Category Archives: The economy

When Activism Turns Antisocial

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My previous post was about the merchants of Burlington’s Church Street Marketplace seeking legislative action to toughen anti-loitering and vagrancy laws — turning misdemeanors into criminal offenses. My point was that their fear and concern are understandable but misplaced. They face an existential crisis thanks to President Trump’s boneheaded handling of the Covid-19 pandemic. But the way forward is not to kick out or lock up the city’s most vulnerable; it’s to address the root causes of homelessness, substance use, mental illness, etc., in common cause with the city government, social service resources and members of the community.

Now we’ve got the inevitable egregious overreaction to the merchants’ pleas for help: a Twitter campaign urging a boycott of the merchants. One Tweeter, who shall go nameless here, warned signees “Get off the list or you’re in for a bad time.” Yeah, threats are always in season. Another pondered doing their shopping on Amazon instead of downtown retailers. The Burlington Tenants Union chimed in with support for the boycott.

Let’s stop for a moment and think about what we’re all — I hope — trying to accomplish: A city that’s compassionate, that tackles its problems in common cause, that seeks solutions that work for all its people.

The merchants are part of the Burlington community. They are taxpayers and employers. And they are currently going through a period of extreme stress. The last thing they need is a boycott. The last thing the entire city needs is a bunch of vacancies on Church Street. That would hurt the tax base and throw Burlingtonians out of work, leaving the city with fewer resources to tackle its problems.

If you won’t listen to me, perhaps you’d listen to your patron saint, Bernie Sanders.

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The Narrow Parameters of Acceptable Debate

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So how many political parties do we have in Vermont? Two? Three? Umpteen, if you count Liberty Union and whatever Cris Ericson and Emily Peyton have going on and the Mad Hatter of #vtpoli, H. Brooke Paige?

(I know, he’s a Republican. But any day I can mention Mr. Paige is a good day.)

Well, looking at recent policy debates in the Statehouse, you might just conclude that we have a grand total of one: The Moosh Party. Because on a whole range of issues, there’s little disagreement on the fundamentals; the discussion is confined to the details. At a time when Vermont faces some huge challenges, there’s a complete lack of bold thinking in the executive and legislative branches. We’re All In The Box.

The most basic area of consensus is on state finances. There’s no serious talk of raising taxes, cutting taxes or even significantly reforming our tax system. There’s no serious talk of raising or cutting spending. Streamlining or reforming government seems as unattainable as ever.

(When Phil Scott was running for governor in 2016, he talked a lot about “Lean management” as a way to make government more efficient and free up money to pay for new programs without raising taxes. He rarely, if ever, brings up that idea anymore. His state website touts his PIVOT program (Program to Improve Vermont Outcomes Together, and someone was paid taxpayer dollars to come up with that pukey acronym) but — deep into the third year of the Scott Era — doesn’t cite any cost savings. It does boast of 44 PIVOT projects underway and the training of hundreds of state managers and employees in Lean practices. Which makes me suspect that spending on PIVOT has outweighed any actual savings.)

When times are good and the state is enjoying unexpected revenue, the broad consensus is that we shouldn’t spend it — or at least not very much of it. The Republican governor and the four Democratic money committee chairs are in agreement on that. Except perhaps at the margins.

There’s also broad agreement that the state shouldn’t be borrowing any more money. Remember Sen. Michael Sirotkin’s ill-fated proposal to launch another $35 million housing bond this year? He’s a powerful committee chair, and his idea went nowhere. One of the loudest voices in opposition: Democratic Treasurer Beth Pearce, who’s fiercely protective of the state’s bond rating.

All this broad consensus leaves room only for piecemeal action. Take, for example, the legislature finding $6 million in this year’s budget to boost child-care subsidies. Nothing to sneeze at, but advocates will tell you that it’s a drop in the bucket compared to the actual need — for parents trying to keep their jobs and for child-care workers trying to make a living.

And it’s one-time money. That’s what passes for significant accomplishment in 2019.

Here’s another. Universal broadband is widely seen as a necessity for rural Vermont to become economically competitive. This year, the state enacted Act 79, which produces $1.2-1.4 million per year for broadband grants and creates a revolving loan fund for existing and startup internet service providers. A nice step, but nothing like a game-changer.

Meanwhile, the overwhelmingly Democratic legislature whiffed on three signature issues: paid family leave, minimum wage and a tax-and-regulate system for cannabis. What’s notable about those three, besides the whiffing, is that none of them would have cost the state much money. Paid leave? A new tax. Minimum wage? Employers would foot the bill. Cannabis? Would have brought new revenue to state coffers.

Not even on the table: Climate change, housing, education, the tattered mental health system, economic development, seriously addressing income inequality and health care reform, among others. No effort, through increased state aid or some sort of student debt forgiveness, to confront our affordability crisis in higher education. Nothing to address Vermont’s demographic crisis — except for the Scott administration’s dink-and-doink grant programs that only benefit a handful of employers and workers. On climate change, leaders of both parties acknowledge the crisis and our lack of progress toward established climate goals. But propose or approve a truly game-changing agenda? Not on your life.

Literally.

For years, politicians on all sides have talked about ending our reliance on out-of-state prisons. But actually doing something about it? Spending money on facilities or enacting new programs to reduce the inmate population? Nah.

Any effort to close the ridiculously large and still growing wealth gap, either through boosting benefits or job training or education affordability — or through increasing taxes on top earners? All talk, no action.

Health care reform would seem to be a critical need, considering that the Green Mountain Care Board just approved whopping insurance-rate premiums. But do you hear anything besides the gentle shuff-shuff of hand-wringing? Nope. I think elected officials of all stripes are still scarred by then-governor Peter Shumlin’s disastrous reform efforts. Nobody wants to call that monster out from under the bed.

The biggest exception to this depressing parade of cromulence was Act 76, which establishes a revenue source and administrative structure for waterways cleanup. Nice. But it only came after years of ducking the issue as long as humanly possible — even as toxic algae blooms make an annual joke of our alleged commitment to environmental purity, not to mention killing dogs and maybe causing Lou Gehrig’s Disease.

And action only came under threat of federal intervention. Yep, we can thank the Trump EPA for forcing Vermont to clean up its water.

This around-the-middle consensus isn’t only frustrating for those on the left. It’s got to be just as galling for conservatives, who believe the answer to Vermont’s problems lies in cutting taxes, spending and regulation. You’re not getting any of that from Team Scott, much less the legislature.

It’s funny. Vermont is widely seen as bluer-than-blue Bernie Country. But our current crop of elected leaders is comfortably at home in a narrow band of non-threatening incrementalism.

 

 

The budget gap: an alternative story

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A simple narrative has emerged to explain Vermont’s budget gap of roughly $113 million. Oddly, tragically, it’s pretty much the same narrative whether you’re Republican or Democrat.

The Republicans’ version goes like this: The Democrats are out of control! They’re taxing and spending like drunken sailors!

Some liberals raise a fundamental objection to this — but not Gov. Shumlin. Now, he couches it differently; his version is that Vermont’s economic growth has failed to meet expectations and that state spending has overreached. But his underlying assumption — the state has spent beyond its means — is very similar to the Republicans’.

Gee, no wonder he had trouble developing a clear narrative in the 2014 campaign.

It’s true that the economy has underperformed expectations — but that’s not a phenomenon unique to Vermont. Nor is it attributable to our alleged “tax, spend and regulate” ways. By many measures we’re doing better than our northeastern neighbors. And we’re doing a hell of a lot better than states with hard-core free-market governments like Wisconsin, Michigan and Kansas.

(The states where free-market ideology is credited for booming economies enjoy unrelated economic advantages: Texas and North Dakota’s fossil fuel wealth, Arizona and Florida’s retirement havens and influx of immigrants.)

(Yes, immigrants. Most of them are hardworking people who came here in search of a better life. They add energy and ambition as well as cultural spice to our melting pot. We could use more of them here in Vermont.)

There’s an alternate story to tell about how we got into this fix. Strangely enough, it actually shows the Shumlin administration in a positive light. If only the Governor was willing to tell it.

Part of our problem is the structure of our tax system, as previously discussed in this space. ur income tax system has an extremely narrow base because of how we calculate taxable income and allow itemized deductions.  We’re losing tens of millions in potential revenue because our sales tax system has more holes than Swiss cheese. (Sen. Tim Ashe, chair of the Senate Finance Committee, estimates that we’re losing $50 million a year because of Internet sales. That’s not new tax money; it’s money we used to collect and aren’t anymore.)

The rest of the problem is that the Democrats have been responsible stewards, even if it means short-term trouble. They’ve tried to manage state finances in difficult times while maintaining state programs that have a beneficial impact on our present and future well-being.

Programs like Reach Up and expanded health care access and substance abuse treatment aren’t giveaways; they’re aimed at giving Vermonters a way out of systemic poverty. There’s also an immediate benefit: money spent in programs like food stamps and LIHEAP and the Earned Income Tax Credit go directly back into the economy, creating much more positive impact than capital gains tax cuts or corporate tax breaks.

And here’s a great big item that, sadly, I didn’t even realize until Saturday when House Speaker Shap Smith addressed the State Democratic Committee. The Democrats have spent millions to restore full funding to public sector pension plans. Smith mentioned $60 million, and called it a significant reason for our budget troubles.

Which is true. But it’s also the responsible — nay, the legally required — thing to do. The pension gap was created through years of mismanagement under previous administrations. (You know, those administrations that featured budget hawk Tom Pelham in prominent roles.) They took the easy way out of budget predicaments: putting off the day or reckoning. As Smith said, “we’re making up for the sins of the past.”

Really, it’s the Republicans who are bad managers. They are so single-mindedly focused on cutting that they fail to develop any sort of vision for governing. And they undercut the good things that government can, and should, do.

Two more overdue investments. First, the current administration has instituted health care reforms that have produced some waste and a bug-riddled website, but have also cut our uninsured population to 3.7%, compared to a national average of 12%.

And second, it’s making a long-overdue attempt to clean up Lake Champlain. That’s another legacy of the short-sighted practices of past administrations: they ignored the problem and let it get worse. And more expensive to fix.

These are noteworthy accomplishments. They are the right things to do. They are not wild or radical or thoughtless. And they are big reasons why we’re in our current budgetary difficulties.

And that’s it. It’s not a narrative of spendthrift liberals bankrupting the state. It’s a narrative of careful investment in Vermont’s future weighed down by a legacy of bad management and an outdated, creaky tax system.

This is not to say that I agree with everything the Democrats do. They’ve been too careful for my taste. But they do have a compelling story to tell.

Too bad nobody’s telling it.

Mr. Empty Suit steps to the mic

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“I’ve got plenty of great ideas.”

So said Republican Scott Milne during Saturday’s gubernatorial debate. His comment came after Governor Shumlin repeatedly slammed his failure to give “us one single plan” on a variety of issues.

And then Milne, predictably, failed to name any ideas.

Well, he did have one: a two-year cap on property taxes, which would put public school into a dire budget situation because many of their costs will continue to rise. It’d force spending cuts from the top down, the very opposite of his claim to be in favor of local decision-making. But hey, at least it was an idea.

Otherwise, nothing much. At another point he said “I’ve got two ideas.” The first was that the Governor had spent too much time out of state. Which is not an idea; it’s an attack.. The second was the property tax cap.

Sigh.

As I said in an earlier comment, Milne managed to exceed the minimal standard of competence, e.g. he didn’t poop his pants. Shows you how dismal his campaign has been, that keeping his shorts clean seems like an accomplishment.

As for actually putting forward an inspiring message, nope. Not at all. He hammered repeatedly on the same old attack lines he’s used since launching his campaign: Shumlin is “the most progressive, radical Governor” who insists on pursing single-payer health care. Milne’s idea for health care reform?

“I will be working very hard with people to get something figured out.”

That is, word for word, what Scott Milne actually said.

On trying to keep young people in Vermont, his only contribution was to assert that the Shumlin Administration “has not been business friendly,” and Vermont needs “a new tone” in its dealings with business. F-sharp, perhaps?

When asked about problems at the Agency for Human Services, he pivoted back to his attack on the troubled rollout of Vermont Health Connect, and cited it as an example of poor management. When he actually addressed AHS, he said we need an agency that “puts the family first.” How imaginative.

When asked about cutting state spending, he gave a halfhearted shoutout to the discredited Challenges for Change initiative, then said “I’m not into cutting,” and then said property taxes are too high.

Confused?

In his closing statement, Milne referenced his late mother Marion’s run for State House in 1994 when, as Milne tells it, a local politico gave her no chance to win. But she ran anyway and won. And so can Scott Milne, if people only believe. And he closed with a bombshell: “Vermont needs a different path. I believe it needs a more moderate path.”

Having, once again, failed to give any real hint of his preferred path for Vermont. It’s been defined almost entirely in the negative: He wouldn’t repeat the alleged mistakes of Governor Shumlin.

And, as I reported earlier, he’s postponed a meeting with VTDigger’s editorial board because his platform isn’t ready yet.

Scott MIlne’s campaign is very close to flat broke. Its campaign manager just resigned. The best you can say about Milne’s debate performance is that he didn’t flame out. But he did nothing to advance his campaign, to provide a substantive option to Shumlin. Or to Dan Feliciano, for that matter.

He did okay by his standards, but that’s not nearly good enough.

The limits of messaging

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Just finished listening to a Reporter’s Roundtable on VPR*, with three of the better reporters around — VTDigger’s Anne Galloway, VPR’s Peter Hirschfeld, and the Freeploid’s Terri Hallenbeck– examining the entrails of last week’s primary election and the prospects for November. 

*Audio not yet available online, but it should appear here later today. 

Thin gruel, to be sure; the key races are essentially over, with the possible exception of Phil Scott vs. Dean Corren for Lieutenant Governor. But when the race for a mainly ceremonial position is your biggest source of intrigue, well, that tells you all you need to know. 

There was a lot of dancing around the fact that November is in the bag for the Democrats, with the noble exception of Galloway coming right out and saying that Governor Shumlin was going to win. The dancing is understandable, considering that (1) journalists want to appear objective, and (2) as political journalists, they’ve gotta cover this puppy for two more months, and what fun is it when there’s no intrigue? 

Much of the dancing centered on the idea that good “messaging” could carry a Republican candidate into a competitive position. The Dems aren’t invulnerable, the reasoning goes, it’s just that neither Scott Milne nor Dan Feliciano seems capable of delivering a solid, appealing message. 

That’s true, insofar as it goes. But there are three much more powerful factors operating against the Republicans: most voters pay little or no attention to messaging, the electorate is solidly center-left, and today’s Republican Party has little to offer on the key issues in Vermont. 

First, reporters and insiders overestimate the impact of tactics and strategy and messaging. The vast majority of voters have their minds made up before the campaigning starts. The only thing that could change their minds is some sort of shocking revelation or catastrophic event. Some voters do actually watch debates and bring an open mind to campaign coverage, but they only matter when an election is otherwise close. 

Second, it’s obvious from the results of the last decade or so that most voters prefer Democrats. The Legislature has been solidly Democratic for years. Among statewide Republicans, only Jim Douglas and Phil Scott have been able to buck the trend. Both have done so because of their unique personal appeal and by projecting an image of moderation and willingness to compromise. 

And third, Shumlin and the Dems are potentially vulnerable on issues like health care reform, the Department of Children and Families, the economy, taxation (especially school taxes), and the environment (Lake Champlain, the natural gas pipeline). 

On all those issues, the most appealing solutions involve more government, not less. Shumlin is more vulnerable to his left than to his right. 

In spite of Vermont Health Connect’s troubles, health care reform remains popular. Republicans have no answer aside from letting the market do its magic. Fixing DCF would require more resources, or at the very least more effective management. Have the Republicans given anyone reason to believe they care more than the Dems about poor people? Hell, no. Do the Republicans have a track record of good management? Only in the minds of Jim Douglas and Tom Pelham. 

Would the Republicans be better stewards of the environment than Dems? Ha ha. Can they plausibly portray themselves as defenders of public education, which remains extremely popular in Vermont? No; their only solutions are competition and union-busting. Can they convince voters that they’d preserve local control? Not if you could saw money by centralizing. 

On the economy, the Republicans have little to offer aside from the tired, discredited supply-side nonsense. Which took another bullet yesterday with the news (from the Federal Reserve Bank) that our post-Great Recession “recovery” has benefited the wealthy while middle- and working-class wealth has actually declined. One-percenters and corporations have a larger share of our wealth than ever, and all the Republicans can offer is policies that will further enrich the rich. 

And as for taxation, Vermonters may be dissatisfied with rising school taxes and worried about the cost of single-payer health care, but they also favor a robust government that can tackle problems effectively. Most voters don’t want a mindless “cut, cut, cut” approach, and that’s the standard Republican line. 

Here’s what a Republican would have to do, to be competitive on a statewide level: Bring an established reputation for effective governance, or at least an open-minded attitude toward the notion that government can actually solve problems. Express skepticism about political dogma, especially the cherished beliefs of the right. And do that without, somehow, losing too much support among the Republican base. And, finally, regain the support of the business community, which has largely abandoned the VTGOP in favor of a cooperative relationship with the Democrats. 

Now. If a Republican can identify and execute a strategy that accomplishes those things, s/he can win. Otherwise, no amount of good messaging will carry the day. It’s not impossible; there’s at least one potential Republican candidate who could manage it. But he ain’t running this year. 

This was predictable, and should not be mistaken for good news

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In a classic late-Friday newsdump, “sources” have slipped word to Bloomberg News that an impasse has been reached in IBM’s negotiations to sell its chip manufacturing arm to Globalfoundries Inc. “Globalfoundries… made an offer that was rejected by IBM as too low,” says Bloomberg, which called the failure of the talks “a setback for IBM Chief Executive Officer Ginni Rometty.”

She’s been in a race to meet 2015 earnings goals at all costs — most notably, by cutting the workforce and shedding any units that can’t generate profits. The strategery being, I guess, “if we keep shrinking and shrinking, we’ll grow.”

Like diving into a black hole and coming out the other side, eh?

I can believe Globalfoundries was lowballing IBM, since the word all along was that GF was not interested in IBM’s physical plants (including Essex Junction), just its engineers and intellectual property. If GF didn’t want the big costly plants, of course it would undervalue the package.

And besides, if GF wants the engineers and the brains, it sure doesn’t need to buy ’em from IBM. It can just go ahead and recruit, which is exactly what it’s been doing. Paul “The Huntsman” Heintz:

Globalfoundries… has announced in recent weeks that it has hired several top employees from IBM’s Essex Junction and East Fishkill, N.Y., plants. The company has also placed employment ads in papers serving those regions — including the Burlington Free Press.

Any IBMers who want to continue their careers must realize that GF is a better bet than IBM. It means moving, which isn’t for everyone; but GF should be able to entice quite a few people. After all, IBM has become a spectacularly awful place to work — with the constant threat of layoffs and the ever-tightening pressure to produce, produce, produce.

Now, I’m sure there’s some “intellectual property” under IBM’s control that GF would like to have. But naturally it wouldn’t offer anywhere near the amount of money IBM wants. It doesn’t need to buy the IBM assets; it just needs to pilfer the brainpower. Which it should be able to do easily, since its “competition” is the doom chamber of IBM employment.

And as usual, IBM is leaving state and local officials completely in the dark. Get a load of this convoluted statement from Commerce Secretary Pat Moulton about the Bloomberg report:

“I don’t know what that means — whether that’s good news or bad news, but I have not heard anything officially or unofficially,” she said. “Obviously having a company remain here and remain viable is important, so it was hard to know what a Globalfoundries deal — if there was one on the table — would have meant.”

I call that a cotton-candy statement: a teaspoon of substance whipped into a furious froth of nothing. It’s also a measure of the value IBM places on its relationships in Vermont: zero. IBM’s been keeping us completely in the dark for years.

If Globalfoundries was truly uninterested in IBM’s physical plant, a purchase agreement would have been bad news for Vermont. But the collapse of the deal shouldn’t be taken as a good sign. IBM will be even more desperate to spin off the unit. Or simply wind it down. And would any other potential purchaser be interested in an Essex plant that GF “had placed little or no value on… because [it is] too old”?

Two and a half years ago on Green Mountain Daily, I wrote that we should be prepared for IBM’s exit from Vermont within three years. And that it wouldn’t be Governor Shumlin’s fault, at all; it’s a result of IBM’s short-sighted, profit-chasing binge of outsourcing, downsizing, and stock repurchasing. IBM’s domestic workforce has shrunk dramatically in the past decade, and is continuing to do so. Essex is a rubber ducky in the IBM bathtub, the plug has been pulled, and we’re all spinning the drain.

My three-year prophecy is likely to miss, but my larger point remains: don’t expect IBM to stick around much longer. And don’t blame Governor Shumlin when it leaves.

The price we pay for cheap crap

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Two news items on a single theme: Big Mac Mystery Meat, and toxic baubles.

Second one first, ‘cuz there’s a direct Vermont connection. Two-Fisted™ Attorney General Bill Sorrell has filed suit against Dollar Tree, purveyor of cheap crap and nothing but cheap crap, “for selling jewelry that contains toxic substances.”

What’s more, DT is a repeat offender. Sorrell says the bottom-barrel retailer is in violation of an earlier agreement to stop selling jewelry with unacceptably high levels of lead and cadmium. Charming. Sorrell’s office says the chain has sold “over 30,000 individual items… through its stores in Barre, Bennington, Burlington, Derby/Newport, and Rutland.”

The original 2010 settlement arose from what the AG’s office calls “a growing awareness… that many products imported from China and other countries contained toxic substances.” And the release adds, not at all reassuringly, that

“…although Dollar Tree routinely requires the testing of products it purchases for resale to consumers, its testing protocol does not ensure that all items of jewelry sold in its stores are free of toxic substances.”

Uh-huh. They require testing, but their testing program “does not ensure” the safety of their customers. I guess if they had a really thorough testing program, that’d interfere with the free and open flow of cheap crap. Which probably violates Dollar Tree’s constitutional right of free speech. Heck, if money is speech, isn’t a commercial transaction also speech?

On to Mystery Meat. McDonald’s, purveyor of oddly gray “hamburgers,” is portraying itself as “a bit deceived” over an audit of a Chinese meat supplier. The Daily Mail reports that Shanghai Husi Food was shut down after “a TV report showed workers apparently picking up meat from the factory floor, as well as mixing meat beyond its expiration date with fresh produce.” Yum, yum!

Mickey D’s CEO Don Thompson says “We are no longer serving product from the primary facility there that has the challenges and the issues.” I should hope so.

But that’s not the bad news. The bad news is this, from CNBC:

McDonald’s and many other food companies rely on third parties to perform audits to check whether facilities are complying with food safety rules and other regulations. It is not uncommon for suppliers at the center of food safety scandals to have received high marks on their audits.

Apparently, a whole lot of weak links in our food chain is the hidden price we pay for Cheap McCrap. And cheap pizza and “chicken,” since KFC and Pizza Hut have also served meat from Husi’s factory floor and compost heap.

At least they didn’t find elevated levels of lead or cadmium. Then again, how can we be sure they’re testing for that?

Oh, and let’s add Item 2.1 to my list: the opening of Pier 1 in South Burlington, bringing a whole world of cheap crap to one convenient location. Not to mention screwing its workers:

Long-time Williston resident Jeffery Fucci… will manage the new store, leading a team of approximately 35-40 associates. Associate hours fluctuate based on the needs of the business and the season.

That’s right, folks. All the “associates” will see their hours fluctuate “based on the needs of the business.” Yay, more crappy jobs for Vermont!

Vermont Republicans quickly becoming incoherent

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Looks like the Vermont Republican Party has decided a guns-a-blazin’, all-out hysterical attack on “the stagnant Shumlin economy” is their ticket to the meager legislative gains they’re hoping for in November.

And, naturally, they’re doubling down on the “F” grade supposedly given Vermont in a national survey of small business owners. Not only are they repeating their earlier claims, they’re getting the facts even wronger.

The VTGOP’s latest news release again refers to “a report by highly respected national magazine The Economist which ranked Vermont among 5 states receiving a grade of ‘F’ for their small business friendliness.”

Okay, where do we begin.

It’s not a “report,” it was a survey. An unscientific survey in which thousands of questionnaires were sent to business owners nationwide.

It wasn’t by “The Economist,” it was by Thumbtack.com.

The Economist isn’t a “national magazine.” It’s a global one, and its headquarters are in Great Britain.

And, once again, Vermont did not receive a grade — at all — in this year’s survey. The “F” came out of the 2012 survey. Thumbtack didn’t receive enough responses from Vermont businesspeople to include the state in this year’s grades.

This is like a game of telephone with only one player — who, even so, manages to thoroughly garble the message as it passes from mouth to ear and on to brain. Ironically, the VTGOP’s news release includes this line:

The first step in solving a problem is recognizing and accurately defining the problem itself.

Uh-huh. And by “accurately defining the problem,” the GOP apparently means “relying on two-year-old figures from an unscientific survey.” Not to mention “exaggerating the issue with overheated rhetoric.”

This whole schemozzle shows how desperate the Republicans are for messaging material, that they have to keep on hammering over and over again on a discredited talking point. It’s embarrassing.

The news release goes on to depict Vermont’s economy as in “crisis,” which it clearly is not. We have our troubles, but crisis? No — “crisis” is what George W. Bush left us with. And President Obama and Governor Shumlin have been trying to dig out from under the Bush rubble ever since.

The Republicans also assert that “Vermont Democrats denied there were any problems with Vermont’s… economy,” which is also patently untrue. I don’t think there’s a Democrat in the state who would argue that we don’t have our share of problems and issues, and the Shumlin Administration has been trying — in its own way, whether you agree with it or not — to make things better. When you consider how awful things were in 2008-09, plus the severe blow of Tropical Storm Irene in the summer of 2011, things in Vermont have gotten a whole lot better.

Republicans are already in danger of losing touch with reality, and losing credibility with undecided and centrist voters. Hysterical, over-the-top rhetoric won’t convince anyone that we’re on the cusp of apocalypse.

Speaking of doubling down, the news release concludes with a challenge for a debate on the economy between party chairs “Super Dave” Sunderland and Dottie Deans “in a neutral forum.” This bit of red-flag theatricality is completely meaningless. The Republicans hope that Deans ignores the challenge, so they can accuse her of ducking the issues.

In fact, the job of the party chair isn’t to take part in debates; that’s what candidates do. Party chairs are supposed to spend their time managing and organizing their parties. And that, in itself, is at least a job and a half.

At least it is for Deans, who leads an active, vibrant organization. Super Dave, on the other hand, has a paid staff of ONE to oversee, a sickly grassroots network, and a meager budget. Maybe he has time for pointless media events, but Deans has work to do.

Woolf Outpaces Ag Sector as Manure Producer

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Once a week, UVM economist Art Woolf “graces” the pages of the Burlington Free Press with a column called “How We’re Doing,” a platform for his Not-So-Deep Thoughts about the state of Vermont’s economy. Generally, Woolf’s columns present a distasteful combination of lazy analysis, careless oversimplification, conventional thinking, and free-market dogmatism.

In this week’s emission, “Few Vermont Farms Generate Substantial Income,” Woolf takes a big hearty dump on Vermont’s agriculture sector. He misses quite a few points on the way to a simplistic debunking of agriculture as anything other than a picturesque hobby — not unlike conservatives’ frequent pooh-poohing of “trust fund babies” who seek the meaning of life by idly churning the soil.

Woolf’s two main points are: (1) the financially dominant part of the ag sector is dairy production rather than the oft-touted locavore and specialty-producer movements, and (2) the entire ag sector is pretty much insignificant to Vermont’s overall economy. He highlights statistics that show relatively low employment in agriculture, and low earnings for the vast majority of farmers. And he ends on a downright insulting note:

Most farmers who keep the land cleared and grow the fresh food that we enjoy eating do it as much for their own enjoyment as for the monetary benefits it brings them.

Yeah, thanks a lot, Art. Next time you go to a farmers market, may a producer spit on your strawberries.

Now, I’m not an expert on the agricultural economy. But even I can see that Woolf’s argument is overly simplistic and drastically understates farming’s contributions to our economy — tangible and otherwise. In no particular order:

— Woolf notes that agriculture’s share of Vermont’s eocnomic output, 1.1% in 2013, “has been pretty constant for the past two decades.” I say that’s a remarkable achievement. Our dairy sector has been contracting rapidly; if the ag economy has remained steady, that means other parts are growing. But I guess that didn’t fit into Woolf’s chosen narrative that Farming Is For Suckers.

— Agriculture may be a small part of the entire state’s economy, but I’ll bet it’s the lifeblood of many rural communities. If we had no farming — or if we allowed agriculture to die off instead of trying to keep it vibrant — Vermont’s rural economy would be much worse off than it is already.

— By focusing on direct employment and income, Woolf ignores agriculture’s multiplier effect. How many small businesses cater to farmers, both professional and amateur? How many food producers (Cabot Cheese. Ben & Jerry’s) and restaurants profit from the bounty of Vermont farms and their image of high quality? For many eateries, “local” is a core aspect of their appeal, heavily promoted on their signage and menus.

For just one other example, check out any farmers market, and you’ll see ancillary benefits all around. Non-market vendors surround the market proper. Nonprofit groups raise money and awareness for their causes. Downtowns benefit from greatly increased foot traffic on market days.

— The presence of agriculture is a key aspect of Vermont’s tourism industry. Many visitors come to Vermont specifically for the food, the specialty products, farm tourism, and the scenic vistas only visible because farmers are keeping their land clear. Not to mention the scenic appeal of farms themselves. Woolf gives agriculture no credit for that contribution.

— Woolf bemoans the lack of large-scale farming: “Fewer than one in six farms sold more than $100,000 worth of goods… [and] only 850 farmers reported earning income of more than $50,000.” Well, Vermont agriculture is never going to be a large-scale commodity operation because of our topography. There isn’t enough flat, arable land. Vermont farming is always going to include a large quantity of smaller operations.

— Two of Woolf’s key measures are farm employment and income from sales. He points out that most farmers also earn money in other jobs, and that many farms don’t generate enough sales to support a farmer, much less a family. This understates the economic impact of farming in some crucial ways.

Most importantly, a farm may be productive far beyond actual sales. Farm families benefit from living off the produce of their land even if they don’t sell all of it. This doesn’t show up in traditional statistics (or on tax returns), but it helps keep many Vermonters and their communities afloat if not vibrant.

I also suspect there’s a hefty “informal economy” in the ag sector, through bartering or cash transactions. Many farm employees’ incomes are supplemented by a share of the farm’s crops. These things don’t show up in Woolf’s charts and tables.

— Woolf’s dismissive close — “most farmers… do it as much for their own enjoyment as for the monetary benefits it brings them.” Darn tootin’, Art. Indeed, most people in any walk of life “do it as much for their own enjoyment as for the monetary benefits.” Don’t we all seek employment that nourishes the mind and the soul as well as the checkbook? Don’t we all, at some time or other, choose a less remunerative path because we think it’ll be more satisfying? Heck, even the gimlet-eyed likes of John McClaughry and Rob Roper have chosen to work in the nonprofit field instead of, oh, investment banking or sales. And Woolf himself could probably make more money if he moved to a larger university or became a corporate consultant.

There’s a reason our Founding Fathers called for “Life, Liberty, and the Pursuit of Happiness” instead of “Life, Liberty, and Profit Maximization.”

— Finally, Woolf ignores the hard work that’s gone toward growing the ag economy. It’s already paid substantial dividends, measurable and otherwise. Organizations like the Vermont Sustainable Jobs Fund, Rural Vermont, and the Northeast Organic Farmers Association of Vermont, are helping support and foster an agricultural sector that combines the old and the new in ways that will bolster our economy and help preserve the best of Vermont. And, Woolf notwithstanding, provide a living for a goodly number of Vermonters.

If agriculture wasn’t economically important, I doubt that so many nonprofits and governmental operations would be doing so much to strengthen it. Plowing under the farm fields and building subdivisions would be a much easier, shorter path to economic growth; but what kind of Vermont would be the result?

 

All right, who asked Tommy One-Note for an encore?

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It’s been awhile since Tom Pelham, self-proclaimed prophet of fiscal restraint, graced us with one of his interchangeable opinion pieces. But here he comes again, with yet another screed on Vermont’s impending financial doom.

Hey, you keep repeating it, it’s gotta be right sometime, no?

The latest installment, entitled “Inevitable Consequences,” is all about the same stuff as every other Tom Pelham wheeze: the state is on the edge of the abyss because we (by which he means profligate Democrats) are spending beyond our means.

Republicans have, of course, been singing this identical tune for several years now. We are still waiting for the cataclysm to arrive. But hey, they keep repeating it, they’ve gotta be right sometime, no?

Tommy One-Note begins with his one and only guiding principle of governance: “sustainable spending requires that growth in government spending reasonably equate to growth in the underlying economy.” Which is an absurdly dogmatic approach to government, or anything else. But more on that later.

He cites an array of statistics in support of his case that Vermont’s population is stagnant, while public sector spending continues to grow. He sees the gap growing wider and wider until it becomes an unbridgeable chasm.

And you’ll never guess what his solution is.

That’s right, Challenges for Change, the discredited Douglas Administration initiative for which Tom Pelham is the sole remaining cheerleader. There’s good reason for that: Challenges for Change was a bust. 

Before he became Governor, Peter Shumlin was a notable proponent of CFC, touting it as “a great success.” But when he was actually running the joint, he discovered that CFC was a hollow shell, whose projected savings “may not likely be realized.” CFC had fallen far short of its goal in FY 2011, and there was no evidence it would suddenly kick into gear.

“It was a big disappointment and a failure,” Sen. Vince Illuzzi, the Republican chairman of the Senate Committee on Economic Development said last week. “We would have saved time and money if we had simply trimmed all departments’ budgets by 2 to 3 percent.”

And a top House Republican, Patti Komline, called CFC “smoke and mirrors” and “a dismal failure.”

In short, the abandonment of CFC was not, as Pelham claims, due to a lack of fiscal restraint by governing liberals; it was a bipartisan dismissal of a failed experiment. And yet, Pelham still clings to those savings estimates that had lost credibility among virtually everyone not named Tom Pelham.

That’s not the end of Pelham’s myopic approach to budgeting. He says that state spending has risen in spite of a shrinking workforce and a sluggish economic recovery. His reasoning includes the  unstated assumption that, if the state had spent less money, the Vermont economy would have performed exactly the same.

Which is nonsense. Many states fell into the trap of cutting spending in mid-recession, and were rewarded with even slower growth in jobs, production, and tax revenue. Pelham appears to believe that the “extra” money spent by Shumlin & Co. might as well have been tossed into a bonfire — when, in fact, public-sector spending has a beneficial impact on the economy. Just about every state program — transportation, human services, education, corrections, etc., etc. — puts money into the economy. The Keynesian approach mandates accelerated spending in bad economic times, in order to get the engine going at full speed again.

Also, many areas of public sector spending make our economy stronger, and our people safer, healthier, and better educated. That equals progress. And most of those investments would never be made by the private sector. If government doesn’t act, shit don’t get done. Within his own definition of fiscal restraint, Governor Shumlin is making wise investments in clean energy, education, and other areas that will strengthen Vermont in the future.

I’m certainly not saying we should waste money. Indeed, as a liberal, I feel strongly that the public sector should operate as efficiently as possible. And in fact, far from completely abandoning Challenges for Change, the Shumlin Administration has used some of its principles and process in writing budgets and managing the government. Which is another Pelhamian fallacy: some of the relatively meager savings promised in CFC have, in fact, been realized.

It’s just that the Governor has chosen not to bank the savings, but rather to invest them in Vermont’s people and economy. That’s why the financial doomsday predicted by Pelham and others has stubbornly refused to materialize: if Shumlin’s policies work, the economy will improve and revenues will increase. It’s worked very well so far, to the tune of a historically low unemployment rate and an economy that weathered the Great Recession far better than most.

In short, what I’m saying is, Tom Pelham can shut up now. He is wrong, and no amount of repetition will make him less wrong.