So why can't good things happen to bad people?
If we define "good things" like Job does, growing old and increasing in power, we could ask what this does to those who are unjust. For one thing, it largely entrenches their way of acting. They assume they can get away with it. There really isn't any higher judge, so why not keep on doing injustice? Since there really is a higher Judge, the lack of punishment in the present time actually reinforces an evil way of living, setting them up for either (a) greater judgment down the road in the present life or (b) even greater judgment when they have to answer to God in the next life. So why do good things happen to bad people? Not because God doesn't punish the wicked but because the lack of punishment in the present is itself the most severe form of punishment possible.
Listen to Karl Barth's inimitable way of putting this point: "The forgetting of the true God is already itself the breaking loose of His wrath against those who forget Him (1:18). The enterprise of setting up the ‘No-God’ is avenged by its success…Our conduct becomes governed precisely by what we desire. By a strict inevitability we reach the goal we have set before us. The images and likenesses, whose meaning we have failed to perceive, become themselves purpose and content and end. And now men have really become slaves and puppets of things…And now there is no higher power to protect them from what they have set on high." (from Epistle to the Romans, 51).
In this light, the most gracious thing God can do for anyone acting out of line with his will is to send some kind of judgment as a wake-up call. As with the scattering at the Tower of Babel, Nebuchadnezzar in the book of Daniel, or the exile of Israel, God's judgment turns out to be a great blessing. It serves to awaken people to the importance of acknowledging God as God and living in line with his will. A clear biblical refrain is that the Lord chastens those whom he loves (Heb. 12:6; Prov. 3:12; Rev. 3:19).
So can good things happen to bad people? In one sense, no, because "good things" make us complacent when we're living out of line with God's will. In another sense, however, God often brings about the best possible thing for those living out of line with his will: his judgment. We might not think of this as a good thing according to our logic. But, biblically speaking, it's the only truly good thing that can happen to bad people. And this discussion ultimately points us to the cross of Christ, where God's ultimate judgment and ultimate blessing meet.
One final point, to bring us back to where we started: was Michigan's victory over MSU was a good thing or bad thing? I'll let you decide.