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  • How to fix a bad budget

    June 24, 2019
    Wisconsin politics

    The first thing to do when commenting on finances is to get the numbers right.

    So the MacIver Institute compares and contrasts:

    The Legislative Fiscal Bureau has released its summary comparing  Gov. Tony Evers’ 2019-21 budget proposal with the package passed by the Joint Finance Committee (JFC) last week. The Assembly also scheduled its budget floor vote for Tuesday, June 25. Take a look at the charts below, which compare the previous 2017-19 budget (also known as the “base”) with the Evers and JFC proposals. This post will become updated as more information is available.

    Clearly the JFC budget, flawed as it is, is vastly preferable over Evers’ budget. However, the JFC’s budget still grossly overspends. There is no problem in this state that justifies the state budget’s increasing 5.6 percent (all funds) or 6 percent (general purpose revenue). This state is growing less than 0.4 percent per year in population, and the Consumer Price Index rose 1.9 percent in 2018, which means that costs of state government should not be increasing to the extent the JFC wants to spend, let alone Evers’ left-wing wish list.

    Next, Ola Lisowski suggests budget fixes:

    Last week, the Joint Finance Committee (JFC) completed its work on the 2019-21 biennial budget, originally proposed by Democratic Gov. Tony Evers in February. The Assembly and Senate will vote on the document by the end of the month. While we’re all ready to swap our business suits for swim suits, Wisconsinites are relying on the Legislature to pass a responsible, taxpayer-friendly document. The following 10 ideas would improve the JFC budget.

    1. REDUCE BONDING TO WALKER-ERA LEVELS.

    The government shouldn’t be putting more expenditures on its credit card. Wisconsin has a strong economy that has led to impressive surplus revenue. If there is a need to increase spending, the state should pay for it directly and not increase borrowing.

    2. GET RID OF THE MILEAGE MONITORING STUDY.

    This is a Big Brother idea that should frighten every taxpayer. No one needs big government monitoring every mile they drive, every turn they make, like a big brother riding shotgun. This is the type of heavy-handed government oversight we don’t need or want. To make matters worse, the provision would allow the JFC, rather than the full Legislature, to approve this future taxing plan. That’s taxation without representation, and the entire Legislature should have to vote on an issue like this. And another thing – DOT has spent millions of dollars on various studies in the last 10 years. The audit told us what we need to know. Let’s stop wasting money on studies and implement real changes.

    3. IMPROVE TRANSPORTATION WITHOUT REVENUE RAISERS.

    The Legislature is clearly hell-bent on giving the DOT more money to “just fix it.” If lawmakers are determined to give DOT more of our hard-earned cash, they should couple the funding increase with simple ideas to make each project more accountable and cost-effective. Better data reporting is one option. Local governments should report how much road work they perform each year and how much money they spend doing it. Design-build contracts would also be a great start, and a pilot program is already included in the DOT package. Unfortunately, the pilot is limited to six projects, at $250 million total, to be completed by the end of 2025. The 2017 DOT audit recommended design-build contracts – so let’s go ahead and use them to their fullest ability rather than limiting them. The Legislature should consider pulling out the “pilot” part of this provision. The state’s gas tax could also be required to go only toward road construction or maintenance projects, to ensure it isn’t wasted on cosmetic changes or other costs only remotely related to actual road construction. Oversight of single-bid projects is also clearly needed. Since Craig Thompson was named DOT secretary-designee, the state has awarded 58 single-bid contracts worth $309 million.

    4. END THE STEWARDSHIP PROGRAM.

    This budget continues authorizing the Warren-Knowles Gaylord Stewardship Program through 2022, with spending allotments of $33 million per year, plus another $42.6 million in bonding authority. Total bonding authority is already over $1 billion. In 2019, the state has spent $81 million repaying debt for this public land grab. The program, which began in 1999, was originally authorized for 10 years, but is regularly renewed. We simply don’t need an expensive government program that buys and holds land while paying for it with a credit card.

    5. CUT ALL PORK.

    A biennial budget isn’t where the state should hand out pet projects for different lawmakers. The Republican-controlled Joint Finance Committee budget, subject to approval by the full Legislature and the governor, includes $2 million to replace an underwater electric line to Washington Island. The earmark was requested by Sen. Andre Jacque (R-DePere)  and Rep. Joel Kitchens (R-Sturgeon Bay), and it forces state taxpayers to bail out a local electric cooperative.  The city of Kaukauna, home of Assembly Majority Leader Jim Steineke,  is poised to receive more than $1 million in a matching local bridge assistance program grant in 2019-20. Kaukauna Mayor Tony Penterman in a statement said a U.S. Coast Guard’s order demanding the lift bridge be operational by May 2021 put “local taxpayers on the hook for a hefty bill.” Now, state taxpayers are on the hook for Kaukauna’s old bridge. Marinette Marine, in Rep. John Nygren’s Assembly district, stands to receive $1 million, approved by the Finance Committee Nygren co-chairs. And the JFC budget includes $1 million for renovations to the Campground Shower Building at Yellowstone State Park in Lafayette County, in the district of Sen. Howard Marklein (R-Spring Green), also a JFC member.

    6. REQUIRE CHANGES IN THE CAPITAL BUDGET PROCESS.

    Right now, entities like the University of Wisconsin System drive the process of setting prices for new buildings, submitting their own budgets and requests. There’s little to no oversight of the first ask and there is no incentive to keep costs low. In this case, taxpayers pay for state employees to lobby the state itself to ask for more taxpayer money. It’s tantamount to giving the System a blank check. We will never get cost-effective solutions under a process like this.

    7. GET THE GOVERNMENT OUT OF BROADBAND.

    This budget spends $44 million in federal dollars for broadband access grants. Broadband access is a robust industry with plenty of market players and plenty of private sector-led options. A competitive industry like this one doesn’t need state interference. Where the government enters, it will never, ever leave.

    8. STOP ADDING AUDITORS TO SHAKE DOWN SMALL BUSINESS; SPEND MORE TIME AUDITING THE GOVERNMENT.

    The budget is partially built on $137 million in new revenue that several dozen more auditors are expected to find. These are new government employees that will shake down small business owners. Those auditors should spend time auditing the government itself – we know how much waste was found in the DOT audit alone. Every last agency should be treated the same way.

    9. PUT MORE MONEY INTO THE RAINY DAY FUND.

    The economy is strong now, but a slowdown is inevitable. If we’re spending all this money, we need to make sure we aren’t put in a serious budget hole the next time we face a downturn. There’s a big spender in the East Wing now, and we shouldn’t be surprised to find that any new money the government gets will be spent faster than ever. Evers can’t do anything to the Budget Stabilization  or “rainy day” fund without legislative approval, so it would be a safe place to put surplus revenue.

    10. CUT SPENDING WHEREVER YOU CAN.

    JFC stripped approximately $5 billion in new spending proposed by Evers. That’s good news for taxpayers … until you realize it means JFC approved close to $2 billion in new spending. Very little of the new spending – such as the half-billion dollar increase to education – comes with oversight or accountability. Conservatives have said they want to pass a budget they can be proud of. In this light, it’s important to think back to the Walker years. The Republican’s first budget, for 2011-13, spent $64 billion across all funds. His last budget, for 2017-19, tipped the scales at $76 billion. Even with a conservative in office, government spending continually grew. That’s why it’s up to the conservatives in the state Capitol to keep holding the line.

    My wish for this budget is that no one passes any budget. That would create a budget crisis in the minds of only those liberals and their apparatchiks in the news media. For the rest of us in the world of reality. state spending in the 2019–21 budget cycle would continue as it has in the 2017–19 budget cycle, which would not be a bad situation.

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  • Presty the DJ for June 24

    June 24, 2019
    Music

    Proving that there is no accounting for taste, I present the number six song today in 1972:

    Twenty years later, Billy Joel got an honorary diploma … from Hicksville High School in New York (where he attended but was one English credit short of graduating due to oversleeping the day of the final):

    (more…)

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  • Presty the DJ for June 23

    June 23, 2019
    Music

    Today in 1956, perhaps the first traffic safety song, “Transfusion,” reached number eight:

    Today in 1975 was not a good day for Alice Cooper, who broke six ribs after falling off a stage in Vancouver:

    Today in 1979, the Knack released “My Sharona”:

    (more…)

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  • Presty the DJ for June 22

    June 22, 2019
    Music

    Today in 1959, along came Jones to peak at number nine:

    Today in 1968, here came the Judge to peak at number 88:

    Today in 1985, Glenn Frey may have felt the “Smuggler’s Blues” because it peaked at number 12:

    (more…)

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  • 50 years of bad baseball

    June 21, 2019
    Brewers, History, Sports

    No, this blog isn’t about the Brewers.

    It’s about their predecessor and that team’s replacement, as Art Thiel reports:

    The Mariners Saturday will be acknowledging, or commemorating — “celebrating” doesn’t seem quite the right word — the 50th anniversary of the 1969 Seattle Pilots, the awkward runt of MLB that lasted a single season. Enough time has passed that the criminal ineptitude of the operation now seems more like a childhood prank on the order of stuffing Aunt Thusnelda’s wig down the toilet.

    To salute whatever that was, the Mariners are staging another Turn Back the Clock event ahead of the 1:10 p.m. Saturday start of the game against Baltimore. The players will wear Pilots uniforms and the first 20,000 fans will receive a replica cap, complete with the “scrambled eggs” trim on the bill.

    Sadly, there is no scheduled appearance for buccaneer Bud Selig, the Milwaukee car salesman who in 1970 bought the Pilots out of bankruptcy for $10 million and made them the Brewers. If the ceremony included placing the early-day Clay Bennett in a dunk tank at home plate, a sellout would be guaranteed.

    Alas, the best participant witness they can summon is Gary Bell, who pitched a complete-game, 7-0 win over the Chicago White Sox April 11, 1969, the Pilots’ first home game at Sicks’ Seattle Stadium in Rainier Valley. It was the harbinger of nothing.

    Now 82, Bell, who had his 12th and final MLB season in Seattle, will throw out the ceremonial first pitch. That will generate hundreds of lame jokes about his joining the Mariners’ current rotation. Then everyone can sit back and enjoy bags of popcorn at the 1969 price of 50 cents, the club’s magnanimous financial/nutritional instant ritual to reconnect with the ancients.

    It is too bad the promotion doesn’t include distribution of copies of Ball Four, the seminal book by Pilots pitcher Jim Bouton that ripped the skin off the game and became one of the turning points in 20th century American sports journalism/literature. Much of the book was Bouton’s bemused reflections on the hapless Pilots and the tawdry customs and characters that populated America’s then-most popular sport.

    Bell’s appearance Saturday evokes the irreverent mention of him by Bouton in the book:

    Gary Bell is nicknamed Ding Dong. Of course. What’s interesting about it is that “Ding Dong” is what the guys holler when somebody gets hit in the cup. The cups are metal inserts that fit inside the jock strap, and when a baseball hits one it’s called ringing the bell, which rhymes with hell, which is what it hurts like. It’s funny, even if you’re in the outfield, or in the dugout, no matter how far away, when a guy gets it in the cup you can hear it. Ding Dong.

    It’s funny, unless you’re Mitch Haniger. But we digress.

    The larger narrative Saturday is that the Mariners are offering up something beyond Bell, hats, popcorn, video and music of yesteryear (yes, there will be an organist playing live).

    They are offering the 2019 season as a replica of the 1969 season. It may be a reverence for history unparalleled in the annals of sport.

    The Pilots finished 64-98, 33 games back of the division lead, thanks in part to the terms of expansion regarding player acquisition that left them largely with castoffs and unproven youngsters. The under-capitalized team drew 677,944, 20th among 24 MLB teams, thanks in part to a hastily renovated minor-league ballpark that opened with only 19,500 seats, some of which were still damp with fresh paint, and tickets priced among the highest in baseball.

    The 2019 Mariners are operating under no similar constraints.

    The franchise, originated from a settlement of a lawsuit over the Pilots departure that was destined to prove the American League team owners to be a gang of scofflaws, scalawags and brigands, is owned by prosperous members of the community. They operate a vast regional monopoly with its own TV network in a spectacular, rain-proof stadium funded by taxpayers, who once gathered in sufficient numbers (3.5 million in 2002) to lead all of MLB in attendance.

    All of these advantages that have accrued over a half-century put the lie to the claim from many critics in MLB, from the 1960s through the the mid-1990s, that Seattle was a bad baseball town. It was, instead, a town of bad baseball.

    Then. And now.

    Entering Wednesday’s games, the Mariners were 31-46, a winning percentage of 40.3. Maintaining that pace for the balance of the 162 games would give the Mariners a 65-win season.

    Again, the Pilots won 64. As did the Mariners in 1977. Both were first-year expansion teams.

    If the Mariners fall off their their current languid pace just a tick — the pending trades of starter Mike Leake and other older veterans with a lick of value makes the proposition seem likely — they can match the win totals of predecessors from long ago.

    The case can be made, then, that the 2019 outfit is tantamount to Seattle’s third expansion baseball team. Given the number of World Series appearances in the half-century (zero), the 3/0 ratio is one of the more astounding counting stats in baseball history.

    The regression makes clear they are Benjamin Buttons of Baseball.

    The difference between then and now is, of course, intent. The 1969 Pilots and 1977 Mariners didn’t want to be bad, but were crippled by outside circumstances. The 2019 Mariners, despite benefiting from the accrued advantages mentioned above, want to be bad.

    The modern-day purpose of deliberate badness, we have been told, is to acquire younger, better, cheaper, contract-controllable talent in order to have, down the road at a time unknowable, sustained competitive success at a high level.

    The psychological problem is that nothing in MLB’s largely misbegotten half-century in Seattle offers hope of that possibility. Nor does the volume of MLB teams currently tanking along with the Mariners suggest that strategy will do anything but become more difficult. The competition is more intense for the same talent. The small middle class in today’s game means there’s too many teams in the same shallow end of the pool.

    Not counting two strike-shortened years, the Mariners have had 11 seasons in which they had fewer than 70 wins, including six seasons of 61 or fewer. The full-season franchise low was 56 in 1978. In 43 years including this one, they have had four seasons of playoffs.

    Since the Mariners have failed as a have-not team and a have team, with a bad stadium and a great stadium, with local ownership and non-local ownership, with no local TV revenues and lots of local TV revenues, the aspiration should be to set the franchise record of 55 or fewer victories. Everything else has been tried.

    At least this time, the club won’t go bankrupt and move to Milwaukee.

    As of Wednesday, 17 of the 25 active players were not on the roster at the end of last season. That’s expansion-level churn. For the rest of the season, I’d stick with the Pilots uniforms and 50-cent popcorn as physical reminders of the attempt to go where no Seattle team has gone before. And never wants to go again.

    As it happens, YouTube has video and audio of the 1969 Pilots:

    The documentary shows different attitudes about the Pilots from what Bouton wrote about in Ball Four. If Bouton is to be believed, the Pilots spent more time doing, shall we say, other activities than baseball — not quite to the level of the fictional North Dallas Forty, a thinly veiled portrayal of the 1960s Dallas Cowboys, but suffice to say Ball Four was a real shock to baseball fans when it was published. (My thought upon reading Ball Four and North Dallas Forty was to want to be a pro athlete, irrespective of whether I had any actual athletic skills.)

    All of this shows how much professional sports has changed in just the past 50 years. It is unconscionable that any major pro sports league would allow an ownership group as undercapitalized as the Pilots’ owners were to own, by purchase or by expansion, a team. One would think Major League Baseball was mortified to have a franchise sink into bankruptcy after one season. The Pilots made the United States Football League appear to be a model of financial stability, and you know what happened to the USFL.

     

     

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  • The revival of rainbow guts

    June 21, 2019
    Sports

    Readers who know that my strange interests include sports uniforms (none of which I got to wear as a player) may know about the garish Houston Astros uniforms of 1975 to 1986.

    The official colors were yellow-orange, orange and burnt orange, to go with white and navy lettering.

    The white star was replaced by a navy blue star for the 1975 rollout. The pants numbers eventually disappeared.
    The original proposal included these hats.
    The warmup jackets in the middle had to be worn one game by the umpires when their luggage got lost. Home plate umpire John McSherry did not look good.

    People who like that uniform design called it “Tequila sunset” (the opposite of “Tequila sunrise”). Those who didn’t called it “rainbow guts.”

    It turns out that the recent WIAA state baseball tournament I covered on the radio included three teams with similar uniforms, including the team for which I announced, Mineral Point (Tequila moonset?) …

    … the team that beat Mineral Point to win the state Division 4 title with an undefeated record, Webster …

    … and a team in Division 1, Green Bay Preble (Tequila tornado warning?):

    Apparently the return of the “rainbow guts” uniforms is a nationwide trend:

    Northwestern did it in purple.
    Louisville did it in red. Most people think light red is pink. That is incorrect; pink is really light magenta.
    Cal State–Fullerton combined its orange and blue colors.

    After the Astros decided they were tired of wearing the previously shown uniform all the time, they created a road version with the “sunset” just on the shoulders, a look emulated (and then some) by the Charleston Rainbows:

    As for the University of Hawaii (Rainbow) Warriors …

    Not sure who this is, except that this school seems to have combined black and gold with the “We Are Family” Pirates’ yellowgold pants.
    Whitewater not-Wisconsin.
    This looks more like a rugby shirt than the rainbow jersey.

    This look is obviously an acquired taste. I kind of like it for the Astros, but I wouldn’t recommend it for everyone. The saving grace is that whether a rainbow uniform is a good idea or not, it will never look as bad as this:

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  • Presty the DJ for June 21

    June 21, 2019
    Music

    Today in 1982, Paul McCartney released “Take It Away”:

    Birthdays today start with the great Lalo Schifrin:

    (more…)

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  • The former fiscally sort-of-conservative state GOP

    June 20, 2019
    Wisconsin politics

    Dan O’Donnell:

    It’s something of a rite of passage for teenagers to be left home alone for a weekend while Mom and Dad go out of town. Years of earned trust are put to the ultimate test: As soon as word gets out that the parents are gone, the peer pressure to host a drinking party can be overwhelming.

    If it can be withstood, then the kids have proven that they can be responsible adults. If not, then it’s difficult for Mom and Dad to ever trust them alone again.

    This year’s biennial budget process has proven to be a similar test for Republicans in the Wisconsin Legislature, as for the first time they have been left home alone without former Governor Scott Walker keeping them from hosting a spending party.

    They haven’t exactly earned Dad’s trust.

    Left to their own devices following Walker’s defeat in November, Republicans on the Joint Finance Committee (JFC) have approved a staggering $1.88 billion on new construction projects. Not only is that nearly double the $1 billion in new construction spending in the 2017-2019 budget (Walker’s last), it tops even the previous record of $1.7 billion spent by Democratic Governor Jim Doyle.

    That’s right: Left with the house to themselves, Republicans managed to outspend the guy who left Wisconsin with a $3.6 billion structural deficit.

    To be sure, Walker’s budgets weren’t nearly as austere as his political opponents made them out to be—state spending steadily increased during his term—but he always kept the bigger spending legislators in his party from indulging their basest instincts.

    He was the only adult keeping the kegs out of his kitchen. Now that he’s gone, though, it’s party time.

    Governor Evers proposed spending $1.07 billion on building projects in the University of Wisconsin System. The Republican-led JFC approved $1.03 billion. Evers wanted to borrow $902 million to pay for it. Republicans approved $857 million—just four percent less.

    Evers proposed spending an additional $537.7 million on transportation. Republicans approved $484 million—only ten percent less. They also increased K-12 education spending by $500 million and Department of Health Services spending by $1.63 billion.

    As the MacIver Institute reported earlier this month, they even bragged about how their health and welfare “budget surpasses, in some cases doubling…Evers’ budget proposal.”

    Fiscal conservatives should rightly question why Republicans would ever crow about outspending a Democrat, while anyone with even a passing knowledge of recent Wisconsin history should question the sanity of anyone of any party who outspends Jim Doyle.

    Though Walker himself boasted of dramatically increasing education spending in his final budget and was perhaps over-reliant on bonding to fund ballooning transportation costs, he was always a fiscally sane Dad who kept the kids in line. With him out of the house, they’re running wild and risking the legacy they built together.

    In the Walker era, legislative Republicans passed quite possibly the single greatest state spending reform in American history in Act 10 and then followed it up with Right to Work legislation and a partial reform of prevailing wage requirements.

    Now they’re, as even the Milwaukee Journal Sentinel noticed, “fighting on Evers’ turf” by their focusing “their funding increases into Evers’ priorities — health care, education and transportation.”

    Of course, JFC Republicans are quick to point out that they also passed a $536 million tax cut without adopting Evers’ plan of simultaneously raising taxes on businesses and retirees, but this is akin to a teenager promising to clean the house after Mom and Dad came home early and found all of the empty beer bottles: The damage is already done.

    If, left to their own devices, Wisconsin Republicans can no longer be trusted to hold the line on spending—or to at least not try so desperately to outspend Wisconsin Democrats—then why should Wisconsin conservatives believe that they can continue to be responsible stewards of state funds?

    Hopefully, adults in the full Senate and Assembly will rein in the JFC’s spending binge and adopt a more fiscally responsible budget than one that could potentially run a structural deficit as high as $1.5 billion over the next two years.

    If they don’t, there’s a good chance that voters won’t leave the kids in charge of the house again.

    One irony here is that Doyle’s last budget included several Doyle line-item vetoes of profligate spending of his own party. It was nevertheless so grossly out of balance that it torpedoed the state’s economy, already weakened by the Great Recession (thanks to the 2007–08 Democratic-controlled Congress). Ponder spending that is too high for even a Democratic governor.

    The other thing, of course, is that this budget should be impossible and illegal because this state should have constitutional, not merely statutory, controls on spending and tax increases. Fiscal responsibility is the second most important thing government does, after preservation of our constitutional rights. Republicans failed to enact permanent (or as permanent as it gets in government) spending and tax controls through the constitutional-amendment process.

     

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  • Presty the DJ for June 20

    June 20, 2019
    Music

    Birthdays today begin with guitarist Chet Atkins:

    Bobby Nunn of the Coasters:

    (more…)

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  • Remember the deficit? Remember the debt?

    June 19, 2019
    US politics

    Peter Suderman on …

    For most of the Obama era, the federal deficit—and, by extension, the debt—was a crisis.

    This was a bipartisan belief, held, or at least paid respectful lip service, by the Tea Party radicals and top administration aides as well as by President Obama himself. Hence the battles over the debt limit; the imposition of sequestration cuts that, fully implemented, were intended to reduce spending by more than $1 trillion over a decade; the concurrent increase in tax rates on high earners; the creation of the National Commission on Fiscal Responsibility and Reform, better known as the Supercommittee; and the Simpson-Bowles debt-reduction proposal to which it led.

    In the end, that plan was rejected by party leaders on both sides. But the idea, that trillion dollar deficits and the pile-up of debt they incur represented a problem, remained alive and powerful to the end. Even President Trump campaigned on (fanciful and mostly incoherent) promises to eliminate the federal debt. The federal budget was an emergency or at least a looming threat. Something had to be done.

    But two and a half years into the Trump administration, neither party acts as if there’s a crisis.

    On the Republican side, the party’s most notable legislative accomplishment was a deficit-increasing tax-cut bill that reduced revenues without offsetting spending cuts. At least for a while, Trump appeared to be under the false impression that federal debt could be paid down with tariff revenue. Trump’s all-purpose acting henchman, the one-time fiscal hawk Mick Mulvaney, has argued in favor of new deficits.

    Amongst Democrats, the GOP’s abandonment of deficit politics has freed the party’s progressives to propose massive spending increases, while elevating economic theoriesthat excuse, or even encourage, a deficits-forever approach to budgeting.

    The budget process itself is deeply broken, leading to last minute, quasi-temporary spending deals that come together only because Republicans want to secure more funding for the military while Democrats obtain more funding for domestic programs. Medicare and Social Security remain the largest long-term drivers of the debt, yet the project of entitlement reform looks effectively dead.

    The 2020 presidential campaign is in full swing, yet debt and deficits have barely been mentioned. Relatedly, public concern about the issue has dwindled since 2013. In just a few years, American politics has been overtaken by a free-spending sense that debt and deficits just. Don’t. Matter.

    And yet the underlying fiscal situation hasn’t changed. If anything, it has become worse. The budget is now on a trajectory toward trillion dollar deficits, and the total federal debt has soared past $21 trillion. And old-age entitlements are rapidly nearing the point of fiscal failure.

    Consider Social Security. Earlier this year, the program’s trustees projected that it would be insolvent—unable to pay all of its bills—in just 16 years. Starting next year, the program will begin tapping its trust fund assets in order to pay its full benefits. Eventually, that fund, which itself is a kind of accounting fiction, will be gone, and the program will only be able to pay out a portion of its benefits.

    Medicare’s finances are, in some ways, in even more dire shape: Although Social Security’s shortfall is larger, Medicare’s main trust fund is expected to reach insolvencyin 2026, at which point it will be able to pay just 89 percent of its bills. That’s just two presidential elections away, and yet nearly all of the current discussion about Medicare is about whether and how to expand it.

    This is the new free-lunchism, and it is driven almost entirely by the politics of convenience and short-term thinking: Voters want more benefits and more spending but not the broad middle-class tax hikes that other countries rely on to pay for those benefits, and politicians across the aisle have responded by offering them exactly the combination they want, with predictable results. There is a prevailing sense amongst both voters and lawmakers that there is little cost to doing so, at least for now. After all, the debt-driven calamities warned about during the Obama era never came to pass. So why worry now?

    In part, this is a misunderstanding of how debt crises work. Typically they don’t announce themselves years in advance and provide the public and the political class time to prepare. By the time a crisis arrives, it is, almost definitionally, already too late.

    And to the extent debt crises do announce themselves, it’s unlikely to be through anything dramatic. Instead, the early warnings are likely to come through boring and somewhat uncertain projections from actuaries and government economic offices, think tanks that seem to always warn of an impending debt crisis, and deficit-hawk politicians who gripe that no one ever listens to them. The signs and portents, in other words, would look something like what we’re already seeing now.

    The current lack of concern about deficits is also partially a result of a re-thinking by some economists, especially on the left and center-left, about the relative importance of deficits; maybe deficits will matter at some point, this line of thinking goes, but not as much as previously thought, and certainly not at present.

    Intentionally or not, this line of thinking has given the political class, which rarely considers economic ideas with much nuance, a license to make ever-more extravagant and expensive promises. It has resulted in a calculation, probably correct, that offering voters more—and more and more and more—without the pain of tax hikes, is a path to easy victory with few consequences. Which by all appearances, it is, and will be…right up until it isn’t.

    It is possible, I suppose, that this cavalier approach to public finance will work out, more or less, that we’ll muddle through, as we usually have, and that the recklessness of the political class will prove merely irresponsible in the usual way, rather than fully calamitous.

    And yet. To believe that we should simply respond to the current fiscal situation with a collective shrug requires a belief not only that current levels of debt and deficits don’t matter, but that the inevitable future expansion of the fiscal gap won’t matter either.

    Because one thing you can be certain of is that if today’s fiscal frivolity does not produce immediate dire consequences, then the next generation of politicians, Republican and Democrat alike, will push the envelope just a little bit further, and a little bit further after that, and so on and so forth, rather than settling in some comfortable stopping point where the country’s finances are messy but mostly hang together.

    Sustaining this casual attitude toward fiscal looseness thus requires believing that there is essentially no limit, no meaningful upper bound, to the amount of debt that the federal budget can sustain, an idea that even many of today’s more sophisticated debt-doesn’t-matter boosters don’t subscribe to. Alternatively, it requires a high degree of confidence that our nation’s political class will more or less responsibly take our national ledger right up to the brink but no further, finding the precise last moment in which to exercise fiscal restrain. If you believe this, I would gently suggest you acquaint yourself with some politicians.

    Otherwise, you have to worry, at least a little, that today’s trajectory is toward crisis, if not now, if not at current debt levels, then at some future date we’ll only discover when it’s too late to prevent, when the consequences can’t be avoided. And that worry should be increased a little more by the possibility that today’s free-lunchism is not only increasing the likelihood of an eventual crisis, but making it harder to solve, if and when it does arrive, by seeding amongst voters the idea that hard choices won’t ever be necessary. It is making the already challenging project of achieving public consensus harder still.

    So yes, the predicted crisis may not have arrived quite yet. It may even hold off for a while longer. But the nature of politics means it draws ever closer, and ignoring the issue, as we are now, only makes it worse.

    Brian Riedl explains the history and, perhaps inadvertently, shows the problem:

    Seemingly no one cares about the budget deficit anymore. Republicans recently cut taxes by $2 trillion, while Democrats are promising a spending spree that could top $40 trillion over the decade. And this is on top of the current budget trajectory that shows annual deficits exceeding $2 trillion within a decade, and totaling a staggering $84 trillion over the next 30 years.

    The cost of paying interest on this debt is projected to become the largest federal expenditure within a few decades, consuming one-third of all federal taxes. Even that assumes continued low interest rates. Every percentage point they rise adds another $13 trillion in budget interest costs over the next three decades.

    In short, an avalanche of debt is upon us. Yet pandering politicians promise even more free lunches, paid for by our kids.

    America desperately needs a “grand deal” on deficits, where Republicans and Democrats come together and make the difficult choices to avert a debt-based calamity. We’re all in this together, so everything should be on the table, with no sacred cows.

    Such a deal seems wildly implausible. But it has not always been. In a new study, I analyzed the 14 largest deficit-reduction negotiations since 1980. Six of these negotiations successfully led to a deficit-reduction deal, and eight of them failed. Yet the outcome of nearly every negotiation was determined by the same three variables. Satisfying at least two of them always led to a deal. Satisfying one or zero produced failure.

    First, there should be a “penalty default” that brings negotiators to the table. This is some painful policy — such as a government shutdown, debt limit default, or deep automatic spending cuts — that would be implemented automatically if a deal is not enacted by a certain date. The 1983 Social Security reforms were motivated by the program’s impending trust fund exhaustion that would bring automatic benefit cuts. The 2011 Budget Control Act was motivated by the need to quickly raise the debt limit and avoid a default on federal obligations.

    Today’s challenge is that government shutdowns and debt limits have proven to be increasingly ineffective and dangerous ways to motivate a deal. New penalty defaults are needed to bring lawmakers to the table.

    Second, the public must want a deficit-reduction deal. The budget deals enacted between 1985 and 1997 — which helped balance the budget — were driven by voter deficit concerns that made it politically safer for politicians to impose spending cuts and tax hikes. Today, most voters either do not care about the deficit, or are willing to address it in only a partisan fashion.

    Third, Congress and the White House must engage in healthy, good-faith negotiations. During the 1995 deficit-reduction negotiations, President Clinton and the Republican Congress attacked each other publicly (even running TV ads against each other) and relied on deception and intimidation to bully the other side into accepting a lopsided deal. These negotiations inevitably failed, leading to a lengthy government shutdown.

    Two years later, both sides tried again. Each side honestly laid out their priorities, made generous concessions, avoided hardball tactics, and worked towards a deal in which both sides could claim victory. Neither side relied on leaking to the media or publicly bullying the other. The result was a popular, bipartisan budget deal that was followed by a balanced budget the following year.

    This “healthy negotiations” variable was regularly present in the 1980s and 1990s budget negotiations — and has never been present since. That is the lead reason why only one successful deficit-reduction negotiation has occurred in the past 20 years. Republicans and Democrats no longer know how to negotiate with — or even tolerate — each other. And yes, both parties are to blame on that.

    Future deficit negotiations also will be more difficult because past negotiations picked the low-hanging fruit. More than half of all savings from past deficit-reduction deals came from discretionary spending (mostly defense) — reducing the discretionary spending share of the budget to less than one-fourth within the next decade. Savings from small entitlement programs, modest tax changes and user fees also have played a role in past deficit-reduction deals.

    What’s left? The Social Security and Medicare systems face a $100 trillion cash shortfall over the next 30 years, while the rest of the budget is projected to run a $16 trillion surplus. Closing this gap will require some combination of Social Security and Medicare reforms, and new taxes that include the middle-class. Defense cuts, social spending cuts, and millionaire taxes should be on the table, but cannot close more than a small fraction of that combined $84 trillion shortfall. The math is unforgiving.

    This represents a challenge to both politicians and voters. The president and Congress need to get off of Twitter, rebuild relationships and learn to negotiate despite their strong disagreements. The public must also stop demanding more free lunch policies from politicians. After all, the climate change movement focuses on imposing relatively-modest reforms now to avoid calamity later. Imposing modest budget reforms now, before an $84 trillion deluge of debt brings a Greece-style economic calamity, also should be a top priority.

    The problems are obvious. The biggest and growing cause of federal deficits are entitlements, specifically Social Security and Medicare, and yet suggesting that reform of Social Security and Medicare is needed is a good way to end your political career.

    And yet, tax increases are always the wrong answer. Always. Tax increases, as everyone should know, end up slowing down the economy and make family finances worse. Who therefore should want a fix to federal deficits when the fix makes them worse off?

    There are two ways to fix the deficit. One isn’t likely to happen — a constitutional requirement for a balanced budget with no wiggle-outs for alleged national emergencies. The other is a crisis.

     

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Steve Prestegard.com: The Presteblog

The thoughts of a journalist/libertarian–conservative/Christian husband, father, Eagle Scout and aficionado of obscure rock music. Thoughts herein are only the author’s and not necessarily the opinions of his family, friends, neighbors, church members or past, present or future employers.

  • Steve
    • About, or, Who is this man?
    • Facebook
    • Twitter
    • Adventures in ruralu0026nbsp;inkBack in June 2009, I was driving somewhere through a rural area. And for some reason, I had a flashback to two experiences in my career about that time of year many years ago. In 1988, eight days after graduating from the University of Wisconsin, I started work at the Grant County Herald Independent in Lancaster as a — well, the — reporter. Four years after that, on my 27th birthday, I purchased, with a business partner, the Tri-County Press in Cuba City, my first business venture. Both were experiences about which Wisconsin author Michael Perry might write. I thought about all this after reading a novel, The Deadline, written by a former newspaper editor and publisher. (Now who would write a novel about a weekly newspaper?) As a former newspaper owner, I picked at some of it — why finance a newspaper purchase through the bank if the seller is willing to finance it? Because the mean bank lender is a plot point! — and it is much more interesting than reality, but it is very well written, with a nicely twisting plot, and quite entertaining, again more so than reality. There is something about that first job out of college that makes you remember it perhaps more…
    • Adventures in radioI’ve been in the full-time work world half my life. For that same amount of time I’ve been broadcasting sports as a side interest, something I had wanted to since I started listening to games on radio and watching on TV, and then actually attending games. If you ask someone who’s worked in radio for some time about the late ’70s TV series “WKRP in Cincinnati,” most of them will tell you that, if anything, the series understated how wacky working in radio can be. Perhaps the funniest episode in the history of TV is the “WKRP” episode, based on a true story, about the fictional radio station’s Thanksgiving promotion — throwing live turkeys out of a helicopter under the mistaken belief that, in the words of WKRP owner Arthur Carlson, “As God is my witness, I thought turkeys could fly.” [youtube=http://www.youtube.com/watch?v=ST01bZJPuE0] I’ve never been involved in anything like that. I have announced games from the roofs of press boxes (once on a nice day, and once in 50-mph winds), from a Mississippi River bluff (more on that later), and from the front row of the second balcony of the University of Wisconsin Fieldhouse (great view, but not a place to go if…
    • “Good morning/afternoon/evening, ________ fans …”
    • My biggest storyEarlier this week, while looking for something else, I came upon some of my own work. (I’m going to write a blog someday called “Things I Found While Looking for Something Else.” This is not that blog.) The Grant County Sheriff’s Department, in the county where I used to live, has a tribute page to the two officers in county history who died in the line of duty. One is William Loud, a deputy marshal in Cassville, shot to death by two bank robbers in 1912. The other is Tom Reuter, a Grant County deputy sheriff who was shot to death at the end of his 4 p.m.-to-midnight shift March 18, 1990. Gregory Coulthard, then a 19-year-old farmhand, was convicted of first-degree intentional homicide and is serving a life sentence, with his first eligibility for parole on March 18, 2015, just 3½ years from now. I’ve written a lot over the years. I think this, from my first two years in the full-time journalism world, will go down as the story I remember the most. For journalists, big stories contain a paradox, which was pointed out in CBS-TV’s interview of Andy Rooney on his last “60 Minutes” Sunday. Morley Safer said something along the line…
  • Food and drink
    • The Roesch/Prestegard familyu0026nbsp;cookbookFrom the family cookbook(s) All the families I’m associated with love to eat, so it’s a good thing we enjoy cooking. The first out-of-my-house food memory I have is of my grandmother’s cooking for Christmas or other family occasions. According to my mother, my grandmother had a baked beans recipe that she would make for my mother. Unfortunately, the recipe seems to have  disappeared. Also unfortunately, my early days as a picky, though voluminous, eater meant I missed a lot of those recipes made from such wholesome ingredients as lard and meat fat. I particularly remember a couple of meals that involve my family. The day of Super Bowl XXXI, my parents, my brother, my aunt and uncle and a group of their friends got together to share lots of food and cheer on the Packers to their first NFL title in 29 years. (After which Jannan and I drove to Lambeau Field in the snow,  but that’s another story.) Then, on Dec. 31, 1999, my parents, my brother, my aunt and uncle and Jannan and I (along with Michael in utero) had a one-course-per-hour meal to appropriately end years beginning with the number 1. Unfortunately I can’t remember what we…
    • SkålI was the editor of Marketplace Magazine for 10 years. If I had to point to one thing that demonstrates improved quality of life since I came to Northeast Wisconsin in 1994, it would be … … the growth of breweries and  wineries in Northeast Wisconsin. The former of those two facts makes sense, given our heritage as a brewing state. The latter is less self-evident, since no one thinks of Wisconsin as having a good grape-growing climate. Some snobs claim that apple or cherry wines aren’t really wines at all. But one of the great facets of free enterprise is the opportunity to make your own choice of what food and drink to drink. (At least for now, though some wish to restrict our food and drink choices.) Wisconsin’s historically predominant ethnic group (and our family’s) is German. Our German ancestors did unfortunately bring large government and high taxes with them, but they also brought beer. Europeans brought wine with them, since they came from countries with poor-quality drinking water. Within 50 years of a wave of mid-19th-century German immigration, brewing had become the fifth largest industry in the U.S., according to Maureen Ogle, author of Ambitious Brew: The Story of American Beer. Beer and wine have…
  • Wheels
    • America’s sports carMy birthday in June dawned without a Chevrolet Corvette in front of my house. (The Corvette at the top of the page was featured at the 2007 Greater Milwaukee Auto Show. The copilot is my oldest son, Michael.) Which isn’t surprising. I have three young children, and I have a house with a one-car garage. (Then again, this would be more practical, though a blatant pluck-your-eyes-out violation of the Corvette ethos. Of course, so was this.) The reality is that I’m likely to be able to own a Corvette only if I get a visit from the Corvette Fairy, whose office is next door to the Easter Bunny. (I hope this isn’t foreshadowing: When I interviewed Dave Richter of Valley Corvette for a car enthusiast story in the late great Marketplace Magazine, he said that the most popular Corvette in most fans’ minds was a Corvette built during their days in high school. This would be a problem for me in that I graduated from high school in 1983, when no Corvette was built.) The Corvette is one of those cars whose existence may be difficult to understand within General Motors Corp. The Corvette is what is known as a “halo car,” a car that drives people into showrooms, even if…
    • Barges on fouru0026nbsp;wheelsI originally wrote this in September 2008.  At the Fox Cities Business Expo Tuesday, a Smart car was displayed at the United Way Fox Cities booth. I reported that I once owned a car into which trunk, I believe, the Smart could be placed, with the trunk lid shut. This is said car — a 1975 Chevrolet Caprice coupe (ours was dark red), whose doors are, I believe, longer than the entire Smart. The Caprice, built down Interstate 90 from us Madisonians in Janesville (a neighbor of ours who worked at the plant probably helped put it together) was the flagship of Chevy’s full-size fleet (which included the stripper Bel Air and middle-of-the-road Impala), featuring popular-for-the-time vinyl roofs, better sound insulation, an upgraded cloth interior, rear fender skirts and fancy Caprice badges. The Caprice was 18 feet 1 inch long and weighed 4,300 pounds. For comparison: The midsize Chevrolet of the ear was the Malibu, which was the same approximate size as the Caprice after its 1977 downsizing. The compact Chevrolet of the era was the Nova, which was 200 inches long — four inches longer than a current Cadillac STS. Wikipedia’s entry on the Caprice has this amusing sentence: “As fuel economy became a bigger priority among Americans…
    • Behind the wheel
    • Collecting only dust or rust
    • Coooooooooooupe!
    • Corvettes on the screen
    • The garage of misfit cars
    • 100 years (and one day) of our Chevrolets
    • They built Excitement, sort of, once in a while
    • A wagon by any otheru0026nbsp;nameFirst written in 2008. You will see more don’t-call-them-station-wagons as you drive today. Readers around my age have probably had some experience with a vehicle increasingly rare on the road — the station wagon. If you were a Boy Scout or Girl Scout, or were a member of some kind of youth athletic team, or had a large dog, or had relatives approximately your age, or had friends who needed to be transported somewhere, or had parents who occasionally had to haul (either in the back or in a trailer) more than what could be fit inside a car trunk, you (or, actually, your parents) were the target demographic for the station wagon. “Station wagons came to be like covered wagons — so much family activity happened in those cars,” said Tim Cleary, president of the American Station Wagon Owners Association, in Country Living magazine. Wagons “were used for everything from daily runs to the grocery store to long summer driving trips, and while many men and women might have wanted a fancier or sportier car, a station wagon was something they knew they needed for the family.” The “station wagon” originally was a vehicle with a covered seating area to take people between train stations…
    • Wheels on theu0026nbsp;screenBetween my former and current blogs, I wrote a lot about automobiles and TV and movies. Think of this post as killing two birds (Thunderbirds? Firebirds? Skylarks?) with one stone. Most movies and TV series view cars the same way most people view cars — as A-to-B transportation. (That’s not counting the movies or series where the car is the plot, like the haunted “Christine” or “Knight Rider” or the “Back to the Future” movies.) The philosophy here, of course, is that cars are not merely A-to-B transportation. Which disqualifies most police shows from what you’re about to read, even though I’ve watched more police video than anything else, because police cars are plain Jane vehicles. The highlight in a sense is in the beginning: The car chase in my favorite movie, “Bullitt,” featuring Steve McQueen’s 1968 Ford Mustang against the bad guys’ 1968 Dodge Charger: [youtube=http://www.youtube.com/watch?v=GMc2RdFuOxIu0026amp;fmt=18] One year before that (but I didn’t see this until we got Telemundo on cable a couple of years ago) was a movie called “Operación 67,” featuring (I kid you not) a masked professional wrestler, his unmasked sidekick, and some sort of secret agent plot. (Since I don’t know Spanish and it’s not…
    • While riding in my Cadillac …
  • Entertainments
    • Brass rocksThose who read my former blog last year at this time, or have read this blog over the past months, know that I am a big fan of the rock group Chicago. (Back when they were a rock group and not a singer of sappy ballads, that is.) Since rock music began from elements of country music, jazz and the blues, brass rock would seem a natural subgenre of rock music. A lot of ’50s musical acts had saxophone players, and some played with full orchestras … [youtube=http://www.youtube.com/watch?v=9CPS-WuUKUE] … but it wasn’t until the more-or-less simultaneous appearances of Chicago and Blood Sweat u0026amp; Tears on the musical scene (both groups formed in 1967, both had their first charting singles in 1969, and they had the same producer) that the usual guitar/bass/keyboard/drum grouping was augmented by one or more trumpets, a sax player and a trombone player. While Chicago is my favorite group (but you knew that already), the first brass rock song I remember hearing was BSu0026amp;T’s “Spinning Wheel” — not in its original form, but on “Sesame Street,” accompanied by, yes, a giant spinning wheel. [youtube=http://www.youtube.com/watch?v=qi9sLkyhhlE] [youtube=http://www.youtube.com/watch?v=OxWSOuNsN20] [youtube=http://www.youtube.com/watch?v=U9U34uPjz-g] I remember liking Chicago’s “Just You ‘n Me” when it was released as a single, and…
    • Drive and Eat au0026nbsp;RockThe first UW home football game of each season also is the opener for the University of Wisconsin Marching Band, the world’s finest college marching band. (How the UW Band has not gotten the Sudler Trophy, which is to honor the country’s premier college marching bands, is beyond my comprehension.) I know this because I am an alumnus of the UW Band. I played five years (in the last rank of the band, Rank 25, motto: “Where Men Are Tall and Run-On Is Short”), marching in 39 football games at Camp Randall Stadium, the Hubert H. Humphrey Metrodome in Minneapolis, Michigan Stadium in Ann Arbor, Memorial Stadium at the University of Illinois (worst artificial turf I had ever seen), the University of Nevada–Las Vegas’ Sam Boyd Silver Bowl, the former Dyche Stadium at Northwestern University, five high school fields and, in my one bowl game, Legion Field in Birmingham, Ala., site of the 1984 Hall of Fame Bowl. The UW Band was, without question, the most memorable experience of my college days, and one of the most meaningful experiences of my lifetime. It was the most physical experience of my lifetime, to be sure. Fifteen minutes into my first Registration…
    • Keep on rockin’ in the freeu0026nbsp;worldOne of my first ambitions in communications was to be a radio disc jockey, and to possibly reach the level of the greats I used to listen to from WLS radio in Chicago, which used to be one of the great 50,000-watt AM rock stations of the country, back when they still existed. (Those who are aficionados of that time in music and radio history enjoyed a trip to that wayback machine when WLS a Memorial Day Big 89 Rewind, excerpts of which can be found on their Web site.) My vision was to be WLS’ afternoon DJ, playing the best in rock music between 2 and 6, which meant I wouldn’t have to get up before the crack of dawn to do the morning show, yet have my nights free to do whatever glamorous things big-city DJs did. Then I learned about the realities of radio — low pay, long hours, zero job security — and though I have dabbled in radio sports, I’ve pretty much cured myself of the idea of working in radio, even if, to quote WAPL’s Len Nelson, “You come to work every day just like everybody else does, but we’re playing rock ’n’ roll songs, we’re cuttin’ up.…
    • Monday on the flight line, not Saturday in the park
    • Music to drive by
    • The rock ofu0026nbsp;WisconsinWikipedia begins its item “Music of Wisconsin” thusly: Wisconsin was settled largely by European immigrants in the late 19th century. This immigration led to the popularization of galops, schottisches, waltzes, and, especially, polkas. [youtube=http://www.youtube.com/watch?v=yl7wCczgNUc] So when I first sought to write a blog piece about rock musicians from Wisconsin, that seemed like a forlorn venture. Turned out it wasn’t, because when I first wrote about rock musicians from Wisconsin, so many of them that I hadn’t mentioned came up in the first few days that I had to write a second blog entry fixing the omissions of the first. This list is about rock music, so it will not include, for instance, Milwaukee native and Ripon College graduate Al Jarreau, who in addition to having recorded a boatload of music for the jazz and adult contemporary/easy listening fan, also recorded the theme music for the ’80s TV series “Moonlighting.” Nor will it include Milwaukee native Eric Benet, who was for a while known more for his former wife, Halle Berry, than for his music, which includes four number one singles on the Ru0026amp;B charts, “Spend My Life with You” with Tamia, “Hurricane,” “Pretty Baby” and “You’re the Only One.” Nor will it include Wisconsin’s sizable contributions to big…
    • Steve TV: All Steve, All the Time
    • “Super Steve, Man of Action!”
    • Too much TV
    • The worst music of allu0026nbsp;timeThe rock group Jefferson Airplane titled its first greatest-hits compilation “The Worst of Jefferson Airplane.” Rolling Stone magazine was not being ironic when it polled its readers to decide the 10 worst songs of the 1990s. I’m not sure I agree with all of Rolling Stone’s list, but that shouldn’t be surprising; such lists are meant for debate, after all. To determine the “worst,” songs appropriate for the “Vinyl from Hell” segment that used to be on a Madison FM rock station, requires some criteria, which does not include mere overexposure (for instance, “Macarena,” the video of which I find amusing since it looks like two bankers are singing it). Before we go on: Blog posts like this one require multimedia, so if you find a song you hate on this blog, I apologize. These are also songs that I almost never listen to because my sound system has a zero-tolerance policy — if I’m listening to the radio or a CD and I hear a song I don’t like, it’s, to quote Bad Company, gone gone gone. My blonde wife won’t be happy to read that one of her favorite ’90s songs, 4 Non Blondes’ “What’s Up,” starts the list. (However,…
    • “You have the right to remain silent …”
  • Madison
    • Blasts from the Madison media past
    • Blasts from my Madison past
    • Blasts from our Madison past
    • What’s the matter with Madison?
    • Wisconsin – Madison = ?
  • Sports
    • Athletic aesthetics, or “cardinal” vs. “Big Red”
    • Choose your own announcer
    • La Follette state 1982 (u0022It was 30 years ago todayu0022)
    • The North Dakota–Wisconsin Hockey Fight of 1982
    • Packers vs. Brewers
  • Hall of Fame
    • The case(s) against teacher unions
    • The Class of 1983
    • A hairy subject, or face the face
    • It’s worse than you think
    • It’s worse than you think, 2010–11 edition
    • My favorite interview subject of all time
    • Oh look! Rural people!
    • Prestegard for president!
    • Unions vs. the facts, or Hiding in plain sight
    • When rhetoric goes too far
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