exact opposite of what voters had approved. This year, voters will be able to offer their opinion about whether that case was decided correctly. Yet proponents of the “merit” system would deny the public that opportunity, thinking that somehow silencing citizens makes for a fairer Court.

The true irony in the State Journal’s argument is that any change to the way judges are picked would have to be made via constitutional amendment – which, of course, must go before the full public for a vote. So the voters would have to go to the polls and affirmatively vote away their right to determine how their laws are interpreted. Then again, the paper thinks you as a voter are easily confused, so maybe they think we’d pass such an amendment. In fact, given the importance of constitutional amendments, maybe we shouldn’t leave those up to voters, either. Perhaps we should just appoint a “nonpartisan” board to determine what our Constitution says, instead of suffering through those messy elections.

Perhaps the most interesting part of the State Journal’s crusade is the role that the paper itself plays in setting the tone of judicial elections. Recent paper articles pertaining to the ongoing judicial election have dealt solely with each campaign’s charges and counter charges. So while the newspaper decries the “mudslinging” in judicial races, they gobble up the candidates’ press releases like fried cheese curds. Perhaps the Wisconsin State Journal could begin to remedy the poorly informed electorate by actually reporting on something other than what the candidates and third party spenders tell them to.

Instead, their solution is to shield our virgin eyes from the horrors of democracy, as if we are all incapable of judging candidates rationally. Clearly, we are all simple-minded rubes who sit in front of our glowing televisions and take the advertisements we see literally. Discussion of a candidate’s judicial philosophy or past rulings is off-limits, labeled as “sordid” campaigning. It seems to be a risky proposition for a newspaper to repeatedly accuse its own readers of being incapable of having an opinion about how the laws under which they choose to live are interpreted.

In 1903, voters approved expansion of the Wisconsin Supreme Court to seven elected judges, via constitutional amendment. That year, the Dane County Bar held a meeting to pick the judicial candidates it thought were most “qualified” to serve, in an attempt to bully voters unto supporting their preferred picks.

At the time, one strong voice ripped the Dane County Bar’s maneuver, pointing out that their supposed “nonpartisan” recommendations were all loyal soldiers in the LaFollette administration. To wit:

“The Madison Democrat diverts itself from day to day in forecasting judges. It gives names by the dozen, all ardent workers in the LaFollette vineyard for years. They have earned their reward, intimated the Democrat. It indicates that unconsciously the public is losing the solemn sense that long attended the investiture of the ermine. Meanwhile, the work of projecting the “organization” into every nook and cranny of the state goes forward.”

If only the Wisconsin State Journal still stood up for the rights of the voter like it did on March 25th, 1903.

-March 6, 2008
[i] Puzzlingly, one of these editorials attempted to make the case that democracy isn’t really all that important, since most judges begin their tenure as appointees, anyway. Apparently, appointing judges will help fix a broken system where most judges are already appointed. How does it benefit the system to do more of what the paper thinks is a bad thing?

Finally, A Politician with the Guts to be for Hope

Here’s what we know about Barack Obama: He wants change, and he wants hope. The only question seems to be in what order.

Both of these promises are somewhat perplexing. How is being for “change” really a serious position in a presidential campaign? News reports actually refer to some voters as “change” voters – as in, “Barack Obama is winning the ‘change’ voters two to one over Hillary Clinton.” One would think merely voting for a new Commander in Chief qualifies one as a “change” voter. There’s probably one guy sitting at home in Nebraska that goes to the polls hoping his vote will keep things exactly the way they are. So when they say Obama is winning the “change” voters, they’re basically saying he’s leading among voters who don’t go into the booth and accidentally vote for George W. Bush.

After all, who can forget the famous “status quo” marches on the White House in the 1960s?:

“WHAT DO WE WANT?!”

“PRETTY MUCH WHAT WE’VE ALWAYS HAD!”

“WHEN DO WE WANT IT?”

“NOW!!!!”

The “hope” talking point is even stranger. “Hope,” by definition, is a desire for something that hasn’t happened yet. So promising people “hope” isn’t promising them any substantive action – it’s merely promising them the expectation that something will. I currently harbor a hope that Charlize Theron will come to my house and play Guitar Hero with me. If two years from now, I’m still hoping for that to happen, I will still be hopelessly disappointed. Promising someone “hope” is like promising them hunger – you won’t get to eat, but boy, you’ll enjoy your time thinking about those nachos bellgrande.

Of course, nobody wants to be on the wrong side of either the “hope” or “change” issues. By making these themes the lynchpins of his campaign, Obama has all but accused Hillary Clinton and John McCain of accepting contributions from big money, “anti-hope” organizations. During the general election, we’ll probably see heavy independent expenditures for John McCain by Citizens for a Hopeless America.

(Side note: can you think of any more depressing job than being a fundraiser for “Citizens for a Hopeless America?” Why even make any fundraising calls – there’s probably no hope of anyone contributing, right?)

Recently, Obama has tried to move past the accusations that he lacks substance.* This includes attacking Hillary Clinton for not sufficiently wanting to destroy the health care industry in the United States. The two candidates are taking turns ripping each other on health care, accusing each other of lacking the guts to implement a full government takeover of doctors and hospitals. Hillary Clinton’s plan calls for a mandate requiring individuals to purchase insurance, while Obama’s plan involves larger subsidies for making health care more affordable.

Since there’s little chance of either of these plans ever making it through Congress, it seems reasonable to wonder why the two candidates even limit their plans in any way. You have a better chance of seeing a unicorn drinking a Slurpee than either plans have of becoming law – so what really limits the promises they can make? This is akin to daydreaming about Katherine Heigl wearing a Hazmat suit. Once the orgy of big government promises is on the table, there’s no sense in not going all the way. Both candidates should promise each American free health care, no reduction in service, lower gas prices, and a Cinnabon.

I think that would be change we call all believe in.

* – Or, he’s “all mustache and no flowered shirt,” as fans of Magnum P.I. often say.

-February 25, 2008

Wisconsin’s “Subprime” Budget Planning

The recession of 2001 exposed a dark secret in the way Wisconsin plans for economic downturns. It doesn’t. Wisconsin is near the bottom in the nation in setting aside money for fiscal emergencies, which makes budgeting during a recession a fiscal high-wire act.

Nearly every state in the U.S. sets aside a portion of their budget in a “rainy day” fund, or mandates a minimum balance to protect themselves from economic downturns. Wisconsin is near the bottom in the nation in both.

As demonstrated in this report, even a mild recession, as was seen in 2001, would cause a budget imbalance of up to $1.4 billion  in the Wisconsin’s current biennial budget. Furthermore, the lack of state planning for such a downturn serves as a recipe for more damaging tax increases and detrimental fiscal maneuvers. It appears that despite the pain caused by the last recession, Wisconsin state government has learned nothing. Wisconsin’s budget planning is clearly far from ideal; to use a term which has recently become familiar, it can be fairly characterized as “subprime.”

The possibility of recession

In early 2008, the American economy presents a mixed picture. On November 19, 2007, the National Association for Business Economics (NBER) released results of a survey showing roughly one in five of its economists figured the risk of a recession was more than 50%.[i]

In a speech before Congress in November 2007, Chairman of the Federal Reserve System Ben Bernanke warned of a slowing economy while announcing a quarter-point reduction in the federal discount rate. Bernanke noted that while economic growth in the third quarter of 2007 had been a strong 3.9%, indications were that such strong growth could not be maintained over the remainder of the year.[ii]  Bernanke warned that because of the reduced availability of credit, the contraction in housing-related activity would continue to intensify. If the housing market completely bottoms out, it could mean a significant negative effect on other sectors of the economy.

Some experts go even further in their negative reviews of the economy. In September 2007, University of Wisconsin-Madison economist Donald Nichols said he believed a recession was likely. Nichols based his prediction on the “popping of the risk and housing bubbles” caused by the collapse of the market for subprime mortgages.[iii]

Professor Nichols believes that the spillover effect from this housing crisis may have already begun, and could drive the economy into negative growth. He cites slumping auto and retail sales, as well as a survey that indicates willingness by business leaders to postpone large investment and curtail hiring.

Nouriel Roubini, a professor of economics at New York University, not only believes the American economy is headed toward a recession, but that the impending recession will be worse than the downturn in 2001. Roubini points out that 30% of the employment growth in the past three years was housing industry-related, and a significant downturn in home construction and sales could cause widespread damage throughout the economy.[iv]

While nobody knows precisely what direction the economy will take, it is prudent for governments to plan ahead for economic downturns. This is something state governments across the U.S. have figured out—yet Wisconsin still lags well behind most states in recession-readiness.

The recession of 2001

In order to understand what might await state government finances in the event of a recession, it is instructive to review the most recent downturn in 2001.

According to NBER, the U.S. economy went into recession in November or December of 2000.[v] This recession was the tenth such recession since World War II and followed a record ten straight years of economic growth. According to NBER, the previous record for uninterrupted economic growth was set in the 1960s, a period of eight years and 10 months lasting from February 1961 to December 1969.

The late 1990s delivered unprecedented economic growth and consumer confidence. The rise in internet-related stocks boosted Wall Street and the economy. Investors in the dot-com boom were making money and spending lavishly. As a result, state treasuries saw large increases in sales and income tax revenues.

In the 1990s, personal income of the average Wisconsinite grew by 57%,[vi] while inflation only grew by 32%.[vii] As a result, state revenues grew from $5.6 billion in 1990 to $10.9 billion in 2000, an increase of 94%.

Yale economist Robert Shiller believes that in many ways, the dot-com boom foreshadowed the housing problems of today. Shiller believes that the same irrational exuberance that caused investors to overvalue technology stocks has caused them to put too much faith in the value of their homes. As a result, housing is overvalued, partly driven by lowered credit standards.[viii]

Despite this large impact on the budget, many economists believe the 2001 recession was rather mild. According to Curt Hunter, Senior Vice President and Director of Research for the Federal Reserve Bank of Chicago, “the 2001 recession . . . was mild compared with other recessions,”[ix] and was short-lived by comparison. In fact, some believe that without the damaging effects of the September 11, 2001, attacks in New York City, the economic downturn may have been too mild to be considered a recession.[x]

This fact may lead one to ask: If the recession was so mild, why did it have such a severe impact on the Wisconsin budget? If a similar recession were to hit in 2007 or 2008, what would the effect be on the current Wisconsin budget? These questions will be addressed in the following sections.

Wisconsin’s history of weak fiscal mismanagement

There are several fiscal management tools used by state governments to mitigate the effects of economic downturns. Nearly every state has minimum statutory balances and budget stabilization funds from which to draw in the event of a shortfall.

In the years of strong revenue growth in the late 1990s, states were experiencing record ending balances (including stabilization funds). According to the National Association of State Budget Officers (NASBO), nationwide ending balances reached 10.4% of expenditures in 2000, and 9.4% in 2001. During the 2001 recession, states were able to draw on $25.8 billion of reserves to help balance their budgets. As a result, ending balances had been reduced to 3.7% of expenditures. Balances built up over the previous years served to ameliorate many of the budget problems caused by lagging revenue.

Following the recession in 2001, most states have gotten back on track in setting money aside in a budget reserve. In 2006, nationwide ending balances in state budgets had reached $62.1 billion, or 10.9% of expenditures. Increased revenue due to a growing economy has contributed to these new funds, as states have learned their lesson about the importance of setting aside money for emergencies.

But Wisconsin has not. Wisconsin remains one of only four states which retains a minimum statutory balance under 1% of expenditures. Wisconsin had ending balances of 0.4% of annual spending in 2006 and 0.6% in 2007, and has budgeted a minimum balance of 0.4% in the 2008 budget. This compares to a nationwide average of 8.2% in 2007.[xi] By the standard set by other states, Wisconsin’s government is running on fumes.

In November 2007, Standard and Poor’s downgraded the outlook for Wisconsin’s bonds from “positive” to “stable” based in large part on the state’s lack of reserves. According to S&P analyst Peter Block, “Any variation in revenue performance could produce relatively large funding gaps, which are not easily recoverable given existing resources.” Block added that while the state has taken steps to reduce its structural deficit, “we just don’t think they have the budget structure—which is a combination of revenues, tax structure, and level of expenditures—to achieve meaningful surpluses.”[xii]

The minimum statutory balance in Wisconsin

A minimum statutory balance protects the state from incidental revenue shortfalls or expenditure overruns within the current budget. The Wisconsin Legislature first passed a minimum balance requirement in 1981, requiring a balance of 1% of biennial expenditures. Yet before that legislative session expired, the requirement was lowered to 0.5% of expenditures. This was the first of many adjustments that minimized budget reserves. For the next four years the required balance fluctuated between 0.5% and 1% of expenditures.

In 1987-89 the minimum statutory balance was set at 1% of annual general purpose appropriations, where it remained until with minimal changes for a number of years. In the 1999-01 budget bill, Governor Tommy Thompson proposed a new graduated scale whereby the minimum balance would gradually be increased from 1% of annual expenditures to 2% over a period of five years. In the final version of the budget, the Legislature slightly altered the schedule, and completely eliminated the minimum percentage for 2001-02.[xiii] Fiscal management could not compete with other legislative priorities.

With enactment of the 2003-05 biennial budget, the scheduled minimum balances on a percentage basis were eliminated by Governor Doyle and the Legislature. They crossed out the targets of 1.6% and 1.8% for 2004 and 2005 and replaced them with flat amounts of $35 million in 2004 and $40 million in 2005. These balances were well below 1%. In the subsequent budget, the minimum balance was increased to $65 million through 2008-09 after which it was scheduled to become 2% of annual spending. Finally, the 2007-09 budget bill extended the $65 million figure for two more years, through 2010-11, and set the amount at 2% of annual spending thereafter. Through the years, budget reserves have been regarded as a luxury that governors and legislatures did not think they could afford.

It should be noted that the $65 million ending balance figure for 2008-09, at the end of the current biennium, equates to about 0.45% of annual appropriations, or roughly 0.23% of biennial appropriations. Hence, in the 28 years from 1981-82 to 2008-09 the ending balance requirement has gone from the initial 1% of biennial appropriations to effectively less than one-quarter of 1% of biennial appropriations. It’s somewhat depressing to realize that over the past quarter century the state’s required budget reserve has actually dwindled.

As can be seen above, the 2003 fiscal year was the last year in which the percentage balance standard was applied. Since then, minimum balances have been applied as a fixed dollar amount, which fall well short of 1% of gross appropriations. In fact, it is worth noting that the current $65 million minimum statutory balance is actually less than it was in 1984 when the balance was first enacted.

Budget stabilization fund

While minimum statutory balances protect states from short-term downturns, budget stabilization funds cushion governments from long-term revenue loss. According to NASBO, 47 states have some form of a budget stabilization fund. Nearly three-fifths of those states limit the size of their stabilization funds, usually setting them between 3% and 10% of appropriations. In most states, the fund is set up statutorily; however, in seven states the stabilization fund is mandated by the state constitution.[xiv] Furthermore, putting money in stabilization is automatic and is not reliant on legislative action. In most states there are heightened restrictions on how state legislatures may use the funds, such as requiring legislative supermajorities for appropriation.[xv]

In 1985, Wisconsin’s budget stabilization fund was created to “provide state revenue stability during periods of below-normal economic activity when actual state revenues are lower than estimated revenues.”[xvi] However, no funds were deposited in the fund until 1998, when State Representative Doris Hanson and Mr. Nathan Henry donated $10 and $2, respectively, to the fund.[xvii]

Governor Scott McCallum’s 2001 budget, introduced during the last recession, created a mechanism for funding the budget stabilization fund. Under McCallum’s budget, 50% of tax collections in excess of anticipated revenues were required to be deposited in the stabilization fund.

Under the new law, the moneys in the stabilization fund could only be used during a fiscal emergency. According to Wisconsin state law, a “fiscal emergency” occurs when “authorized expenditures will exceed revenues in the current or forthcoming fiscal year by more than one-half of 1% of the estimated general purpose revenue appropriations for that fiscal year.”[xviii]

The first transfer of money to the stabilization fund under this new law was made in September 2007, when the Department of Administration transferred $55.6 million to the fund. This is half of the revenue collected above the level anticipated when the 2005-07 budget was enacted.

When the $55.6 million stabilization fund and the $65 million minimum statutory balance are combined, Wisconsin’s budget still has total reserves of only $120.6 million, less than 1% of general fund appropriations.

There are several negative consequences resulting from carrying one of the lowest budget reserves in the nation. First, having no surplus leaves little margin for fluctuations in revenues or spending estimates. As has been the case over the last three budgets, the governor and legislature have had to take drastic actions to balance the budget, including fund transfers, delayed payments, and one-time funding. Each of these budget maneuvers exacerbates the state’s structural deficit.[xix]

While views of budget experts vary, an informal standard of 5% of general fund appropriations is generally seen as an adequate fiscal cushion for economic downturns.[xx] If Wisconsin were to reach the 5% standard, it would need to set aside $691 million in 2007-08 and have $710 million in reserve in 2008-09.[xxi] According to the 2007 Wisconsin Annual Fiscal Report, that would make the stabilization fund the sixth-largest single state appropriation, behind school aids ($5.2 billion), medical assistance ($1.7 billion), the University of Wisconsin System ($1 billion), corrections ($1 billion), and aids to local governments ($944 million).[xxii]

Between 2003 and 2007, insufficient revenue growth in the general fund prompted the governor and legislature to transfer $1.1 billion out of the state’s transportation fund and into the general fund. The resulting shortfall in the transportation fund was then replaced by bonding, which will cost state taxpayers more in the long term. Had the budget stabilization fund been funded adequately, this transfer and the related borrowing would not have been necessary.

Bond rating agencies consider budget reserves as an important indicator when rating the state’s debt. The combined effect of a high structural deficit and low surplus revenues may indicate financial difficulties to a bond rating agency. While the cost of borrowing for a state is largely driven by conditions in the bond market, a state’s rating can affect the price the state receives. The lower the rating, the more the state may have to pay for the bonds over the life of the term.

Is Wisconsin well prepared for a recession?

Given Wisconsin’s razor-thin margin for budgeting, an economic slowdown could cause significant problems for the state’s general fund. To estimate the impact of a recession on the Wisconsin budget, let’s examine how an economic slowdown similar to the 2001 recession would affect state revenue collections. State general fund revenues grew as follows during and immediately after the recession (after factoring out law changes which altered state tax collections):

2000-01:                                        0.1%

2001-02:                                        -0.1%

2002-03:                                        1.9%

2003-04:                                        4.9%

These revenue growth numbers can then be applied to the 2007-08 base year revenues.

First, let’s examine state government’s estimates for the next four years. Table 2 shows the revenues expected in the current budget and growth of 4.7% and 4.5% in the subsequent years as projected by Governor Doyle’s budget. Similarly, expenditures in Table 2 are the actual amounts budgeted for the current biennium and increases of 5.3% and 2.2% as projected in the Governor’s budget. Table 2 shows that in each year, the state budget would close the year with a positive balance.

Now let’s apply the recession scenario to these budget years. With revenue growth constrained as it was in the 2001 recession, the budget is quickly thrown out of balance. In this exercise, the hypothetical recession takes place in the 2008 fiscal year.

Table 3 shows what would happen if general fund revenues were to drop as they did in the recession of 2001.[xxiii] By the end of the current biennium, only eighteen months away, the state would face a shortfall of about $1 billion. By 2011, even if the deficits that arose each year were addressed, estimated expenditures would still outpace revenues by more than $1.3 billion.

Chart 1 graphically shows the gap between revenues expected for the next four years versus what those revenues would be if there was a recession of the depth of the 2001 recession.

As demonstrated in this exercise, even a mild recession could send the state’s finances into a substantial deficit. The disparity between revenues and appropriation would balloon to nearly $1.5 billion in fiscal year 2010, before closing slightly to $1.3 billion in 2011. The $50 million from the budget stabilization fund would barely dent the deficit.

The table and the related chart above show a negative balance at the end of fiscal year 2008. For the purposes of projecting the impact of a recession, it is assumed that the Governor and Legislature would act to eliminate the deficit each year—either by reducing spending or raising taxes. Thus, the negative balance is not carried forward from year to year. (Since it can’t be assumed that any positive balance would be created, no opening balance is shown for future years.) If the negative balances were carried forward, the resulting fiscal imbalance would be significantly greater.[xxiv]

The total magnitude of the problem the state would face in the event of a mild recession can be determined by adding together the deficit figures for all the years that would be affected by the recession. In the current biennium, the state would have to figure out how to cope with a total deficit of $1.359 billion—$352 million in the first year of the biennium, and $1.007 billion in the second year. Over the course of a four-year period, the deficit problem would total a whopping $4.185 billion. Table 4 details the cumulative problem if negative balances were carried over from year to year.

In the event this happens, the state has several options: it can raise taxes, cut programs, or continue the fiscal shell games that have produced structural deficits for the last decade. None of these choices are especially appealing. Yet the lack of any significant rainy day fund makes them inevitable.

Conclusion/recommendations

As demonstrated above, Wisconsin could be in serious trouble in the event of an economic slowdown. The state’s lack of a fiscal cushion is a recipe for tax increases and budget tricks in the event of hard economic times.

The state could take several steps towards fiscal responsibility in order to protect itself against declining revenue. Among them:

  • Phase in greater minimum statutory balance levels, ending with a balance of 2% of gross annual appropriations. For instance, start with a 1% balance one year, 1.2% the next year, 1.4% the next, until the balance reaches 2%. Under currently budgeted numbers, that would require setting minimum balances of $138.2 million in 2008 and $170 million in 2009.
  • Phase in a requirement that the state fund the stabilization fund up to 5% of gross appropriations. Require that the stabilization fund be the first draw on general fund revenue growth to the state.
  • Require that all unanticipated revenues be deposited in the state’s budget stabilization fund, until the fund reaches 5% of gross appropriations and compensation reserves. Current law only requires 50% of these revenues to be deposited in the stabilization fund.
  • Continue the requirement that the Governor introduce a bill to spend the stabilization fund and the minimum balance in the event of a fiscal emergency. Require a two-thirds majority of both the Senate and Assembly to appropriate these funds, to ensure that they don’t merely become easily accessible pools of money.
  • Initiate legislative action to make these requirements constitutional. As has been seen recently, statutory minimum balance and stabilization fund requirements are only as enduring as the commitment to prudent fiscal management. The Governor and Legislature have routinely suspended these requirements.

Sound financial practices should not be a partisan issue. Democrats should applaud having a fiscal cushion, because it will avoid sudden and drastic cuts in funding for core services in the event of a downturn. Republicans should be equally supportive, since rainy day funds avoid the pressure for increasing taxes and fees during a recession. Rainy day funds would also lessen the need for transfers from segregated funds.

It is time for Wisconsin to join the rest of the nation in planning for fiscal downturns. Wisconsin’s lack of foresight has led to a vicious cycle of bad budgeting practices and acrimonious budget sessions in recent years, and threatens to do so in the future should revenues recede.

 

 

[i] Rick Barrett, “Risk of Recession Jolts Wall Street,” Milwaukee Journal Sentinel, November 19, 2007

[ii] Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve System, testimony before the Joint Economic Congress, November 8, 2007.

[iii] Donald A. Nichols, “Economic Outlook for Late 2007 and 2008: Recession Likely,” Prepared for the Economic Outlook Conference: The Management Institute, School of Business, UW-Madison, September 14, 2007.

[iv] Nouriel Roubini, “The Biggest Slump in US Housing in the Last 40 Years…or 53 Years?,” RGE Monitor, August 23, 2006.

http://www.rgemonitor.com/blog/roubini/142759/

[v] Initially, NBER declared the recession to have begun in March of 2001, but later revised that estimate to extend it retroactively into 2000.

[vi] U.S. Department of Commerce, Bureau of Economic Analysis.

[vii] U.S. Department of Labor, Bureau of Labor Statistics.

[viii] Barron’s, “The Bubble’s New Home,” by Jonathan R. Laing, June 20, 2005.

[ix] William C. Hunter, Senior Vice President and Director of Research, Federal Reserve Bank of Chicago, Speech at the America Club Annual Economic Outlook Luncheon, January 10, 2002.

[x] Quote from NBER, Business Week, “Good News: Mild Recession: Bad News: Mild Recovery” December 10, 2001.

[xi] National Association of State Budget Officers, “The Fiscal Survey of States,” June 2007, p. 21

[xii] Yvette Shields, “Wisconsin Loses S&P’s Positive Outlook As It Readies $150 million GO Offering,” The Bond Buyer, November 15, 2007.

[xiii] The Governor’s initial budget proposed minimum balances of 1% in 1999-00, 1.1% in 2000-01, 1.2% in 2001-02, 1.4% in 2002-03, 1.6% in 2003-04, 1.8% in 2004-05, and 2% in 2005-06 and thereafter. The budget as passed by the Legislature required minimum balances of 1% in 1999-00, 1.2% in 2000-01, no requirement in 2001-02, 1.4% in 2002-03, 1.6% in 2003-04, 1.8% in 2004-05, and 2% in 2005-06 and thereafter.

[xiv] Legislative Fiscal Bureau Budget Paper #240, “Required General Fund Statutory Balance,” June 7, 1999.

[xv] http://www.ncsl.org/programs/fiscal/rdfaxa.htm

[xvi] LFB, “Required General Fund Statutory Balance.”

[xvii] Ibid.

[xviii] Wis. Stat. 16.50(7).

[xix] Wisconsin’s Constitution requires budgets to be balanced on a cash basis; however, there is often an imbalance between ongoing revenues and ongoing spending commitments in future biennia. This is known as the “structural deficit.”

[xx] National Association of State Budget Officers, “The Fiscal Survey of States,” June 2007, p. 21.

[xxi] According to the state budget passed in October 2007, gross general fund appropriations will be $13.8 billion in 2007-08 and $14.2 billion in 2008-09.

[xxii] Wisconsin Department of Administration, “2007 Annual Fiscal Report,” p. 9.

[xxiii] For a full explanation of the calculation of the 2001 recession see the full version of this paper, Wisconsin’s Subprime Budget Management at http://www.wpri.org/.

[xxiv] If the negative ending balances were carried forward from year to year, the gap between available revenue and spending would be $4.2 billion at the end of fiscal year 2011.

The Politics of Envy

Note: This article initially appeared on the WPRI Blog in August of 2007. However, during the 2008 presidential campaign, “you deserve health care as good as members of Congress” has become a standard talking point, so I thought it would be worth re-posting.

August 1, 2007:

Yesterday, State Senator Jon Erpenbach held a press conference on his “Healthy Wisconsin” universal health care plan to say… well, to say pretty much the same thing he’s been saying all along. His main talking point is that people should have health care as good as their state legislators. He calls legislators who oppose the plan “hypocrites” for accepting almost-free health care themselves, while “denying” it to their constituents.

Without a doubt, it is an effective talking point, given the low approval ratings of state elected officials. Erpenbach could have picked any number of state employees who take part in the state insurance plan as an example (UW Professors, DNR wardens, that guy sitting in a cubicle at the Department of Revenue), but he chose elected officials because they give him the most political bang for his buck. The calculus is pretty easy to work out: “Boo, elected officials!” “Yay, me!”

This line of thinking is intended to build public support for the proposal based on sheer envy. How is it rational to completely overhaul the state’s health care system because we’re jealous of something a few people have? Regardless of whether you think state legislators should have health care, is it really worth bankrupting the state to pull 5 million people in the state closer to those 132 legislators?

As long as we’re making public policy based on things a handful of legislators have, let’s go all the way. Can’t we guarantee that everyone in the state makes $45,000 a year, like they do? Can we make sure all Wisconsin residents get 32 cents per mile travel reimbursement to drive to work? I propose everyone in the state get a free parking spot on the Capitol square.

Unfortunately, if the Senate Democrats’ government-run health care plan passed, everyone would have similar health care. Unfortunately, both you and your state legislator would have similarly crappy health care. As has been discussed at length in other venues, universal health care means waiting lists, rationed care, and migration of sick people to Wisconsin to take advantage of the plan. So congratulations on having the same health care as your state representative – now go home and wait for three months for a doctor to see you about that cough.

Another aspect of Erpenbach’s rhetoric is interesting, as well. He claims that legislators who oppose his plan are “hypocrites.” Regardless of what you think of the plan or of legislators, I don’t at all see what’s “hypocritical” about wanting to keep the same system that provides the best health care in the nation to you and your constituents. That seems entirely consistent. In fact, the state teacher’s union (WEAC) spends a great deal of time lobbying to keep their system of health insurance intact, since it is run by the union itself. Are they hypocrites, too?

In fact, Erpenbach’s plan carves teachers out of the universal pool altogether – meaning, he thinks government-run health care should be mandatory for all Wisconsin residents – except for teachers, who happen to be his biggest supporters. Certainly no hypocrisy there.

So which is more hypocritical – a legislator defending the free market health insurance system, or a legislator using the lucrative health insurance benefit for 9 years, then deciding it’s evil when it’s politically expedient? Somehow, I don’t recall legislators complaining about their health benefits before this universal plan became an issue – and I wouldn’t hold my breath waiting for Jon Erpenbach to reimburse the state for covering him and his family since 1998.

So far, I’ve probably heard 20 different people use the “you deserve health care as good as your state legislators” line. It’s cheap and easy, and plays on people’s dislike of elected officials. But jealousy is probably the worst way to formulate public policy – any time you need to fall back on one of the seven deadly sins to push your plan, you may want to reconsider your public relations strategy.

-February 11, 2008

Leveling the Presidential Playing Field

For as long as there have been political campaigns, there have been critics of how those campaigns are financed. Good government groups deride campaigns that raise and spend bucketloads of money, fearing those campaigns have a leg up over their challengers. The more a campaign spends, they argue, the better chance the candidate has at winning an election. Apparently they believe there exists a “magic candidate” who is being held out of office for lack of resources, and they decry the undue influence of money on choosing our elected officials.

Perhaps they should purchase a newspaper.

In 2008, America will pick a new president. At this point, despite wildly disparate fundraising numbers between the candidates, nobody has a clue who the next chief executive will be. While some candidates are dropping money out of airplanes and faring poorly in the polls, others have caught fire while running their campaigns on food stamps.

The reason? Voters just might deserve more credit than they get from campaign finance reformers. In fact, the list of reasons candidates appeal to voters is long and varied – and financing often only plays an ancillary role. Fundraising doesn’t guarantee success. In sports parlance, there’s a reason they play the games.

In three years, Barack Obama has gone from being an Illinois State Senator to an even-money bet to be the next president. In doing so, he has stared down the political machine of a candidate whose name has been on the lips of American voters for 16 years, despite raising nearly $10 million less than Hillary Clinton.

With less fundraising prowess than the Clinton campaign, how has Obama surged to where he is now? The reasons are myriad. He’s attractive. He delivers thunderous, inspirational speeches that appeal to people’s hopes and dreams. He has the support of a slobbering press corps. And he has the backing of Oprah Nation.

Of course, all of these attributes tell us nothing about how he would govern as president. But they influence voters – some would say they provide undue influence on the electorate. After all – what’s the cash value of Oprah’s endorsement? A gazillion dollars? At the very least it, has to be as much as John Edwards’ entire budget for hair care products.

On the Republican side, Mike Huckabee has done for campaign finance reform what David Koresh did for Waco as a family vacation destination. While spending virtually nothing, the quick-witted Huckabee pummeled his Republican opponents in Iowa on a campaign of charm, Godspeak, and Chuck Norris jokes.

Conversely, former Massachusetts governor Mitt Romney has been printing his own money during the campaign, yet has been collecting nothing but humiliating losses as a result. In Iowa, Romney was pounded by Huckabee despite dumping millions of dollars on the state. Television station owners all across Iowa will be sending their children to Ivy League schools based on Romney’s generosity alone.

Romney suffered a similar fate in New Hampshire, only this time to John McCain. According to reports, candidates of both parties spent $23.9 million in television ads in New Hampshire – of that total, Romney spent $9 million. Yet McCain, who spent $3.6 million on TV ads, emerged with a convincing victory, which may just propel him back into being a legitimate contender. Rudy Giuliani spent $2.4 million on television in New Hampshire, yet barely beat out fringe candidate Ron Paul for fourth place.

All of these instances indicate that voters are picking their candidates for a variety of reasons – yet campaign spending doesn’t seem to be one of them. As for Mitt Romney and Hillary Clinton, they lack some of the influential qualities other candidates do have, and it’s just not fair.

This is why we clearly need regulations in place to have a truly egalitarian field for presidential candidates. Since issues are the only thing that should influence voters, we need to control for the other attributes that might unfairly sway voters away from a candidate who might not be so fortunate.

For instance, we need to eliminate Barack Obama’s good looks from the equation. From now on, Obama should be forced to wear a ridiculous, bushy fake mustache when he gives speeches. We’ll see if women voters are as enthusiastic about his message of hope when he looks like Borat. (Although, admittedly, he might earn my vote if he did so.)

Next, we need to equalize the market for celebrity endorsements. When Chuck Norris endorses Mike Huckabee, every other candidate in the field will be assigned a taxpayer-financed washed-up action star to serve as their campaign spokesman. Jean-Claude Van Damme, we need your cell phone number – looks like John Edwards is cratering!

Under my plan, candidates will be barred from playing instruments while on the campaign trail. Everyone remembers Bill Clinton’s thrust in popularity after he played the saxophone on late night television. Mike Huckabee recently showed up on Jay Leno playing the bass guitar. (Less memorable was Steve Forbes’ performance of Black Sabbath’s “Paranoid” on the triangle.) Whether a candidate can play a few notes on an instrument doesn’t tell me what I need to know about their position on CAFTA.

Finally, we need to get rid of all these troublesome catchwords that seem to be getting people so excited. Obama should be limited to two uses of the word “hope” per speech. Huckabee should only be allowed to refer to God as “the man who lives in the clouds,” and will be limited to using the following joke, written by my four year-old daughter:

Q: “What did the fish say to the seaweed?”

A: “Fish can’t talk!”

All of these important reforms will give real people a chance to run for office. Real ugly, dull, uninformed people.

Then again, maybe we should just recognize that voters are smarter and more complex than we have given them credit for. Maybe the things we think influence their votes, like “excessive” campaign spending, aren’t really all that important. Perhaps citizens see through campaign ads and pick their elected officials on actual substance.

Undeterred, good government groups in Wisconsin forge on with their plans to use taxpayer money to solve the fundraising “arms race” that leaves some candidates with more money than others. These groups believe candidates raise money, which makes them more viable. In fact, they have it exactly backward – it is the best candidates that are able to attract contributions once they have demonstrated their electoral worthiness. What they do with their funds at that point is their own business – and quite often doesn’t mean victory. Until we can control for all the variables in a campaign, some candidates will continue to have natural advantages that appeal more broadly to voters.

-January 10, 2008

UPDATE: Originally, this column suggested Charles Bronson as the go-to washed up action star. Unfortunately, it appears that Bronson has been practicing his own vigilante brand of justice in heaven since 2003. RIP.

The Government Protection Racket

In the late nineteenth century, a cowboy rode into a water-drilling camp in Odessa, Texas. The cowboy immediately demanded some food from the cook, described as a “chinaman.” The cook refused, so the cowboy shot him to death. The cowboy went on trial in San Angelo, but the judge freed him on the grounds that there were no laws on the books making it illegal to kill a Chinaman.[i]

It was racial injustice that led Congress to pass the Civil Rights Act of 1866, which required that “citizens of every race and color … [have] full and equal benefit of all laws and proceedings for the security of person and property.” This new law was immediately followed by the Equal Protection Clause of the Fourteenth Amendment to the U.S. Constitution, which forbid states to “deny to any person within its jurisdiction the equal protection of the laws.”

Those looking for equal protection of person and property in Wisconsin, however, may want to keep looking. In cases of battery and assault, Wisconsin state law carves out special classes of individuals to which it grants heightened punishment for their assailant. Chances are you aren’t eligible for this “super-justice” standard, since these protections are largely reserved for the most enlightened and indispensable of our citizens. Namely, government employees.

For battery, substantial battery, and aggravated battery, punishment under Wisconsin law ranges from a Class A misdemeanor to a Class E felony, depending on the severity and intent of the beat-down. But the penalties go up if certain protected individuals are the victims. In almost all cases, these stiffer protections are granted to government workers, presumably to provide more of a deterrent. Put simply, a “private sector ass-kicking” is clearly something you want no part of.

It makes sense for some of these individuals to be granted heightened protection. For instance, police officers and firefighters are put into harm’s way by laws implemented to protect us – it can be argued that bumping up the penalty for assaulting them is reasonable. (Who are the people who go out of their way to assault firefighters – people who insist that their house be allowed to burn to the ground?)

But the list goes on – and it smacks of a Sopranos-style government employee protection racket. Causing bodily harm to an elected official (“public officer”) will get you an immediate felony, no matter the severity of the “fist blizzard” you deliver. Same goes for causing bodily harm to a “school district officer or employee” or anyone who works at a technical college. If you work as a teacher in a private school, you’re out of luck – if you’re assaulted, the perpetrator could receive a fraction of the penalty they would get had the attack taken place in a public school. Clearly, the value of your security isn’t as much of a priority for the state.

If you’re looking to beat someone up, it’s probably in your best interest to steer clear of public transit. It is an instant felony to cause bodily harm to a public transit vehicle operator, driver or passenger. Somehow, the Legislature has deemed certain people worthy of enhanced protection under state law, as long as they just happened to be riding on a government-owned bus.[ii] (Incidentally, if you’re riding in some form of private transit, don’t expect state government to allow you to protect yourself, either.)

Curiously, the law then extends greater legal protection to Department of Revenue, Department of Commerce, and Department of Workforce Development employees and their families. In fact, these government workers are provided protection from threats, which is even more protection than police officers get. Are these people under any serious threat of assault and battery? Are we expecting gang-style warfare to break out between the people who review our tax returns and the people who collect child support payments? Despite not being in any more danger that you are at your job, these people have one thing that you don’t – the respect afforded to government workers by the Legislature. The private sector might as well not even exist.

It’s always tricky business for the government to start ascribing value to individuals’ legal protections. What makes one person’s safety more legally desirable than the safety of anyone else? How is it that the penalty dealt to your assailant depends on where you happen to work?

For example, the law also provides enhanced protection to emergency medical care providers, including “an employee of a hospital who works in an emergency department.” Certainly, some EMTs are in sensitive situations that may merit protection. But how is it that people working in one wing of a hospital deserve greater legal protection than those working right down the hall? One would think that patient anger is a universal reality among all health care providers. Where do we draw the line between who deserves protected status and who doesn’t?

Currently, there’s a bill working its way through the Legislature that would provide harsher penalties for assaulting a district attorney (judges are already on the endangered species list). Naturally, public defenders are now claiming they should have the same special status – presumably to protect them from being assaulted by a client that they are trying to get off the hook for assaulting some poor sucker like you.

Furthermore, it’s not even clear that these enhanced penalties do any good. Does a criminal really make a rational decision not to assault a police officer based on the fact that he may be charged with a Class H felony instead of the standard Class A misdemeanor? More likely, he chooses not to fight an officer because of the impending rectal boot removal surgery that will probably follow his transgression. In fact, violence against police officers is almost certainly more attributable to the drugs that the suspect is on, rather than any law on the books.

If the concept of “equal protection of the law” means anything, it has to mean that citizens should receive the same level of justice as anyone else for a crime committed against them. Someone who punches out a Department of Commerce worker shouldn’t get six years in prison, while the same act against an insurance salesman only brings nine months in the joint (as is currently the case). Unfortunately, some people are eligible for more justice based on where they happen to draw their paycheck.

The lesson here is obvious – if your son or daughter is going to be a victim of assault, make sure they’re riding a bus.
[i] This story was told by novelist H.G. Bissinger in his book “Friday Night Lights,” in a section where he discusses the history of Odessa, TX.

[ii] In fact, the protection for public transit riders extends beyond the bus. Under Wis. Stat. 940.20(6), the enhanced penalty applies if “the harm occurs after the offender forces or directs the victim to leave a public transit vehicle.” So because a bus merely served as a meeting place for an assault that took place much later, the heightened penalty still applies.

Want to Pass a Bill? Get a Good Mascot

In 2005, the Monster was born. Wisconsin Governor Jim Doyle had just used his powerful budget bill veto pen to turn a proposed stoplight in the Village of Oregon into “The Department of Administration can spend $427 million any way they want.”

Immediately, state legislators began to realize how the Governor’s partial veto power upset the balance of power between the branches of government. The Governor’s ability to cherry pick parts of sentences to create laws never intended by the legislature usurped their ability to speak for their constituents.

In July of 2005, senate staffers met to figure out how to pitch a constitutional amendment to correct this veto practice by the governor. I was among them. I had already been over to the Legislative Reference Bureau library and researched the legislative history of proposals to rein in the governor’s partial veto. We decided we should re-introduce a 1991 joint resolution authored by Democrats during the Tommy Thompson administration – many of whom were still in the legislature. This would pressure Democrats into passing it. If we changed a word of the resolution, Democrats could argue we were changing the intent of what they originally proposed for a Republican governor. The resolution, as written fourteen years earlier by Democrats, prohibited the governor from using parts of sentences to form a completely new sentence – exactly what Doyle had done in the most recent budget.

The next step was coming up with a hook – something that the press and constituents could understand. As noted, efforts had been made in the past to do what we were trying to do – to little avail. Somehow, “altering the governor’s partial veto authority” hadn’t exactly set the public’s imagination on fire. After a brief brainstorming session, we settled on calling it “The Frankenstein Veto,” as the practice created monstrous new laws by stitching together old sentences. We shopped the idea around to other senate offices, and they agreed to use it (although Senator Scott Fitzgerald demanded the ability to pronounce it “Fron – ken –shteen,” as they do in the Mel Brooks movie.)

My boss at the time, Senator Harsdorf, was very hesitant to use the term. She’s a wonderful legislator, but also very serious about her work. She was justifiably wary of this serious bill becoming too cartoonish. I jokingly offered her a dollar for every time she used the term. Slowly, she started to come around.

On July 30th, a column by Mike Nichols appeared in the Milwaukee Journal-Sentinel that used the term publicly for the first time. A Lexis-Nexis search shows that the term has been used in the Journal-Sentinel and the Wisconsin State Journal 178 times since then, in large part due to a crusade by the State Journal to outlaw the practice. The “Frankenstein Veto” has been featured in editorial cartoons and news reports for the past two years. Somebody showed up at the public hearing on the amendment dressed as Frankenstein’s monster – I actually went to a Halloween party where someone went as the “Frankenstein Veto.” Wisconsinites from Amery to Wyocena were starting to understand the concept of the partial veto. As a result, the amendment is poised to pass the State Senate early next year and go to the voters for approval – something that was incomprehensible just two years ago.

The lesson in all this is the following: If you want a bill passed, give it a mascot. People may be slow to understand the intricacies of the governor’s veto authority, but they certainly understand how Dr. Frankenstein breathed life into his monster.

Perhaps the most telling indication of the success of the “Frankenstein” term is how it is now being misused. As noted, the amendment applies to a very specific use of veto authority – stitching together words to form a new sentence. There are still options for the governor to use, such as vetoing words within a sentence to change the meaning of the sentence. Yet because the current proposed amendment doesn’t change that practice, some have said that it doesn’t “kill Frankenstein.” Interesting that they would presume to tell the authors of the bill what their own term means.

In fact, when the legislature gets around to prohibiting the governor from punching holes within sentences by vetoing individual words, I have a few suggestions:

The “swiss cheese” veto

The “donut hole” veto

The “Mike Tyson Punch Out” veto

In fact, the whole mascot trend could help both parties, if they took a cue from Smokey the Bear, Mr. Yuk, and the AFLAC Duck. Who could say no to funding the “domestic partner benefits kangaroo,” or supporting the “end partial birth abortion lemur?” You think the legislature could have turned down the Taxpayers Bill of Rights had it been represented by an alligator wearing sunglasses? Think again. Of course, once every cause has its own mascot, the good government groups will demand legislation seeking to lessen the influence of cartoon beavers on the legislative process.

 

When Government is Bad, it’s Even Better

As Wisconsin residents, there are a few things all of us can agree on. We hate toll roads. We love the Packers. We think people from Illinois smell like oatmeal.

Equally as important, everybody hates government. Mention “the government” to any of your friends and watch in delight as their face crinkles up as if they just swallowed a AA battery. Even people who are normally dependent on the government for their livelihood have sour feelings about it – either their checks get there late, aren’t enough, or relegate them to a life on a “fixed income” (as opposed to the “unlimited income” most of us enjoy.) In fact, a lot of people likely don’t like government because they don’t think government is solving all their problems quickly enough.

How is it that government can be so universally reviled? Since our government is supposed to help us, why does it have a favorability rating slightly below that of arsenic?

It’s because so much of government is bad. Really bad. And that can be good.

For people who support limited government, there is no better advertisement for what government can’t do than what government currently manages not to do. The government itself has managed to accomplish what it would take a high-powered Fifth Avenue advertising agency millions of dollars to do – universally convince people of its own ineptitude.

It is this universal contempt for government that can actually provide the impetus to prevent new programs from being instituted. While it is easy to tally up the cost of current ineffective government programs, it is much more difficult to calculate the countless dollars saved by preventing bad programs from ever becoming law. While nobody likes wasting $25 million on a University of Wisconsin computer system that will never work, that money was ultimately put to good use – in convincing people how incompetent government can be.

This summer, Wisconsin Senate Democrats attempted, on short notice, to install a costly government-run universal health care program into the state budget. No doubt the Democrats thought this would be a big political winner. Yet the stink of “big government” soon reared its head, and Wisconsin citizens began to realize that their health care would soon be in the hands of the same people who run the DMV. Polls showed that the more citizens learned of the government’s involvement in the plan, the less inclined they were to support it. Bad government scores one for the taxpayers.

Furthermore, bad government often propels the need for more innovation. If the Milwaukee Public Schools had been competent in educating its schoolchildren, the Milwaukee School Choice Program would have never evolved. In essence, it took parents to learn what government couldn’t do for them before they realized what they could do for themselves.

Unfortunately, the downside of bad government is that it never goes away. Despite the general anti-government feeling among citizens, each wasteful program has its own constituency. So while the odor of big government may help prevent new programs from being instituted, it doesn’t do much to affect the programs we’re already stuck with. And when damaging programs such as welfare and forced busing are instituted, they takes decades to be undone.

Additionally, the idea of “good government” is an oxymoron. Asking government simply to to “do better” is like asking a frog to solve a Rubik’s Cube. Inefficiency is part of government DNA. Government exists solely because it doesn’t have to respond to market forces like private industry. Except when private businesses fail, they go out of business – when government fails, it pleads for more money. As a result, government doesn’t care whether you get your check on time, it doesn’t care how inconvenient it will be for you to move your house back three feet from the shoreline, and it doesn’t care that you only get a half hour for lunch to renew your driver’s license. In fact, if you take a number and have a seat, government will be right with you.

Yet it always helps that people are reminded of how poorly government works. How many times have you interacted with government at any level and left saying “yeah, those people deserve a lot more of my money?” Bad government serves as a lesson to those elected officials who are still deluded into thinking that government can solve any of our social ills. And for that, it deserves our thanks.

NOTE: A special thanks goes out to the Mount Rushmore of government ineptitude – the Hurricane Katrina rescue effort. Because of you, advocates of smaller government have all the ammunition they need for decades to come.

Businesses: Victims of their Own Success?

There’s an old workplace maxim that I have always found useful: Don’t do anything well, as you’ll get stuck doing it forever. If you’re the one guy enthusiastic about stuffing envelopes, then congratulations – you’ll have paper cuts until you quit. If you brag about your sweeping skills, there’s a 100% chance you’ll get to show them off. Forever.

Businesses in Wisconsin are faced with a similar dilemma, but for slightly different reasons. Businesses often become victims of their own successes. If you produce a popular product that becomes necessary to the everyday lives of Wisconsin citizens, suddenly you become the enemy for attempting to profit. Never mind that the motive for profit is probably the reason you started the business in the first place – once people want your product bad enough, you become the bad guy. After all, how dare you charge customers a price they are perfectly willing to pay for something they value? Expect to be taxed to the point where customers stop buying your product, or expect the government to come in and take over your operations.

Certain business sectors have come under fire for being too successful in providing services. You all know what they are. But what is the alternative? Don’t like $3 a gallon gas? Here’s a shovel, start diggin.’ There’s oil down there somewhere. Don’t like pharmaceutical companies? Here’s a lab coat and a Bunsen burner – you should have a cure for grandma’s Alzheimer’s figured out in no time – right after you learn how to hook up your DVD Player.

Surely, not all business owners are wonderful people with hearts of gold. Yet they deserve more credit than blame for the services they provide the public. Wisconsin politicians are constantly attacking businesses for profiting on practices the elected officials deem so necessary – without realizing what would happen without the business there to provide it. Does anyone actually believe health care will improve if we tax hospitals more?

These politicians often confuse “self interest” with “selfishness.” Of course, we all act in self-interest. It’s why we wake up in the morning, brush our teeth, and go to work. We want to make money and better our positions in life. Businesses also act in their own self-interest. They want to make money and be successful – but in the process, there’s also a side benefit in the employment they offer their workers. (Although, admittedly, your job is hard to view as a “benefit” if you have a cranky boss.) In this respect, the business’ self-interest helps the individual workers pursue their own interests.

On top of their battles with government, businesses also must compete with each other. Company profits are dictated in large part by the profits of their competitors. Recently, Netflix announced plans to drop their monthly rates by $2, in response to Blockbuster’s nascent DVD-by-mail operation. A liberal would be angry at Netflix for “gouging” consumers all these months – while a conservative would recognize that the market is working and keeping prices down. In this case, competition has become a check on Netflix’ “excess profits.” And in the end, anything that can get Borat into your hands for two bucks cheaper is a big winner for everyone.

Often times, business innovation betters the lives of everyone in Wisconsin. They convince us that something new is something we can’t live without – and sometimes, they are proven right. By attacking their successes, we dissuade such innovation in the future – which is in no one’s self-interest.

Fire Your Legislators

So-called good government groups in Wisconsin are eternally hyperventilating about the unfair advantage fundraising gives incumbent candidates. They complain that sitting elected officials can use their office to build excessive warchests, which makes them invulnerable come election time. Generally, their answer is to fund campaigns with taxpayer money and limit total campaign expenditures.

When these groups obsess about campaign fundraising, they miss some very real advantages incumbent legislators have over challengers. Yes, it is difficult for a challenger to raise funds like a sitting legislator – but with the party fundraising system currently in place, viable challengers will get the cash they need to run a campaign.

The real benefit of incumbency comes not in the ability to raise money, but the enormous advantage legislators have in how we structure their work schedule. Essentially, taxpayers pay their legislators to campaign for eight months every two years. On March 13th of 2008, legislators will walk out of the Capitol having completed the 2007-09 biennium. Between March and November, they will be free to do all of the campaigning they want – going door to door, making fundraising calls, and attending church fairs. The entire time, they will be collecting a state paycheck and benefits.

On the other hand, think of someone looking to challenge one of these incumbents. If I own, say, a print shop and want to challenge Senator Schmoe for her Senate seat, I essentially have to quit my job for five months to do all the campaigning I would need to do to be competitive. There’s no way I could do all the retail politics I needed to in my off hours to compete with the incumbent – who is free to do whatever they want during regular work hours. Even if I tried to maintain my job while running for office, it would virtually guarantee that I wouldn’t see my family until election day. These are huge disincentives for successful businesspeople to run for office in Wisconsin.

The answer? Fire our legislators from March through November of campaign years. Let’s see if they can manage running a campaign and holding down a job at the same time, rather than having the taxpayers pick up their salaries during campaign season. This is what their prospective challengers have to endure. Think about how crazy this situation is for Assembly representatives – we pay them salaries for 14 months to do actual legislative work, then pay them for 10 months for them to convince us that they should be back for another two year term to do the same thing.

Another major advantage enjoyed by legislators is the way they get to utilize their office as an incumbent. Elected officials get to flood their district with political newsletters and other mailings, as well as sending out hundreds of the state “Blue Books” (the state almanac).

Certainly, communicating with constituents is an important part of a legislator’s job. If someone in their district needs assistance, it is their job to help. The Legislature is budgeted to spend $141 million over the next two years, with a portion of that dedicated to mailing newsletters that are essentially campaign materials – they list all the representative’s legislative accomplishments, complete with photos and phony questionnaires. Again, taxpayers are picking up the tab to be told how great their incumbent elected official is.

There’s very little taxpayers can do to limit the office expenses of their representatives. Furthermore, name recognition from being in office is one of the unavoidable spoils of getting elected in the first place. But what we can do is make these expenses more transparent. Take the State of New York, for instance – their state law requires all their legislators’ expenditures be compiled in a single book, which is then distributed to the public. The media and public get a chance to see who is spending what in their office budgets – including mailings, phone calls, and travel expenses. Such a process in Wisconsin would begin to shine some light on which legislators are using taxpayer money to gain political advantage.

In recent years, the media have been running around like their collective hair is on fire at the prospect that there might be politics going on at the Capitol on state time. Yet right under their noses is a framework that dissuades good people from running competitive campaigns and gives incumbents significant advantages. While many legislative seats are simply non-competitive, some simple changes can level the playing field for those that are in play. And it won’t require taxpayers picking up the tab for campaign ads.

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