Wish list: 2010

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A Wisconsin Political Fix
not just another blog
January 7, 2010

By Bill Kraus


1. A reduction in the need for money in political campaigns specifically, politics generally.

2. A reinvention, resuscitation, or something, of journalism.

3. A return of citizen politicians to the business of campaign management.

4. A decline in the influence of talk radio and other manifestations of faux journalism.

5. A revival of political ambition and a concomitant decrease in careerism by office holders.

6. A redistricting of legislative districts which is designed to have more rather than fewer congressional and state legislative districts which are competitive.

7. A reduction in the number, influence, and virulence of groups with narrow interests in politics.

8. An invention of a general interest political device into which special interests could be incorporated and citizens could find a route into political activism other than through special interest groups or entrepreneurial candidate organizations.

9. A re-creation of politics as a participatory instead of a spectator sport.

10. An end to endless (or continuous) campaigns and campaigning (see wish number 1, above).

11. A return to discourse and adversity in political discourse; sometimes referred to as civility, mutual respect or listening.

We all know that our political institutions, like all institutions, are not much interested in self-correction. The only way, then, to even make progress in any of these 11 areas is for a lot of us to realize and react to our own culpability. Someone has said what we need is for more of us to recognize that the they we criticize is us. Or, to put it more directly, as the drunken driver who turned herself in to 9-1-1 did last year, “I am them.”


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Nothing ventured

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A Wisconsin Political Fix
not just another blog
December 22, 2009

By Bill Kraus

John Torinus and Tom Hefty have weighed in and given the state an 'F' on their economic test. They are tough graders, but it is hard to argue with their facts about lost jobs, low family incomes, shrinking wages.

So what will reverse these discouraging trends? I don’t hear anyone suggesting that the mainstays of the 20th century Wisconsin economy like paper, heavy machinery, and auto-related manufacturing are likely to return to their glory years.

The same article touts the cluster strategy that would build on still lively assets like GE’s medical equipment and Milwaukee’s hundred plus water related companies. They do not emphasize the prospects of the small, fledgling idea-driven companies being spawned by Wisconsin’s research universities and institutions in, mostly, Madison and Milwaukee but they have in the past.

Happily they do not dwell on the usual government suspects: taxes, fees, regulation, attitude. They lament instead the lack of a new economic strategy for the state and by the state.

They do view the dismal state of providing the kind of high-risk, venture capital that is mother’s milk these aforementioned start-ups and early second stage enterprises need with rightful alarm.

This, happily, is something that state government can do something about. Or can it?

The Democrats in the state Senate have put together a stimulus proposal that would put modest amounts of state money into the hands of entrepreneurs to nourish and encourage job creation.

Why not a full fledged venture capital program which would grow the state’s economy with a tiny percentage of the money (more than $70 billion at the moment) being invested by the state investment board on behalf of the thousands of people who have retired or will retire from their jobs in state and local government and education?

As it happens, I can tell you why not. This idea surfaced some 30 years ago and was immediately and vigorously opposed by the state employees’ union, the directors of local government organizations, and the state teachers union.

These risk-averse organizations preferred investments in the blue chips like, say, General Motors. So how well did that work out?

It would be foolish to pretend the safety firsters (if indeed there are any safe places) don’t have a point. Venture investing is a risky business, and the rules of venture investing make its operatives easy marks for the advocates of the more traditional AAA stocks and bonds, even though these are unhappily in some disrepute these days.

But this doesn’t make venture investing less risky or protect it from criticism.

This is why: Venture investing, not unlike baseball, is mostly about failure. Even the best of the best in baseball and in venture investing rarely bat .300. This is bad.

What is worse is that those venture investments that go bad do so quickly. So right out of the box, the most canny practitioners have to own up to and abandon--this is another unpleasant aspect of successful venture investing--the early losers.

To succeed, venture investors have to spread their money around. If they want to get three successes they have to make 10 investments, seven of which will either fail completely or simply mog along and produce little if any in the way of earnings and growth. Those that fail, what’s more, have to be jettisoned. Successful venture investors are ruthless about adhering to a “no good money after bad” strategy.

It is not hard to imagine what kind of public outcry will ensue from early failures and fast reinvestments with what is essentially public money because the public will have to replace those losses with more tax money if the three winners in this hypothetical example don’t come through.

Can any elected official stand up to this kind of criticism? These are the same people who caved in on indexing the gas tax when the talk-radio people raised the decibel level on that penny ante burden during the $4-a-gallon trauma.

If they can and will, however, the rewards are provably worth it. Those three winners and the one heroic success of those three represent the future, the next Wisconsin economy. No one knows what they will be. No one knew a century ago that a salesman and a hardware dealer in the Fox River Valley would have an idea that would become Kimberly-Clark, or that a man who built a dam in Wisconsin Rapids would find a way to use the excess power it created to make coated paper.

Wisconsin has the money. What Wisconsin needs is the will and the expertise and the guts to stand up to the inevitable criticism.

The alternative is another richly deserved 'F.'


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The future, should you choose to accept it

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A Wisconsin Political Fix
not just another blog
December 13, 2009

By Bill Kraus

There was a well attended legislative hearing last week on a very large, very complicated, very important proposal. The name of the proposal is the Wisconsin C.O.R.E. Jobs Act. It deals with the next Wisconsin economy generally and what the state government could and should do to find and support what one witness called “the new normal.”

That description encapsulates the size and difficulty of what is being attempted. It dismisses the fantasy that says that, as this recession recedes, Wisconsin will return to normal.

That kind of normal in which our economy was driven by construction and automobiles is history. The new kind of normal is being visualized and invented in many mostly small ways by many people, but it is still not clear what it will look like or when it will arrive.

Part of the reason for the hearing was to get expert testimony and viewpoints from the smartest people in the room and state who are working their way through this maze.

The committees introducing C.O.R.E. are headed by Senator Julie Lassa and Representative Louis Molepske. This hearing gave the members of their committees a chance to express their views and recommendations on the concept generally and the specific ideas in it that a lot of people doing a lot of hard work have fashioned.

Those familiar with the committee-hearing process will not be surprised to learn that many legislators on these committees wandered from the subject at hand to criticize the current administration, deplore the sad state of the economy, or get a plug in for whatever is on the top of their personal agendas.

It did strike me that these side trips into ego-land indicated that a lot of legislators are still playing a hand in a game that is that is no longer being dealt. They didn’t seem to notice that there were no reporters in the room. Or that the audience for their wisdom was strictly limited, or, as another old journalistic hand once said, “If the press doesn’t cover it, it doesn’t exist.”

This is a small loss on the sideshows, but a grievous one for the future of C.O.R.E.

It would be amazing if the 14 main elements of C.O.R.E. repair the damage that has been done to our economy, but it seems to be a step in the direction of re-imagining and re-inventing our economy that is needed and of playing in particular to the enormous strengths of a 150 year investment in education and academic research.

Everyone in the hearing room who testified endorsed the effort.

Even the committee members who were critical mostly complained that it didn’t go far enough.

If all the gubernatorial wannabes don’t rush to Senator Lassa’s office for their transcript of the testimony and a personal copy of the paper prepared by David Ward’s NorthStar Economics company, they shouldn’t even go to the trouble of filing nomination papers.

This is the issue for 2010. This is the challenge for the century.

Or to steal from the less polite but more graphic way a long ago campaign advisor to a long ago president did in a previous millennium said it, “It’s about jobs, stupid.”


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