To Have And To Have More

Vermont Governor Peter Shumlin, when not busily touting the successes of his single-payer campaign, recently spoke about how vital the tourism industry is to Vermont, and how the state is committed to boosting tourism in the state.

“Columbus Day holiday weekend is the busiest of the year in Vermont, with visitors heading to hiking trails, inns and lodges, museums, restaurants and other attractions across the entire state,” Gov. Shumlin said. “Given the importance of this industry to Vermont’s economy and job creation, I’m thrilled we’ve had such a strong year, and committed to doing what it takes to ensure visitors across the globe know how much Vermont has to offer.”

Gov. Shumlin noted that the state committed $310,000 to an advertising campaign designed to bring visitors from New York and Boston (see attached photo). More than 2.7 million tourists travel from New York and Massachusetts annually to Vermont, bringing to $370 million the annual spending by visitors. Included in the advertising package is an editorial, print and digital campaign, as well as broad marketing.

Outdoor recreation activity generates $2.5 billion in Vermont retail sales and services (12 percent of gross state product) annually. That sector alone results in $753 million in salaries and wages for 34,000 jobs – and $176 million in state tax revenue.

Well, promoting tourism is a good thing, but should Shumlin be “thrilled” about this:

Tourism Industry salary per job

 

 

 

The bulk of tourism industry jobs are not going to cover the cost of living in Vermont, at least not in the traditional sense of “living”, meaning owning a home, car, etc.  The stat above equates to $11/hour, and I’m fairly confident that the requirements to buy even a 2-bedroom condo anywhere in Vermont won’t be fulfilled by that kind of income.

In fact, if Peter was interested in pitching an industry to work in, he need look no further than the office building he sometimes works in for inspiration.  The government sector of Vermont’s economy has consistently higher earnings than the private sector.  From BLS.gov:

I'm noticing a trend here.

I’m noticing a trend here.

In fact, the annual difference between the salaries in the two sectors would at least cover the cost of a hot tub or a new snowmobile – if you’re on the right side of the two charts:

The bitter fruits of political victory.

The bitter fruits of political victory.

Part of the governor’s job is to cheerlead – so Shumlin’s going to tout “good” news, by hiding or conveniently ignoring the relevant data.  Regardless of the success of the tourism industry, it is an industry dominated by lower-paying jobs, not the kinds of jobs that create massive influxes of highly-educated professionals from out of state, looking to live the rest of their lives in the mountains of Vermont.  As has been recently discussed, Vermont’s labor outlook is dominated by lower-paying jobs with very minimal education requirements, and that’s not the mark of a vibrant and growing economy.  Ideally, the tourism sector should be the slowest-growing in terms of job opportunities, playing catchup to manufacturing, finance, professional services, etc., the sectors that are much higher-paying, stable, with significant career development potential, not because we want fewer jobs, but because we want real job growth in jobs that can support families trying to carve out their existence in the Green Mountains.

Hey, these clothes don't dry themselves, and those electric bills pile up in a hurry, especially since Shumlin helped shut down Vermont Yankee.

Hey, these clothes don’t dry themselves, and those electric bills pile up in a hurry, especially since Shumlin helped shut down Vermont Yankee.

Obscenity Redefined

The Senator with the most obscene haircut in 2014 recently complained, again, about the “incredible and obscene” level of wealth inequality in the US.  Despite the tired nature of this old saw, Bernie himself is a key player and contributor to this obscenity, and

Damn, math is *hard*.

Damn, math is *hard*.

seems to miss, entirely, the fact that if he wasn’t busily spending trillions we don’t have and will never have, the economy might recover, and more jobs would become available.

BURLINGTON, Vt., Oct. 4 – U.S. Sen. Bernie Sanders (I-Vt.) said today that the “incredible and obscene” level of income and wealth inequality in America has become a danger to our economic and political systems – and must be addressed. 

According to a new Forbes magazine tally, the 400 wealthiest Americans are now worth $2.29 trillion. Their combined wealth grew last year by $270 billion – a 13 percent increase.  These billionaires now own more wealth than the bottom half of America – more than 150 million people. 

Sanders’ fix?  Let’s ask Congress to do something!  They really know what they’re doing!

“Congress must summon the courage to take on their big money campaign contributors and pass legislation that asks the wealthy to start paying their fair share of taxes and overturns the disastrous Supreme Court decision on Citizens United.”

Well, that was easy.  Congress need only do two things and wealth inequality is fixed.  As if being unequal in earnings is a bad thing by definition.  If I work two jobs and earn 50% more than my neighbor does who works only one job, are we “unequal”?

But still, this is Sanders, and asking Congress to do something – like pass a budget – might be something they’re not equipped to perform.  They can pass a 2,000 page monstrosity without reading it, but this wealth inequality thing should be a snap.

Here’s the deal on the “fair share”, Senator, and pay attention this time, because you don’t seem to be getting it:  Half the country pays no net income taxes.  Of the half that do pay income taxes, the top half of this group pays 97% of all income taxes collected.  I agree with Sanders (gasp!): that is unfair, to the people paying virtually all the income tax in this country.

That top half is a lot more than the evil 1%.  It includes that vaunted “middle class”, the top end of which can earn over $250,000 per year.  These people are not billionaires, swimming in pools filled with gold coins.  They are professionals: engineers, lawyers, doctors, managers, IT administrators, contractors, and if these people are married, it’s not that rare to find yourself over that $250K threshold.  These are people who work for a living, and the market pays them their “fair share” as determined by supply and demand for their work, not as determined by a Marxist price-setter sitting in a dank sub-basement cave somewhere in DC, where social “justice” is meted out through transfer payments.

If you really want to see an obscenity, how about all the federal spending combined – and we’re setting world records in spending/obscenities in the Congresses that Senator Sanders is a willing participate in – does not effect median household income.  At all.  In fact, if there’s a correlation between federal spending and incomes, it’s a negative correlation.  As federal surpluses increase, household income decreases.

I’m no Marxist theorist, but that seems to be the reverse of the intended effect, no?

Deficits go up and household income decreases?  Golly!

Deficits go up and household income decreases? Golly!

Here are a few other obscenities that Sanders seems to ignore, and are directly leading to the results of virtually zero median household income growth:

1.  As US debt goes up, real median household income goes down.  So Sanders’ solution of more, obscene, and ridiculous federal spending, at record levels of debt, does not fix one damn thing regarding individual income.  If, indeed, that is the federal government’s job, and if it could even do that if 535 knuckleheads thought that it should be so.

Is Bernie going to pay that big loan off for the middle class?  They'll be paying for that via the labor of their children's children's.....children.

Is Bernie going to pay that big loan off for the middle class? They’ll be paying for that via the labor of their children’s children’s…..children.

 

2.  It’s difficult to participate in an economy when the bulk of the job growth is in lower-paying jobs, and the federal gov’t has created safety nets, well, they’re more like safety condos, that make the decision not to work easier than ever before in the history of man.  The Bureau of Labor Statistics shows that in their projections for job growth through 2012, of the top ten categories of jobs with the most growth, only 2 of them require any education beyond high school.

Whatever we're doing, it's not working.

Whatever we’re doing, it’s not working.

3.  Obamacare – which Sanders has supported all along, and has long called for the nationalization of health care, like those other successful countries such as the former Soviet Union and Cuba – will reduce employment by 3%, according to the Mercatus center:

Much of the ACA’s tax effect resembles unemployment insurance: both encourage layoffs and discourage people from returning to work. The ACA’s overall impact on employment, however, will arguably be larger than that of any single piece of legislation since World War II.

  • The ACA’s employment taxes create strong incentives to work less. The health subsidies’ structure will put millions in a position in which working part time (29 hours or fewer, as defined by the ACA) will yield more disposable income than working their normal full-time schedule.
  • The reduction in weekly employment due to these ACA disincentives is estimated to be about 3 percent, or about 4 million fewer full-time-equivalent workers. This is the aggregate result of the law’s employment disincentives, and is nearly double the impact most recently estimated by the Congressional Budget Office.
  • Nearly half of American workers will be affected by at least one of the ACA’s employment taxes—and this does not account for the indirect effect on others as the labor market adjusts.
  • The ACA will push more women than men into part-time work. Because a greater percentage of women work just above 30 hours per week, it is women who will be more likely to drop to part-time work as defined by the ACA.

4.  Oh, and Bernie seems to have no problem getting his nest feathered on the public dime.  Bernie’s annual average growth rate in net worth 2004-2012 was 29%.  The average American’s growth rate for the same period?  -0.94%.  So when Bernie’s telling you he’s working for the little guy, remember that in Berniespeak, little guy means “Bernie Sanders”.

I didn't realize Socialism had such a high rate of return.

I didn’t realize Socialism had such a high rate of return.

 

In short, the Senator himself, through the policies he’s supported, are exacerbating the wealth inequality he so loudly trumpets as the biggest scourge of our time.  It could just be that the biggest problem is not wealth inequality, but wealth transfer, and that the government that Sanders works in is responsible for creating it in the first place.  Instead of demonizing companies that actually employ people, perhaps Bernie should start demonizing the catastrophic spending he’s been responsible for all of his years in the US Congress, and start doing what the rest of us have to do, every day – live within our means.

 

Idling In Net Neutrality

Megan Epler Wood, board member of the Keep BT Local Co-Op, has taken the broad leap of faith required to justify public expense to keep the Internet “neutral”.  In other words, she wants to re-animate the corpse of Burlington Telecom, in the form of yet another mixed-revenue enterprise that will, through the magic of good intentions, not only give everyone access to critical

Yep, let's try this one more time!  What's the worst that could happen?

Yep, let’s try this one more time! What’s the worst that could happen?

free speech platforms like Facebook, but will ensure both access and something very vaguely stated as “neutrality”.

“Neutral” means nothing of the sort.  It means subsidization, it means regulation, it means oversight, it means political capital earned and spent on propagating a “neutrality” that will do nothing but protect the interests of those who are able to get politicians to care about them.  Which is a difficult enough task, since most politicians seem only to care about themselves and re-election.  It’s always refreshing to hear Vermont’s best-known senior, and senior Senator, Patrick Leahy, crafting new “rights” out of the whole cloth of the Bill of Rights, but he’s off to the races:

Over 1 million concerned citizens wrote the FCC to demand equal access to the Internet over a 5 month period ending this July. In Burlington, Senator Patrick Leahy held a public field hearing on July 1 for the U.S. Senate Judiciary Committee to explore the importance of preserving a neutral Internet environment to protect our local businesses, civil society and local services. Senator Leahy stated at this hearing that “open-Internet principles correspond to the U.S. Bill of Rights.” “

Leahy’s claim is helping to serve local re-distributionists, again, since by claiming that Interrnet access is a right, then there must be public funds made available for it.  The Keep VT Local Co-Op is a group that’s looking to acquire the remnants of Burlington Telecom, because they, and only they, can keep an Internet local.  Let me just pause here as the top of my head is lifted off in an explosion of astonishment.  The whole premise of the Internet is that it is not local.  It is global.  Are they planning to cut Ethernet cables at the Chittenden County line?

But let’s let lunacy explain itself here:

Local ownership is a viable means to protect Net Neutrality according to many leading experts. Municipal fiber networks not only foster competition with the ISPs, they create citizen empowerment. According to Christopher Mitchell director of Community Broadband Networks at the Institute for Local Self Reliance municipal fiber networks “ensure open access to the Internet regardless of what tolls the big cable companies charge.”

Neutrality is a cover phrase for nationalizing (or, in BT’s case, localizing) the internet, because, apparently, a profit motive runs against how Leahy, et al, interpret the Bill of Rights.  Since we all know how well government of any size manages projects large and small – because they are mercifully free of the bounds of costs and revenues, as long as tax dollars keep flowing in one form or another – we can just simply rest assured that not only will our Internet become Switzerland, in terms of its undying neutrality, access will be granted by our patriarchy and costs for this blessed benefit will somehow magically evaporate, and people will pay less for it.

I hate to break it to the Co-Op, but that’s been tried.  Right here in Burlington.  And what was the result?  Disaster.  Even with all the breaks possible, including placement of BT’s routers in city buildings to reduce footprint costs, and with a $17 million taking from the taxpayer slush fund, er, “cash pool”, BT crashed like a plane without wings.

Worse, not only does the Co-Op have the wrong idea about how markets work (if they have any idea at all about markets), but they are re-writing BT’s history along the way.

We must not forget that BT’s funding came from a vote of the citizens. We have invested $17 million already, and one of the only viable options to retain local ownership, which is not concentrated in the hands of the private sector, is by supporting a Co-op solution. It is highly unlikely the city can retain ownership according to all reliable sources.

We must also not forget that BT’s funding did NOT come from a vote from the citizens.  It came from the city’s “plan” to have a profitable enterprise in place, not one that had public funding to fall back on.  There was no” investment” of $17 million.  This is such a bald-faced claim that runs contrary to reality I’m wondering if Wood is unaware of the facts of simply misrepresenting them in order to further a cause.  Oh, and the $33 million in an equipment lease/purchase from Citibank was kind of a big deal, too.

The $17 million wasn’t exactly stolen from taxpayers, but it was taken without their knowledge and approval, and thrown at BT behind the scenes to keep the failing enterprise afloat a while longer.  This is not an investment.  It’s a taking, one that was purposefully hidden.  Worse, it’s a taking for something that Burlington did not need.  Internet access was and still is available to all Burlingtonians at the same or better pricing than what BT offered, as has been repeatedly demonstrated.

As it turns out, the only people who believe in  the free lunch are the people who aren’t paying for the food.  So look forward, Vermont, to more publicly-funded debacles that you will pay for in one way or another.  You will be paying for them in your taxes, in additional fees, or when another “investment” is required, and the funds you have already paid to the city in the form of taxes will need to be replenished with yet another taking.

Oh, and it seems that some minor details – like how many subscribers are needed to keep the thing afloat, which was the original selling, and failing point, for BT – is not something the Keep

Math.  It's still hard, even if you're stuck in neutral.

Math. It’s still hard, even if you’re stuck in neutral.

BT Local FAQ seems to consider.  Or it’s omitting that small detail for a reason, because they don’t know.  They don’t know how many customers they will need because the price they will charge per customer will vary until they can cover costs, the same problem BT had, and the same problem every other provider of a service or product in the world has to address, every day.

But hey, it’s neutral, so don’t sweat the details.

 

And one last line of incredulity-generating nonsense from Ms. Wood:

Little did we know that BT would become a vital safety valve in the fight to ensure Free Speech for our people, and there can be nothing more important than preserving our citizens’ access to a level playing field in business and politics.

Little did Burlingtonians know that BT would become a money pit that they were forced to throw their own hard-earned dollars into for the public aggrandizement of self-loving politicians and the unworkable and socialist ideals they love to curl up with.  It’s unclear how a valve analogy applies here, unless it’s more of a spigot that’s attached to the wallets of taxpayers.  There is no restriction on free speech if you don’t have access to a megaphone, either, but that’s the analogy being made.  Your taxpayer-funded free speech megaphones should be arriving in the mail shortly.

Oh, and if anyone wants access to the Internet, go to your local library.  After all, you’re already paying for it.  Better yet, go to City Hall on Church St. and ask to use one of their computers, since your free speech rights are obviously being curtailed, and you’re paying for everything in that building, too.

 

The Shumlin Economy: A 10.8% Increase In Unemployment

Since Peter Shumlin, former governor of Vermont (well, he seems to be a former governor, since he’s not spent so much time governing in the last year), seems to have lost his touch in touting the state’s low unemployment numbers.  Why?  Because they’re lousy, if you crack open the numbers a bit.  Now, as Vermont’s unemployment rate spikes 10.8% higher in August (jumping from 3.7% to 4.1%), you won’t see Peter touting Vermont’s low unemployment numbers, as he has so heartily done in the past.

But the spike in unemployment is just the beginning of the worse news.  The number of unemployed went up (by 1,300), to the highest level of unemployed in 2014.  The labor force participation rate shrank, again, month over month, by 800, which helped the unemployment rate calculation be less bad.  Irony is rarely unseen in labor data, obviously.

The trends have been consistent – the labor force participation rate is much lower than the national average, but it has been fairly steady in 2014 at close to 351,000 (2014 average is 350,844).  But when the number of unemployed goes up, even relatively little, the impact on the rate is large.

In April 2014, the unemployed number was 11,500.  The unemployment rate was 3.28%.  But just 4 months later, there are 14,400 unemployed, with virtually the same number in the labor force participation rate, and the unemployment number jumps to 4.11%.  That’s an almost 33% jump in the unemployment rate in just four months.  And yes, it’s seasonally adjusted data, so the smoothing has already been applied.  If you can call that bump smooth.

Peter Shumlin Says:  Just In Time For The Holidaze!

Peter Shumlin Says: Just In Time For The Holidaze!

Even though Peter’s probably possibly primed to pump a penultimate, um, fist in victory this fall in the gubernatorial election, I would think his electoral opponents would want to bring a lot of flashlights with them during debates.  Why flashlights?  To shine some bright light on the truth of Vermont’s economy.  Peter rushes in as fast as his non-gubernatorial duties allow him to when there’s something that can even be remotely touted as good news.  So let’s help Peter own his legacy here, and point to the stats he loves to tout – but point to them when they lay bare the truth of Vermont’s struggling, if not dying economy.

 

Notice that Peter is rarely found in front of businesses that are laying people off.

 

Corporate Patriotism: Bernie-Style!

Bernie Sanders, fresh from never drawing a paycheck other than from coffers filled with taxpayer dollars,  now describes corporations as “deserters” for using existing law and the existing tax code to reduce their aggregate tax burden.  In other words, Bernie wants to squash inversions.

But let’s ask Big Boy Bernie a question:  Who writes the laws?  Congress.  Who has established the highest corporate income

The only "worker" Bernie approves of cheers for the hammer and sickle.

The only “worker” Bernie approves of cheers for the hammer and sickle.

tax rate in the OECD?  Congress.  Who wants to make sure that corporations face a higher corporate tax burden than any other place on the planet, and then scratch their heads and wonder why corporations a) aren’t hiring, and b) look to use existing tax law to avoid paying more than they have to?

Congress.  Congress in the form of, specifically, Bernie Sanders, avowed socialist and re-distributor of other peoples’ earnings.

Let’s let Bernie speak for himself, though:

“I have a message for these corporate deserters: You can’t be an American company only when you want corporate welfare from American taxpayers or you want lucrative contracts from the federal government. If you want the advantages of being an American company then you can’t run away from America to avoid paying taxes.”

First, I have a message for Bernie:  Your august body, the Senate, approves corporate “welfare”, in whatever form it takes.  If  you don’t want corporations seeking breaks from the people who write the laws, stop writing laws that do exactly that.  Stop sending former Congressmen to work for lobbying firms.  Oh, and Bernie has no problem signing bills that subsidize, corporate-welfare-style, certain industries that are prevalent in Vermont.  So that form of welfare is OK, but others are not?  And do we need Senators creating and approving 5-year plans like a Politboro hack from the 1980’s?

Secondly, the “advantages” of being an American company include the highest tax rate in the OECD.  How is that advantageous to US corporations, exactly, especially when self-congratulating politicians like Sanders villify the companies that actually produce something, and create jobs to produce those goods or services?  A higher tax rate means reduced net income.  Reduced income means slower corporate growth, reduced product development, less hiring – in other words, the taxes that Bernie thinks belongs to him actually represent jobs and growth taken away from the American worker.

And corporations are the ones being unpatriotic?  Bernie wants to make it harder to find a job.  In a recession.  He’s criticizing corporations for responding to the incentives the US government, in its laws and tax code (one of the largest and most complex codes in the OECD) has created.

In other words, if someone sets your house on fire, you get out.  What you don’t normally see is the person who set the match to your house asking the fleeing occupants why they’re leaving their privileged home.  In fact, Bernie’s going to take it one step further, and make sure they are forced to re-enter the burning building.

This is how Bernie gets fish put on his table, too.

This is how Bernie gets fish put on his table, too.

One last thing:

“At least a dozen other major companies are considering abandoning America through a loophole in the tax code known as corporate inversion.  Such inversions allow U.S. companies to move their corporate headquarters overseas by merging with a foreign company in a low-tax country, even though most of their profits and sales occur in America.”

It’s not a loophole; it’s the law.  Kind of like Obamacare.  It’s not a loophole, Bernie, it’s law – the laws that the Senate makes.  Change the US tax code so the rate is on par with other OECD countries – hell, peg it to an average of all of them and you’ll shave off 10 percentage points – and you’ll see the inversion rate drop.  You’ll see unemployment go down.  You’ll see home-buying increase.  Etc.

You will see all those things, results that don’t require Congressional interventions, other than getting the hell out of the way.  Which is why you’ll never, ever, see a career carpetbagger like Bernie Sanders champion or vote for a corporate tax reduction.

Even if it costs Americans jobs.

 

 

The Volatility of Death

The Shumlin administration, months after touting what a great place Vermont is for jobs, has announced that due to declining tax revenues the state is looking at reducing FY15 budgets in all areas by 4%:

  Gov. Peter Shumlin ordered all agencies to draft a plan to trim 4 percent from their just-approved budgets.

I'm shocked, SHOCKED, to learn that the FY15 budget revenues are off.  I'm also shocked to learn that Spock's ears are fake.

I’m shocked, SHOCKED, to learn that the FY15 budget revenues are off. I’m also shocked to learn that Spock’s ears are fake.

  Final spending reductions are expected to total about 2 percent, with some areas of the budget held harmless from cuts.

  On July 24, top economists briefed Shumlin and members of the Emergency Board about a range of indicators leading   them to expect about $31 million less in state tax revenue over the coming year.

  The pace of recovery is not as robust as they had thought at the start of the year.

  On Thursday, the administration released July tax revenues that came in about 1.77 percent under budget.

As Jim Reardon, the state budget director said:

  “It’s always a difficult process,” state budget director Jim Reardon said Friday. “But the fortunate thing is we’re at beginning of the fiscal year so it’s much more feasible to make adjustments.”

Yes, it’s great that it’s in the first month of the new fiscal year – but it also means that the revenue trends that were evident in the FY14 budget, and that his office has years of data on, were not incorporated into the FY15 budget.  Missing your first month’s budget number is not something to celebrate.  It means you missed something entirely, or your assumptions about revenues are problematic.

And why the big miss, from a year over year perspective?  Not enough rich Vermonters are dying fast enough:

General Fund revenues totaled $101.00 million for July 2014, -$1.82 million or -1.77% below the monthly and cumulative budget forecast targets.  Total GF revenues for the month for were -$2.46 million or -2.38% behind the actual results for the prior fiscal year (FY2014), primarily as a result of the volatile Estate Tax finishing the month at $8.77 million less than last year.

The state is cutting services because it can't forecast inheritance tax revenues - because you can't accurately forecast inheritance tax revenues.

The state is cutting services because it can’t forecast inheritance tax revenues – because you can’t accurately forecast inheritance tax revenues.

In other words, last year’s budget bacon was saved by somebody dying, and since Vermont sees fit to levy an estate tax (remember that this tax is on what was left over after your assets and income were taxed when they were earned, in other words, it’s double taxation), there are times and places where the budget holes are not going to be filled.  The state seems to eagerly await the filling of other holes, notably gravesites, so the annual budgets remain unimperiled.

What’s interesting is that even the state’s small budget estimate for revenues in this category is off by almost 100%.  It means that the state’s annual budget, and the jobs of those people who work for the state, is significantly impacted by a tiny, infinitely small percentage of the state’s population.  To put this in perspective, what would the budget cuts look like if a couple of the other revenue categories were off to the same

A budget rescued by bacon.

A budget rescued by bacon.

degree as the Inheritance & Estate revenues are?

Then the budget might be in full-on meltdown just as the fiscal year starts.  Oh, and to keep this in perspective, Shumlin wants to increase spending for single-payer by $2.2 billion.  Based on the recent budget performances, a lot of Vermonters are going to have to die to cover that new expense – I hope they’re up for it.

 

 

 

“Clean” Energy Jobs And The Taxpayers That Pay For Them

The Vermont Department of Public Service (the same entity that served the public by helping to hasten the decommissioning of Vermont Yankee, which means Vermonters will be subject to spot-market pricing for power and increased electricity rates – conveniently timed for after the next gubernatorial election) recently published a study that forecasts 1,800 new jobs in the “clean” energy industry for 2014.  The job forecast is based on a poll commissioned by the DPS.

Two things:

1.  “Clean” energy jobs (as if there is such a thing; every erg of energy created has some kind of cost in terms of its generation, either the burning of fuel, the build of solar panels with its well-known collateral environmental impacts, or habitat impacts of hydro generation, etc) are largely funded by taxes, in the form of grants, subsidies, or contracts issued by local, state, or federal agencies.  These jobs are not spontaneously born in the marketplace.  For the most part, those jobs are created because there is tax money available for revenues.  Ask any company that builds wind turbines or solar panels where their dollars are coming from.

If only personal incomes were so easily renewed.

In other words, those jobs would not exist without tax money.  At best, it’s an economic wash – a transfer payment, not an indicator of economic growth.  It’s just a re-allocation of capital, funded by taxes and borrowing.

2.  The “clean” energy industry is much more mature in other countries where these energy policies have taken root much earlier than here in the states.  So what are some of the longer-term results of those efforts in other countries?

A few examples:

German Wind Turbine Investors Dissolve Operating Company After 13 Years Of Poor Returns, Technical Failures

“The first report, which came from a commission of experts that had been appointed by the German parliament to study the country’s energy laws, recommended Chancellor Angela Merkel’s government on Wednesday to abolish all subsidies for green energy which cost the state some €20 billion per year.

It concluded that the current system, in which green power producers are paid guaranteed, above market prices to put electricity on the grid, is financially unsound and not producing a measurable effect on innovation. “For both these reasons, there is no justification for a continuation of the [policy],” it said.”

Germany’s Energiewende bodes ill for the country’s European leadership

“The result is a web of grotesque distortions. On sunny days Germany pushes its excess power into the European grid at a loss. Because producers of renewables are paid a fixed price, their subsidy rises as the spot price of electricity falls. On cloudy days Germany relies ever more on brown coal. Last year its CO2 emissions rose.”

French body blames renewables for EU power market failures

“Europe’s electricity system is not living up to its promises, according to a French advisory body to the prime minister, which published a report on Tuesday (28 January) largely blaming renewable energy subsidies for this failure.”

“Whether on low-carbon growth or boosting competitiveness with lower prices – none of the benefits of a common EU electric policy have materialised, the report says.”

Given the examples set by other countries who adopted a “clean energy or die” policy, rushing headlong into the subsidy industry, er, “clean” energy industry,

Well, that right there is your problem.

Well, that right there is your problem.

might Vermont want to take a look at those efforts before committing to having “90 percent of our energy from renewable sources by 2050″, as Christopher Recchia, the commissioner for the DPS, states?  (Hell, why not 100%?  No one likes a quitter, Chris – you’re either in or you’re out.)

But the DPS report’s research methodologies were sampling, in large part, the industries that are direct recipients of some kind of subsidized dollar of one kind or another.  The report itself says that its survey population (10,000 phone calls and 1,200 emails, with a response of 1,464) consisted of “a list of businesses that were identified by Renewable Energy Vermont, various state agencies, and other advisory team members (the “known universe”).”

Well.  If you limit your universe to those entities – private, public, and advocacy – that have an enormous self-interest in the propagation of subsidies, do you really expect to get results back from the survey that paint a bleak outlook for “clean” energy jobs in the future?  The responses to these inquiries are all going to be positive, because if you paint a negative picture, the likelihood of additional subsidy funding diminishes.  It is a self-serving survey.  Given the membership of Renewable Energy Vermont, companies that have an interest in promoting renewable energy and seeking more revenues, it’s like conducting a survey about capital punishment by asking death row inmates their opinions on the subject.  You’re probably only going to get one answer.

In terms of the state’s job growth outlook, I’m not sure if the DPS has talked with the Vermont Department of Labor’s employment projections, but I’m having a hard time correlating 1,800 new jobs with both the occupations and the number of new jobs that the Department of Labor projects for 2015.  Granted, these are two different years, but I would assume DPS does not expect 1,800 new jobs in 2014 to disappear in 2015.

The reason Vermont is rushing forward with clean energy mandates while simultaneously wearing a blindfold is because it’s politically useful to do so.  Peter Shumlin has long backed these subsidy regimes, and even with high-profile, epic failures like Solyndra, no planet-sized levels of reality need slow down a political agenda, one that both brings tax revenues (in the form of subsidies) to energy industry companies, and also allows a politician to claim he or she is actually doing something.  Once again, the only thing being done is political advancement on the taxpayer’s dime, and there will be no net benefit to Vermonters.

In fact, if countries like France and Germany are running away from energy subsidies as fast as they can, all of our policies and budgets that are devoted to emulating those failed models should immediately be halted and put up for legislative review.  Sadly, given Vermont’s politics, that’s about as likely an occurrence as a new nuclear power plant licensing.

 

 

 

Peter Shumlin’s Growing Economic Legacy

The Vermont Department of Labor periodically publishes short-term employment projections, to highlight where the employment growth sectors are likely to be in Vermont, and includes an industry breakdown as well.  Since Peter Shumlin likes to tout economic data as evidence that Vermont is a “great” place for jobs, let’s let his words do the talking:

“With the second lowest unemployment rate in the country, we need to make sure people know that we have great jobs in Vermont – and lots of them,” the Governor said at a news conference at the Keurig Green Mountain, Inc. Beverage Technology Center in Waterbury.

Well.  Peter happily ignores the raft of other information at his fingertips regarding Vermont’s employment outlook, because it might demonstrate a certain lack of greatness for Vermonters seeking to work and live here.

What jobs will have the most openings, based on the Dept. of Labor’s statistics?  Rankings are based on the total number of expected openings in 2015:

Peter's Economic Growth Legacy

Peter’s Economic Growth Legacy

Cashiers.  Retail.  Fast food.  Waiters and Waitresses.  The only occupation in the top ten that requires a college degree is #6, Registered Nurses, which means we have population growth in hospitals, not economic growth.  Personal care aides is growing because of Vermont’s demographics, which features not a youthful and vibrant dominant cohort, buying homes and starting families, but rather the largest growth sector is in retirees – a fact that also helps keep our workforce participation rate low, which has the political benefit of making the unemployment rate artificially low.

Shumlin can tour the state and tell reporters that Vermont’s a great place to work, but that’s so unabashedly untrue as to barely pass the laugh test.  Vermont’s native college-educated graduates leave the state at record levels.  Why?  Take a look at the list of projected occupational growth rates in the chart above and you’ll understand why.  Peter understands that too, which is why he never gets into specifics, other than to tout the one or two companies that are doing well, and have a public presence.  But even companies like Keurig/Green Mountain aren’t growing their footprint here, and in fact their next plant will be built in Georgia – the state, not the Vermont town – as that company expands into cold beverages.

As Peter said, “we have great jobs in Vermont – and lots of them”.  Really?  How’s the 11-30 ranking looking?

11-30 on the "great" list.

11-30 on the “great” list.

The reality is that the state’s largest private-sector industry is tourism, followed closely by retail, and neither industry is known for high-paying jobs.  What does not dominate the job scene are manufacturing, technical, financial, or other traditionally higher-paying occupations.    If you leave Chittenden County, the job conditions just get worse.  Compare the income and population growth numbers between Chittenden County and Rutland County, or the fact that Rutland County has 50% more residents over the age of 65 than Chittenden County does (as just one example) and the picture that emerges is not one of a vibrant and growing Vermont economy.  It is quite the opposite, but these numbers are not the things you’ll hear spoken into a microphone when Shumlin is in public.

Oh, and the BEA ranks Vermont 50th for Total Personal Income.  Dead.  Last.  Even with a 33% increase in personal current transfer payments from 2003 to 2013 (which includes “Government payments to individuals includes retirement and disability insurance benefits, medical benefits (mainly Medicare and Medicaid), income maintenance benefits, unemployment insurance compensation, veterans benefits, and Federal education and training assistance.”) .  Which means we have the fewest dollars, nationally, in income.

Peter's fine work on display here.

Peter’s fine work on display here.

In other words, Shumlin’s legacy is of decreasing opportunity, reduced incomes, and demographic and economic trendlines all heading in the wrong direction.  This is what he’s going to hang his hat on when he runs for a vacant US Senate seat.  The more Vermonters realize what Shumlin’s really been responsible for, the more likely their economic opportunity improves – but until that time, we will be on the receiving end of more of the same.

 

The Trifecta of Incompetence

The Progressive Party Operating Manual

The Progressive Party Operating Manual

Swing and a Miss

The Burlington Free Press, despite its historical track record in defending Burlington Telecom, has just acknowledged what most Vermonters (and especially Burlingtonians) already knew:  BT was at best an enormous financial risk at conception, and that taxpayers are the ones left with cleaning up this mess left by the Kiss administration, and particularly the actions of Jonathan Leopold while he was Chief Administrative Officer for the city.

Still, there are those who defend the city’s foray into providing services that were already being provided by the private sector, because, magically, the good intentions of Progressive politics would ensure blowback-free outcomes. To wit:

Laren-Glenn Davitian, representing various public-access media groups, in testimony filed with the PSB raised another possible consequence of Burlington Telecom going private.

Davitian fears, as the Free Press reported, “a corporate owner would be less likely to attend to the needs of nonprofit media outlet than a public owned utility.”

I guess the needs of the for-profit world, and more importantly, the actual consumers of digital media are to go unmentioned here. Instead, we get the paean for “nonprofit media outlet(s)”, which, one assumes, is a critical media requirement for every Burlingtonian to receive.  For anyone who’s watched cable access, I don’t think anything more need be said.  If this is the best argument for defending the misappropriation of taxpayer dollars – regardless of the get out of jail free card issued by a judge – then virtually any spending by any public entity is not only above scrutiny or criticism, but is essentially unassailable.

In other words, under the guise of public interest, you cannot question the emperor’s decisions – period. Until, of course, you discover that the public’s interest isn’t being served when the organization the political class has willed into being is failing massively, and to fix it, you take their earned dollars out of a cash “pool”, and decide that neither the Mayor, the City Council, nor the taxpayer needs to know about it.  After all, it’s not their money anymore, is it?  It’s the city’s.  Oh, and a Certificate of Public Good?  That’s just not germane to making sure the progressive experimenting in telecoms succeeds.  Why do you need to bother with regulations when you can just go around them?

And why is Davitian is concerned about a nonprofit media outlet? If there’s so much concern, go right ahead and build one your own – and if you build it, they will come, if enough Burlingtonians decide they want to pay for it.  That’s how a market works.  It can also be noted that one of the reasons Burlington Telecom has failed is because their pricing structure was no cheaper than private-sector offerings, and in some cases, was more

...and the idea that someone else is responsible for paying for you.

…and the idea that someone else is responsible for paying for you.

expensive that already-available offerings.

But that’s progressivism in a nutshell: Higher costs, worse service, and it’s always publicly-funded – these three outcomes form the inevitable underpinnings of incompetence. Which means that other such efforts, like single-payer health care, should turn out just perfectly. After all, there’s a long-standing track record of progressive success to stand on.  What’s disappointing is that the Free Press has taken years to come to the same conclusion, and only well after the obvious became indisputably true.

 

 

Putting The Health Care Cart Before The Horse Is Even Born

Shumlin's plan in a nutshell

Shumlin’s plan in a nutshell

There’s nothing quite like being late to the party.  Democrats in the legislature are now calling for a “full understanding” of who pays for health care costs.  This is three years after Act 48 was passed, which mandates a transition to single-payer.  Whew.  Just in time.

“Before entertaining any transition to a new health care system, we need to have a full understanding of who pays today, and how well the system is working today.” Lincoln Rep. Mike Fisher, chairman of the House Health Care Committee.

So now, Democrats are finally getting around to learning the funding mechanisms for the industry they voted to completely overhaul, with the goal of removing all the payers in the system and transforming them into one?  This is like like trying to learn how space shuttle engines work 10 minutes before liftoff:  “Well, we’re pretty sure it’ll work – fingers crossed!”.  Out here in the real world, you can’t buy a house or a car if you can’t afford it, which means someone does an analysis of revenues and expenses prior to execution.

The two words missing in Fisher’s statement are “due” and “diligence”, which, much like the federal health care law, were completely and utterly absent in 2011 when Democrats decided they knew better than anybody else how to manage the largest component of state GDP, while simultaneously putting its implementation off to a much more politically convenient date.  Not only have Democrats now admitted they don’t understand the funding mechanism that they voted to completely remake (even though that data is readily available in dozens of different reports, and has been for years – here’s one from 2009), they still don’t have a financing plan for it, a plan that is estimated will exceed the state’s entire annual tax revenue take.  The FY2015 budget estimates $1.438 billion in revenue; the estimated cost for Vermont’s single-payer ranges from $1.8 billion and $2.6 billion.

In fact, the financing plan is so far back in its prototype stages the state of Vermont is only now receiving bids on an RFP to evaluate financing plans for single-payer.  More money spent to see if we can even afford to do the thing which we’re now going to do.

But let’s get back to the legislators’ plans, plans which seem to duplicate existing work that taxpayers have already paid for:

The work that will be done by consultants for the Legislature will in some ways be nearly identical to the analysis being performed by consultants for the Shumlin Administration. They’ll try to determine not just how much individuals and businesses pay in the form of insurance premiums, but also the impact of health care related costs on other household expenses, such as property tax bills.

There are elements of the original analysis done by Dr. Hsaio in 2011 that are not available, which is not an accident, since those elements speak to the funding mechanism (or lack of one) directly.  As others have noted,

Not pictured:  The taxpayers paying for the marbles in the first place.

Not pictured: The taxpayers paying for the marbles in the first place.

the original pitch for single-payer was that it would reduce costs, but now its being conceded that the only reduction likely to occur is a reduction in the rate of cost growth – if even that can be achieved.  Shumlin himself has said “If we can’t get costs under control,” he said, “we’ll pick up our marbles and go home.”, a sentiment that some legislators are now realizing might be the only rational option.

That’s not what was sold to Vermonters in 2011 by our elected representatives.  Nor was it assumed that the legislature and the governor, both of whom have taken oaths to faithfully execute their offices, would send us down into a dark tunnel without at least thinking to buy some flashlights before we all went in. What this really means, though, is that Democrats are searching for political cover to help their re-election chances in the next several years, but more specifically, after Vermont’s single-payer system blooms into its full flower.  Then they will be able to point back to this fine work and claim that they did their job – even if it was three years too late.

 

 

 

 

 

 

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