Useful Preamble

Before I begin this response to Barrett's argument on high speed rail, I think it's important to accentuate at least two facts.  First, less than 1% of the U.S. populous ride high speed rail.  And second, more than 99% of the populous will pay for it.  Keep this in mind as you read through the rest of this article.

Brief Context

Recently, in Wisconsin, we received a government subsidy of more than $800 million from Obama's Congress to erect a high speed rail line from Milwaukee to Madison.  This money was sought out by Governor Doyle and eventually accepted by our Legislature's Joint Finance Committee.  Although the federal government has awarded us with some play money, they will not continue to fund the operational costs of our rail system once it is functional and active.  This has become the center of recent debate.

Just recently, gubernatorial candidates in Wisconsin began to debate the merits of high speed rail resulting in two editorials in the Milwaukee Journal Sentinel - one by Scott Walker and the other by Tom Barrett.  But first, let's take a look at Barrett's recent remarks in Milwaukee.

Tom Barrett Joins the High Speed Rail Debate

At Marquette University, Tom Barrett was asked where will the money come from to subsidize the operational costs of the rail line from Milwaukee to Madison.  Barrett gave a two-fold answer, one that addressed the question of funding and one that took a swipe at his two Republican opponents.  Unfortunately, we have time only for the first prong of his quote.

When asked where Barrett will get the money, Barrett said,

"Bear in mind we're talking about well over $800 million coming to this state's economy, right now, and it's going to come here and create jobs and opportunities to spend money. As a result, if you use the simple economic concept of a multiplier effect it will have a ripple effect, and it's going to create more jobs and more spending. If you take just a percentage of that $800 million, let's say it's 10%, that's $80 million.... I believe that spending [for subsidies] for years will be covered by the multiplier effect of that injection of dollars into the economy. I also think people will ride it. If it doesn't happen, it will be years down the road, and of course we're going to have to look at it."

Barrett's right in this respect: there will be $800 million injected into Wisconsin's economy in the form of construction jobs, if the high speed rail project were to continue.  And he's right that it would create more opportunities to spend money and produce a "multiplier-effect" that is beneficial to Wisconsin.

However, we should also note that there would be a similar multiplier effect if the federal government awarded us $1 billion to build 100 new public high-schools.  And just like the schools, after the $1 billion has been spent, Wisconsin would have to maintain the schools by hiring more teachers, janitors, maintenance personnel, security guards, buses, books, equipment, snow removal service, property taxes and many other costs not yet considered.  Needless to say, the operational costs to maintain 100 new schools would far outreach what we taxpayers could afford.

Cost Versus Benefits

Before accepting a building venture, a wise businessman should ask this question: does the benefit of creating temporary construction work of a project offset its continuing operational costs?  In the case of the 100 public schools, the answer is obviously no.  We don't have the population of taxpayers great enough to absorb such an increase in cost.  And in the case of high speed rail, the answer is the same.  The Milwaukee Journal Sentinel reported that annual costs for operating the rail line will start off at $8 million a year.  Mind you, this is just a projection.  And by 2022, the costs would increase to $28 million a year, which is another projection.

Ridership Projections

We should also keep in mind that these government estimates, which almost always give optimistic projections, are based upon a ridership of 360,000 the first year.  This is about half the ridership of the rail line travelled between Chicago and Milwaukee in 2008.  If you haven't yet noticed, there are some important assumptions being made here.

Chicago itself is a population center of 2.8 million, which is the third largest city in the United States.  It is 4.5 times larger than Milwaukee and roughly 12 times the size of Madison.  Why would the projected ridership of the Milwaukee-Madison be only half the ridership of the Chicago-Milwaukee route when Chicago is 4 times larger than Milwaukee and 12 times larger than Madison?

If their projections of ridership are too high, then Wisconsin taxpayers will be stuck with a bill larger than the $8 million a year by 2012 and larger than the 28 million a year by 2022.  In fact, there are good reasons to believe that the ridership between Milwaukee and Madison will be lower than estimated simply because the route toward Madison ends at the Dane County Airport, falling 6 miles short of the heart of Madison.

This means that passengers would have to pay a $60-$80 round-trip ticket only to grab a taxi or shuttle bus between Downtown Madison and the Dane County Airport.  It's not a very smart way of traveling, and most would rather take a car simply because it would save money and provide a greater flexibility of travel.

Economic Development

Barrett also mentions the "multiplier effect", a term used by economists to refer to an increase in national income through national spending.  Now, it's not likely that there will be a national multiplier effect by erecting high speed rail, but there would likely be one for Wisconsin since the nation is bearing the burden for our spending project.

Even so, how much economic stimulus can we expect to get from high speed rail?  Beyond the initial jobs in construction, the answer is not much.  Proponents of high speed rail argue that rail stations draw businesses in the vicinity and therefore creates sustainable jobs and stimulative spending.  However, it is more likely that those businesses would have been created without the rail, and instead chose to change their plans of relocation.  Economists call this a zero-sum game, which means that high speed rail will not increase the total income and sales tax revenues of Wisconsin through business relocation.

Conclusion

And finally, what if people don't ride it?  If this happened, then we are stuck with an ideological project that, like a cancer, will drain the life out of taxpayers what would have likely spent money into our economy.  Scott Walker puts it like this,

"Federal stimulus money for high-speed rail is not free; the government is borrowing it from future generations. Accepting this money means obligating Wisconsin taxpayers to spend millions more every year."

Perhaps when high speed rail proves to be profitable in other states, we can consider building one in Wisconsin.  Until then, let's stick with a more modern mode of transportation that saves money, provides more flexibility of travel, and doesn't add a new burden of debt on taxpayers.

Mr. Neumann,

With disappointment and frustration, I write this letter to urge you to withdraw from your gubernatorial campaign.  I think you are a good man with good ideas, and under different circumstances, I believe you would have been a solid candidate for the governor of Wisconsin. 

However, you have acquired little support from GOP officials including Republicans in our State Senate and Assembly.  You have no prominent endorsements, and your most distinguished supporter left your campaign to endorse your opponent.  Your campaign fundraising is anemic, strengthened only by your own cash transfusions.  Your team is fraught with mismanagement as you have replaced your campaign manager more than once. And the only media attention you manage to amass is when you criticize the top Republican contender.

My friend, you are up against a mighty current that even your own personal wealth cannot stop.  There is a strong grassroots movement behind Scott Walker and for good reason.  He is young, resolute, and has considerable name recognition.  Every decision he makes in Milwaukee County, for better or for worse, will attract more attention than you could generate with a dozen campaign ads.

While you were building a successful company for the past decade, Walker has built himself a noteworthy administrative legacy.  He has battled tax increases, cut spending, and produced budget surpluses when other counties ran major deficits.  With fiscal restraint and wise budgeting, Walker has strengthened the county's municipal bond rating, which as you  know, makes it easier to sell securities.  Walker also has a number of political achievements that will be accentuated during his campaign.

• Walker's county transit system that was deemed "efficient and effective" providing the highest ridership per capita while delivering the lowest per passenger cost.
  
• Walker's county parks won a national gold medal of excellence from American Academy for Park and Recreation Administration and also the National Recreation and Park Association. 
  
• Walker's Mitchell International Airport had record-breaking traffic and national recognition for being the number one least expensive destination in the nation.
  
• Walker's Milwaukee County Behavioral Health Division won an award from Harvard University demonstrating that he has built himself a distinguished reputation.

Walker's legacy is not the only obstacle to your campaign.  You must deal with the fact he's a more viable candidate for governor.

• He has a better record of winning campaigns, which is something any Republican strategist in the party will value and support.  
  
• Walker has better grassroots support situated in every county of Wisconsin, which includes the tea party movement that you have unfortunately ignored. 
  
• And most importantly, Walker is a better match up against Tom Barrett.  This is important.  You know as well as I that Democrats are elected on the basis of winning the Milwaukee and Dane counties.  Walker, by virtue of being popular in Milwaukee County, is a better candidate and more capable of neutralizing Barrett's metropolitan advantage.

Republicans in Wisconsin have been given an opportunity of a lifetime.  With failing democrat strongholds like Massachusetts, immoral scandals permeating Democrats in New York, and tea party winds at the back of fiscally conservative contenders everywhere, you must see that Walker has the best odds of winning this race.

If you continue down your path as a secluded agitator, not only will you become an impediment to repairing our state, but you will also succeed in turning a conservative base against you - a conservative base that would happily support you if you chose to run for the U.S. Senate.

You sir, when you openly criticize Walker, will become a tool in the hands of Mike Tate and the Democrat party - a party that possesses a single candidate free from the political hazards of a primary.  As you told me last year, your ideological approach bears no significant difference to Walker's.  So instead, you have distinguished yourself as a business man that understands the importance of job growth and operates primarily through innovation.  And yet your gubernatorial approach and innovative ideas never took hold in Wisconsin.

Sir, your campaign has not taken root.  I urge you to retire your campaign for governor and put your full support behind the candidate that will stop the spending, reduce taxes, and promote the same business growth that you have advocated.

Genuinely,

Aaron Rodriguez

Toni Clark Awaiting Justice

Another Walker antagonist is enveloped in controversy for filing a false campaign finance report.  County Supervisor Toni Clark was charged today with a felony, to which she is expected to plead guilty.   The felony is punishable by a maximum 3.5 years in prison and possibly a $10,000 fine. 

Apparently, Clark diverted $6,545 in campaign contributions for her personal use, which might involve a gambling problem.  She also lied about an illegal loan she had received and filed an amended campaign report in order to conceal its illegitimacy.  In 2005, she deposited campaign donations into a personal bank account.  And in 2007, she opened up a new account and deposited $2,500 in campaign contributions without the knowledge or consent of her campaign manager and the election commission.  A month later, Clark withdrew and deposited the funds into her personal account.

As an aside, this is the same woman who used nearly $5,000 of taxpayer money to see Obama's Inauguration in January of 2009.  And only after she was discovered, did she offer reimbursement to the county for her trip.

The Entitlement Mindset of Some Politicians

Unfortunately, there is a lot of arrogance in government.  It's just part of the game, and we've learned to accept that politicians are dirty.  After years in office, those elected by the people sometimes feel a sense of entitlement and power - as if they are above the restraints of common law.  A good example of this elitism is when Toni Clark and Elizabeth Coggs deliberately tried to dupe the taxpayers with a trip to D.C.

First, they told Terrence Cooley, Holloway's Chief of Staff, that they were going to visit Representative Gwen Moore and County lobbyists, but neglected to mention that their expensive hotel ($644 a night) was rented to see a newly elected Obama give a history-making acceptance speech.  If the trip was legitimate, why not mention that they planned to hear the President speak?  (To be clear, only Clarke stayed at the hotel since Coggs stayed with relatives in D.C.)

Second, after they had returned, Clarke and Coggs evaded Milwaukee Journal reporter Daniel Bice when he started poking around their business.  When asked about her trip, Toni Clark cut the interview short, and Elizabeth Coggs refused to return calls.  If the trip was legitimate, then why avoid reporters?

And third, it's difficult to believe that Holloway didn't know the primary motive of why Clark and Coggs went to D.C.  Holloway's chief of staff had realized at the time that their trip coincided with the Presidential Inauguration, but refused to speculate whether the trip was plotted for that purpose.

Even Cogg's cousin, Senator Spenser Coggs, couldn't answer why his cousin chose a time of dense traffic when hotel costs were inflated to to $700 a day in order to plan a trip to visit lobbyists in D.C.  It didn't make much sense to him, but it makes perfect sense to me that they were willing to hang taxpayers on the hook in order to see the man they had helped vote into office.

Let Karma Prevail

Ultimately, Clark will lose her job as a Milwaukee County Supervisor when she is sentenced.  In my opinion, it is just one less dirty politician that will remain among the Milwaukee ranks and one less rubber stamp to be used against Scott Walker.