Emerson Lynn On Coming In Last

(from the St. Alban's Messenger.  Mr. Lynn edits the paper.)

Dead Last

Vermont ranks dead last when it comes to economic competitiveness, according to a first-ever ranking by the American Legislative Exchange Council [ALEC]. Utah is number one, Vermont is number 50.
    That, of course, invites reproach. Independent economic policy analyst Doug Hoffer called the report garbage and even Kevin Dorn, Vermont’s Commerce Secretary, said the report failed to acknowledge the state’s quality of life and the educational level of its workers. The Brattleboro Reformer Wednesday carried an editorial titled: “No Place Like Dead Last”, as if the report is a Christmas collectable, and concluded with the paragraph: “If economic ‘competitiveness’ means slashing taxes on the rich and corporations while slashing public services for everyone else, what you end up with is a government that has no capacity to mitigate inequality and a society that is divided between a wealthy minority at the top and everyone else at the bottom. It is the kind of place that most Americans don’t want to live in.”

Such exaggeration does disservice to the debate that should concern Vermonters. Utah ranks fourth nationally in its rate of growth and is forecast to outpace the rest of the nation for the next several decades. Its growth rate triples ours, and while Vermont’s population is the second oldest, Utah’s is the youngest. In other words, their economic competitiveness apparently is very attractive to the young, the very demographic Vermont is losing. It’s just silly to argue that Vermont’s approach is best and that those on the opposite end of the spectrum are living a life of misery and just don’t know it.
    The ALEC report carries an institutional bias. Its primary focus is the level of taxation levied on a state’s taxpayers. It does not weigh the intangibles of quality of life, or proximity to major metropolitan centers, or a state’s educational levels. The group’s detractors also point to the political complexion of its founders, one being Arthur Laffer, of the Laffer curve fame which celebrated the importance of tax cuts as an impetus to economic growth.
    But the group’s political bent has nothing to do with Vermont’s ranking. This isn’t a group that hates Vermont and thought it important to come up with a rankings system to punish liberal Vermonters. [They probably don’t know where Vermont is on the map.] The group picked 16 variables it believed indicative of a state’s ability to be economically competitive. These variables included the state’s top marginal tax rate, its property tax burden, its average workers’ compensation costs, the progressiveness of its income tax and the number of public employees per 10,000 population. The variables were applied equally to all states.
    The conclusion was clear: If this list of 16 variables includes items that are critical to an individual, or company investigating the best place to do business, then Vermont may be the nation’s most challenging locale. If there are other variables that are more important than these, look for another report.
    But let’s not deny the report’s conclusion. Vermont’s tax burden may not be the nation’s highest, but it’s high and common sense dictates that we don’t use our tax burden as the chief arrow in our quiver of marketing potentials. It’s rather daft to suggest to other states that they would be better off following our economic development model since we have little private sector growth to offer as proof that what we have attracts such growth.
    It should be equally obvious, however, that we do not have a political culture willing to reverse course with the expressed goal of being the next Utah, or Nevada, or Colorado. Each state has its own set of standards, and its own set of circumstances from which to chart its preferred course.
    The problem in Vermont is that we have not articulated that course. As we move from the information age to the conceptual age, we need to determine our advantages and then market them unabashedly to the rest of the world. We need to determine our weaknesses, and figure out how to change them, or neutralize them.
    The conceptual age is one that will be more dependent on right-brain thinking, as outlined by author Daniel Pink in his book, “A Whole New Mind.” This could play to Vermont’s advantage if we are early adapters. The suggestion is that we will continue to shift away from jobs that can be done elsewhere more cheaply, and focus on professions that cannot be done elsewhere. The approach is more entrepreneurial, more art-based and more person-to-person based than the economy we now have.
    To get there, we need to leapfrog over what we have to what will become. That’s largely a function of leadership, attitude and vision. It can be done in Vermont faster than most other places because of our small size, our quality of life and our high level of education. But to work, we must have the leadership, and there must be sufficient scale. This cannot be the purview of one small sliver of the state’s economy. This is why we’ve suggested the creation of a Center for Entrepreneurship that would be quasi-public [a strong assist from the state, without the heavy regulatory hand] that would be housed by the University of Vermont and the state college system.
    The goal is not to emulate Utah, it’s to better Vermont, but we can’t do that standing still, right where we are, with the same policies and the same entrenched attitudes.
                           

                by Emerson Lynn

Comments

[SPS]

Very well said.

For those interested, there has been a heated debate about economic development (amongst us lefties) at Green Mountain Daily (www.greenmountaindaily.com). Look under the diaries Growth: Beyond Ponzi Economics and The Importance of Growth.

[G. Cross]

For the "glass is just about empty" crowd, Emerson's column is music to their ears. For those who wonder, what in the world does "school choice" have to do with rating a state's competitiveness, or are unwilling to accept the ALEX opinion piece as gospel, I suggest you take a look at this other view:

http://www.beaconhill.org/Compete07/Compete2007State.pdf

Merry Christmas and a Happy New Year to all.

[Greg Decker]

George, obviously the two reports represent two different views of what's important. However, only one of the reports reasonably approximates Vermont's actual observed performance.

If you truly believe we're in the top quartile you really need to spend some time traveling outside of Vermont to get a little perspective. And remember, the first step to recovery is admitting you have a problem.

[G. Cross]

The report I linked to rates Vermont 12 in competitiveness in the country not number 50 as ALEC has. It is completed by a group at least as bipartisan as ALEC. Clearly it shows Vermont in a better light than ALEC. Of course if your desire is to promote Vermont by showing how bad we are, you would exclusively use the ALEC report. You can continue to promote one report and claim that it is the absolute truth while keeping your heads in the sand. Or you can study a much broader range of reports to identify Vermont's strengths so we can all use those strengths to build for the future.

Emerson Lynn is on the right track when he suggests: "This is why we’ve suggested the creation of a Center for Entrepreneurship that would be quasi-public [a strong assist from the state, without the heavy regulatory hand] that would be housed by the University of Vermont and the state college system." Certainly such an operation would not focus on one report. It would promote our strengths while working to improve our weaknesses. It would most surely not spend the bulk of its time commenting about how bad things are.