Daily Archives: February 23, 2015

Grüberdämmerung

Ah, Jonathan Gruber, the gift that keeps on taking.

The latest twist in this uncomic opera: Auditor Doug Hoffer has examined Gruber’s invoices for consulting work on behalf of the Shumlin adminstration, and found them seriously wanting.

In Hoffer’s words, his review of documents “raised questions about Dr. Gruber’s billing practices and the State’s monitoring and enforcement of particular contract provisions.” More:

Dr. Gruber’s invoices referred only to “consulting and modeling” and offered no details about specific tasks. In the broadest sense, those three words describe the work performed, but such generalities do not appear to satisfy the intent of the contract.

It’s like taking a math test where you’re asked to show your work, and you turn in a sheet with “WORK” in big letters on an otherwise blank page.

Hoffer further states that top Shumlin officials Robin Lunge and Michael Costa “were aware of the need for more details in the invoices, but approved them nonetheless. … [they] had an obligation to request additional detail from Dr. Gruber, and they failed to do so.”

Gruber’s first and second invoices raise suspicion because each showed the same round number of hours worked (100 for Gruber and 500 for research assistants). Hoffer judges the round figures, and the fact that two invoices totaled exactly the same, “implausible.” He concludes that the administration “ignored the obvious signs that something was amiss.”

To me, this is the real Gruber scandal. The conservative shitfit over a handful of intemperate remarks — made during a period of years in which Gruber must have spoken on the record hundreds of times — was nothing more than political opportunism by the opponents of health care reform. But this?

Even if Gruber was invoicing to the best of his ability, it certainly reveals shoddy management by the Shumlin administration. Which is, unfortunately, of a piece with the administration’s general performance on health care reform. Did they take a relaxed approach to spending money because so much of it came from the federal coffers? Perhaps.

Here’s another fact that reinforces my interpretation. Late last year, Gruber submitted two more invoices. In an email to Hoffer earlier this month, according to VTDigger’s Morgan True, Lunge wrote that the administration was “no longer satisfied with the level of detail provided” in those later invoices.

Why “no longer”? Because Hoffer was examining the invoices and they knew they’d be embarrassed? If there’s another explanation, I’d like to hear it.

There are other problems, as reported by True: Tax documents appear to show that Gruber actually paid his research assistant far less than the amount received from Vermont for the RA’s work. DId he pocket the rest? Did the state’s lax oversight let him get away with it?

I’m a liberal, and I’m strongly in favor of universal access to health care. Our current system is an expensive stinkin’ mess, and no amount of wrongdoing by Gruber or others will convince me that reform is a mistake. But in my book, my fandom only feeds my desire for sound management by those we’ve empowered to enact reform on our behalf, and with our dollars.

The Gruber fiasco makes me wonder about the administration’s oversight of all the other consultancies associated with the reform effort. And, for that matter, its handling of the entire process.

Hoffer has referred his findings to Attorney General Bill Sorrell, who says Gruber’s invoicing raises “major questions.” He says he will meet with administration officials to see “what evidence and records are available to justify the billing amount.”

On behalf of health care reform supporters, and those who backed Peter Shumlin because of his promises to institute unversal coverage, all I can say is I hope there are no more shoes to drop. I fear that we’re only just getting our first peek inside the closet.

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Choosing enemies

In case you were wondering which politicians are most feared by the other side, just check out recent press releases from the two major parties.

The Dems reacted swiftly, and harshly, to Lt. Gov. Phil Scott’s basket o’ chestnuts (issued, not through his own website, but through his government account, hmm) on the Plasan closing:

“Phil Scott should be ashamed of himself. Yesterday he sought to use news of job losses due to defense cuts and the winding down of wars throughout the world to advance his political career. These are real people’s lives, not poker chips in Lt. Gov. Scott’s political game. As the company itself said, the closure of the Plasan plant in Bennington has nothing to do with Vermont and everything to do with the fact that America is spending less on military contracts. But that didn’t stop Lt. Gov. Scott from trying to use these real individuals’ pain to try and tear down Vermont’s reputation for his own political gain. We’re better than that in Vermont.”

Ooh, harsh. You might think they’re worried about a Scott for Governor candidacy in 2016.

Well, that’s not a surprise. A little more unexpected was a recent series of releases from the VTGOP, little noticed nor long remembered, lambasting “the Shumlin-Shap Smith Economy.”

Gee, I hadn’t realized that Shap Smith had joined the Shumlin administration, or that he had any more responsibility for the economy than, say, anyone in the Cabinet. Or, for that matter, poor unfeared John Campbell.

I’m sure that Shap is duly flattered by the backhanded show of respect.

The real lessons of Plasan

Vermont’s pro-business community couldn’t hardly wait to score a cheap political point (and, as usual, soil the state’s reputation) after Plasan’s announcement that it was relocating to Michigan. Decent interval, bah: we’ve got a boilerplate press release ready to go.

Lt. Gov. Phil Scott did the honors for the VTGOP, offering a quick word of sympathy to Plasan’s workforce and then pivoting to the red meat:

This announcement is yet another clear sign that we in Montpelier must put our full focus on not only protecting, but on growing Vermont’s economy and face the reality that we are competing in a regional, national and global marketplace. We cannot continue to blame “forces beyond our control” for our job losses, but turn the mirror back on ourselves and ask ourselves: “What can we do to change the direction of this trend? How can we make Vermont better?”

The best part is Scott’s dismissal of “forces beyond our control,” when Plasan made it abundantly clear that Vermont’s business climate had nothing to do with its decision, and Vermont couldn’t have done anything to change it. But let’s not let a little inconvenient truth get in the way of a stale talking point.

Former Wall Street supremo Bruce Lisman kept it simple; he made time for one self-congratulatory Tweet, with nary a word of sympathy for the workers.

(The link is to WCAX’s story about the Plasan closing.)

Nice, Bruce. Way to show your concern for the common folk.

Okay, so the Usual Suspects reacted in the usual way: grabbing at any available pretext for regurgitating their political cud. (Please chew with your mouths closed.) But there are lessons we can learn from the departure of Plasan and other industries, and things we should bear in mind.

FIrst, let’s re-examine the unique strengths of Vermont. We do have our share of weaknesses, even if you omit the tired bromides of rightist politicos. So why do so many businesses establish themselves here or move here? Why does anybody stay? Why don’t they all move to Michigan or Texas or Mississippi?

Quality of life must be near the top of the list. Our topflight public school system is a draw. We have some very nice cities and small towns, good places to call home. Low rates of violent crime. Abundant recreation. A market small enough that entrepreneurs can gain a foothold before venturing out into the big time. (Ben & Jerry’s would have had a much harder time starting out in a big state with big distribution systems.)

I’m sure there are others. My point is, before we try to tear down Vermont, let’s figure out what we’re good at, do what we can to make it even better, and market the hell out of it.

Okay, so now: what are our weaknesses?

We should certainly review the items on the VTGOP hit list. If there are ways to smooth regulatory pathways without selling our souls, great. If forms or bureaucratic procedures are cumbersome, simplify them. But there’s no way we can compete with bigger states or other countries on things like taxes and incentives. Vermont can’t come anywhere near the packages being offered by New York state, for instance. We can’t be as low-tax as Florida or as development-friendly as Arizona, nor would I want us to be. That’s why our first priority should be identifying and maximizing our strengths.

Beyond the usual GOP talking points, I see three major areas that are drawbacks for Vermont’s business climate. In no particular order:

The high cost of post-high school education. It’s the one thing we consistently hear from business owners (as opposed to their political mouthpieces): “We can’t find enough skilled workers. We can’t fill available jobs.”

The cost of attending our public colleges and universities is absurdly high — especially at the community college level. Governor Shumlin has done some incremental things to nibble away at this problem, but has failed to tackle it in a thorough, systemic way.

Getting around. When Chris Graff wrote his memoir a few years ago, he ranked the top stories in recent Vermont history. His pick for #1: the coming of the interstate freeways. They made it possible to travel and transport goods much more quickly, at least in certain corridors. They brought dramatic change to Vermont — mostly for the good.

But large stretches of Vermont are still remote — or remote enough that it’s a significant competitive disadvantage. The biggest obstacle for places like Bennington and Rutland is the lack of high-speed roadway. The best thing we could do for them is turn U.S. 7 into a freeway. We could also use speedier corridors across central and southern Vermont.

(We pause while liberal readers gasp for breath.)

Also, and just as significantly, we need more public transportation. This is a tough nut to crack in a place with a small, scattered population, but if it was easier to get around Vermont without a car, it’d help convince people to live somewhere besides Chittenden County.

The lack of housing, for purchase and rental. One of the biggest drags on our economy is the aging demographic. What do young families need? Rental properties and small- to mid-sized houses. Just what we don’t have.

This is one area of regulation that needs to be loosened in a targeted way. We need to do more to encourage affordable housing — by which I don’t just mean Section 8 or mobile homes, I mean houses costing less than $250,000 and enough rental stock to keep rents reasonable. I’d like to see an emphasis on in-fill housing in existing cities and towns. I don’t want to open the regulatory door to more suburban sprawl.

Housing affordability touches on a fundamental problem with our 21st Century economy: wage stagnation in the middle and working classes. Part of the problem with affordability is depressed wages, something that’s beyond the scope of this post. But as long as young people are starting their lives with college debt and low salaries, we need to help them find housing that fits their budgets.

So there you have it. My initial prescription for improving Vermont’s business climate. And it has nothing (much) to do with taxation or regulation.