Obfuscating the Issues

The consensus of the  Chamber of Commerce summit held on Tuesday echoes the same issues raised at our own symposium. Namely, that taxes and onerous regulations are having a negative impact on business.  The only dissenting voice mentioned in the Times Argus coverage of the event was that of Rep. Warren Kitzmiller, D-Montpelier, who simply argued everybody is wrong -- Vermont IS a good place to do business. He supported his position by saying,

"If the only thing you're looking at is profit … that's a very myopic view of life"

This single statement captures everything that's wrong with the arguments being put forth by the crowd that likes things the way they are. The Chamber meeting was about Business not one's view of life. As I've written before we're talking about two different things here. How individuals feel about Vermont speaks very little about how businesses deal with our regulations. The only simple explanation for why the anti-change (dare I say conservative?) voices are intentionally confounding these issues is that they lack a strong argument on the merits.

Comments

[James Ehlers]

He seemingly subscribes to the the philosophy that when you cannot dispute the message, attack the messenger.

I am curious as to how many people the Representative currently employs and in which industry or industries.

[Roger]

Gee, do you think we business owners can show "quality of life" somewhere on the income statement at tax time? Do you think the VT dept. of Taxes will excuse us when we claim "quality of life" as a net loss?

[Nate Freeman]

I'm not sure I agree. From media reports on both the Tiger Symposium and the Chamber event, it sounds like to completely different horses to me. What I appreciated from the Tiger event was some of the in-depth conversation about nuts and bolts finance. The TA report on the Chamber event seems to portray a somewhat sentimental gathering of anti-tax folks, lacking data. What was most surprising to me was how the conversation seemed to be tipping basically on the education tax. Some people may hold their own opinion on why business owners and entrepreneurs choose to live/move to any state in the country, but I don't think there's any data to support these opinions. Sentiment doesn't cut it in the process of business decision-making; likewise, it shouldn't run the show at a Chamber meeting, either.

Respectfully submitted,

Nate Freeman

[Greg Decker]

Nate, I suspect your right about the Chamber meeting being less 'academic' than the Tiger symposium. This of course is expected considering the nature and purpose of the Chamber. We are however all working on the same problem even if we use different language to talk about it.

The challenge for us at the Tiger is to be good doctors and listen to the "sentiments' of Vermont businesses and diagnose the problems.

[Independent Vermonter]

Rep. Kitzmiller's view is the one shared by the Brattleboro Reformer's Editorial Board and many of those on the political left in Vermont. The shorthand summation is "Socially Responsible Business" and it presumes the "multiple bottom lines" that the movement claims must supplant the simple profit/loss measurement of a business' success.

That's why the Reformer can brag about how companies "only interested in profit" will find Vermont "hell," while those who subscribe to the practices advocated by the socially responsible crowd will find Vermont a welcoming place.

It's a self-centered worldview that presumes moral superiority and widespread adherence in Vermont. I think it is the foundation of much of the anti-corporate mentality that permeates the political left in the state, for a simple reason. Corporations, particularly those not headquartered in Vermont, don't have to play by their rules.

If you own or control a corporation in Vermont, you can be bullied into joining Vermont Businesses for Social Responsibility and signing on to the movement, even helping fund it. But if you're headquartered in Bentonville, Arkansas, or Seattle, Washington you don't have to give a rat's fanny what a small group of Vermonters think. They can picket your store or coffee shop, try to block you in the permit process, and demonize you in the media, but you don't have to change your corporate practices or bow at their altar of multiple bottom lines. If you just stick to your core business of providing a good product or service, people who aren't part of the movement will just walk by the protesters and buy their kitty litter or coffee. They'll even stand up for you at public meetings and in letters to the editor.

Therein lies the problem. Target may want to sell to the Vermont market, but they don't need to. In fact, Vermont doesn't produce many of the goods/services that people would consider necessities for modern living. But the Socially Responsible Business crowd would like everyone to believe that if we keep out the large corporations, Vermont businesses will fill the need.

Vermont is a tiny economy that is far more dependendent on the larger national economy than it is on us. The idea that we can get by without importing energy, fuel, and consumer goods is laughable. And likewise, so is the notion that Vermont can eat all the cheese Cabot produces or ice cream Ben & Jerry make. We need to trade.

Likewise, the goods we produce have to compete against those produced elsewhere. And that means we can't export our "Socially Responsible" values and the premium price that goes with them, at least not everywhere. Some people simply aren't willing to pay more.

Sorry, Brattleboro Reformer. It's a tough world, but making Vermont "hell" for those businesses who are trying to compete in the global marketplace is a recipe to turn the entire state into one giant Manchester: an Outlet Mall and Playground for the Wealthy. The problem is most of those enjoying the amenities won't be Vermonters.

[Anonymous]

I have a company for you Independent Vermonter: Green Mountain Coffee Roasters. It has socially responsible values at the core of its business strategy and has prospered in Vermont. In fact GMCR made the Forbes 200 list (note that no NH based companies made that list) and GMCR has been a top performing NASDAQ stock for many years. Now, In terms of Bentonville not listening to Vermont business people you might want to take a look at this http://blog.fastcompany.com/archives/2007/08/22/cover_story_outtake_seventh_generations_jeffrey_hollender_dishes_on_walmart_sustainability.html
Hollender flies down to Bentonville every couple of months. Like it or not, large corporations have already embraced sustainable business practices, and many look towards Vermont companies as models. Go figure.

[Ye Old Vermonter]

Great post Mr. Anonymous! The real problem here is that most of the posters on this site know all the answers thus they do not have to rely on reality to explain their positions. They can just keep digging their heads deeper into the sand and inhaling all those little granules. Now the good news is many of them are leaving the state soon. Maybe we should start a moving company??

[GreggB]

A moving company might be good. Of course the drivers you hire might not return once they've seen somewhere else. And you need to be careful with the bottom line, I've heard the state takes a mighty fee for large trucks(dump trucks at least, don't know about other large trucks.) My suggestion would be- Self storage units. Seems to me wherever the economy sucks there are a plethora of self storage units. I guess it goes along with a low paid population that has a hard time providing itself stable housing. Let me know if you go that route because I haven't decided whether or not I'll need my chainsaw/woodsplitter/snowthrower
/tractor/gardentiller etc. in Newton, MA. Funny nobody ever seems to factor the required power equipment into the cost of owning a house in VT. Don't weep for me, I'll be back on weekends to catch your fish and shoot your deer. Ride ATV's and snowmobiles. All the things I have neither the time nor money for while living here.

[Jack Harding]

Dear Anonymous,

You make a very good point with regards to Green Mountain Coffee Roasters. It is a company that has built value by utilizing the Vermont brand. Someone in a previous post (I apologize for not recalling who) had also stressed that Vermont's brand is valuable and it is helpful to sell coffee and Teddy Bears effectively using it.

However, you may be missing the larger point. No one is saying at Vermont Tiger, from what I have read or heard, that social responsibility, particularly around the environment, is a bad thing. In fact the opposite is true and not merely because it "feels good" or is the "right thing". While that is also true the reason it is important for business to be socially responsible for the environment is because it is good business.

About a decade ago Harvard Professor Michael Porter, arguably the greatest business strategist of this generation, first proferred this notion:

"Professor Porter has also worked on the relationship between competitiveness and the natural environment. His Scientific American essay 'America's Green Strategy', which showed that competitiveness and environmental improvement could be complementary, triggered a body of literature and new policy thinking, including 'Toward a New Conception of the Environment-Competitiveness Relationship' (1995) and 'National Environmental Performance Measurement and Determinants' (2002)."

I have also discussed the point with him personally.

Without minimizing his work, his thesis is that pollution equals waste, waste is bad for business.

You will find that Vermont Tiger consisitently seeks CLEAN and, therefore, socially responsible growth.

The energy around Warren Kitzmiller's comment is that he argues for the same responsibility at the EXPENSE of profits while contemporary economic theory argues for the same responsibility because it GENERATES profits. We agree on the goal: minimize pollution. We disagree that this must be at the expense of profitability and, further, that this is OK. It's not because it is the consumer and employee that will suffer equally with the business owner.

Those against growth and for more entitlements will continue to make the agrument that less profitability is acceptable because it is equivalent to sayng more taxation is acceptable. It's just that it is easier to make the case under the environmental banner as oposed to saying the state will simply take more of what we earn.

Don't be misled. Vermont Tiger is for the environment. It belives sound environmental practices create profits and that less profits are bad for the state and, more importantly, its citizens.

Ask Mr. Kitzmiller what he believes.

[Greg Decker]

Porter's theory is a good explanation for why the environment appears cleaner today than in the past. For example the Cuyahoga River, or any other US river for that matter, hasn't caught on fire since 1969 despite the real GDP's rise (in year 2000 dollars) from $3,765B to $11,319B between 1969 to 2006. This is evidence that as the economy matures and technologies evolve we learn how to capture more of the waste and turn it into profits. Like most other US rivers, the Cuyahoga river is cleaner today even though the scale of the economy is vastly greater.

This is a perfect example of what I mean by saying true environmentalist have a discount rate of zero. If we hadn't invested in the future and experienced this level of growth the Cuyahoga River would probably still be burning.

[Anonymous]

Hold on a minute Jack. You translate Kitzmiller's sound bite "If the only thing you're looking at is profit … that's a very myopic view of life" to mean that he does not understand modern economic theory where pollution equals waste and waste is bad for business? Perhaps he was thinking as small business owners do, that some years you get by with a bit less profit in order to give your long time employees a bit more money in their Christmas bonus, or you sell a few skis and bikes at cost to the local youth group because it is the right thing to do. Kitzmiller is a good guy and you jumped on his comment, as you tigers do in your usual sarcastic and simplistic way because it fits with your view that Vermont legislators are moronic socialists. Look Kitzmiller didn't run a small retail business for 25 plus years without understanding what profit is and how important it is. But see you guys didn't even know what he did for a living before being a legislator you just think he must be a coupon clipping trust fund baby. You just took the sound bite and jumped to conclusions. Shame on you.

[James Ehlers]

Dear Anonymous,
You seem to know quite a bit about Representative Kitzmiller. How many people does he currently employ? How much personal capital does he currently have invested in Vermont enterprise? What percentage of his net worth does this comprise? Answers to these questions will help me determine how seriously I should consider his counsel.

Thank you.

Sincerely,
James Ehlers

[Anonymous]

James: I know quite a bit about you too but I would not presume to answer those kind of personal questions on your behalf in a public forum.

[James Ehlers]

Dear Anonymous,
Silliness. Thank you for the deference, but I will happily answer for myself in this public forum given you cannot. I am currently involved in businesses that collectively employ nine people. I currently only have a few hundred thousand invested here, and at one time was entirely invested in Vermont. No longer.

Vermont legislators have made it definitively clear through their policies that people like me are not wanted here. Vermont policies have been crafted to prevent growth, intentionally and successfully. That's fine. We invest elsewhere. While government is effective at taxing, it so far has proven unsuccessful in forcing the creative to create. When you, Anonymous, discover how to do this, then your philosophy of government may flourish. I believe, however, if you examine the history of Eastern Europe closely enough, you will reconsider.

Politicians know they need money to redistribute to the allies who will re-elect them so they select certain sectors to favor, both on economic matters and social matters. This is the game. We now have the "Green Economy". Okay, but let us understand there is nothing about the "Green Economy" that will actually keep Vermont "green". They are office jobs, not exactly symbiotic with a "working landscape," unless one’s notion of a working landscape is one constituted by office malls. The "Green Economy" is in vogue due to the amount of federal money and grant money behind it. Okay. It is what it is. It is folly, however, to think Vermont can remain rural while at the same time making Vermonters more dependent on a government-directed economy. It has worked in no other place in the world, and where it does exist, it is completely dysfunctional, contributing to poverty, corruption and civil unrest. Yet, we continue to look to politicians to create our personal wealth.

While government certainly can be an excellent vehicle in serving the most vulnerable among us, it simply does not move fast enough and with enough focus to be a viable conduit for enterprise. Poverty is much more static than wealth for reasons we can discuss later if you like. And contrary to the rhetoric seeking control and power, wealth does not create poverty. If it did why would those preaching such rhetoric seek to control it. Poverty, conversely, does not create wealth. It stands to reason then, government would be interested in seeing its citizens prosper if the government were interested in serving its citizens, rather than controlling them. Given the issue we are discussing is who is more qualified to create wealth, who distributes it is another matter, it is a folly to look to those who even with their favors, bribes and tricks, in the end, cannot get the job done.

Government is an excellent vehicle for exacting control, and, in the case of Vermont, has succeeded so fabulously that now the government relies on favor, bribes and tricks, by the admission of their own officials, to stimulate innovation, unsuccessfully I might add. And the innovators are clearly demonstrating that they are not interested in risking anymore of their personal holdings in a state where high-profile legislators seriously advocate shutting down one-third of the state's power supply, among other inanities. That is not commerce.

Coercion simply does not work with the creative class. No new net private sector job growth of consequence since 2000

I can explain why, and you are certainly free to not listen. You have much company. We are only reaping what we have sown. Shall we repeat the same behaviors again and again and expect different results? I trust, eventually, Vermont will grow tired of being the servant class to the tourist on holiday, and only then will real change come.

How many jobs have you created in Vermont, by the way, Anonymous? And why do you remain anonymous? Are you embarrassed by your beliefs? Or are you concerned your government is monitoring you? ; ) A real concern, perhaps, given that what government can do for us, it may also do to us.

Sincerely,
James Ehlers