How To Succeed In Vermont

It's Getting Tougher and Tougher
by
Rich Tarrant

Remember when Bernie Sanders made big headlines for himself  by disrupting a board meeting at IBM?  The issue at that time was retirement benefits and, whatever the merits of his argument, his uncontrolled rant has proven disastrous for Vermonters.  Since then, the number of Vermont jobs at the IBM facility in Essex has dropped by 2000 employees.  With no significant new investment, the value of the plant has depreciated by 30%.  This was a severe blow to Essex property tax payers who had to (and will continue to have to) make up the difference.   IBM is growing world-wide and the investment that should have gone into the Essex location has been re-directed to Fishkill, New York.                        

The lesson here is that when legislators attack or undermine tax generating businesses, it is regular working people who suffer through job losses, tax increases, program cuts, or the combination of all three that we are seeing today in Vermont.

The 2008 legislative session has revealed just how openly hostile the Democrat supermajorities in Montpelier are to Vermont’s economic environment, as well as the price we pay for that hostility.  Last week it was State Senate leader Peter Shumlin’s turn to attack IBM, calling that company’s representative, John O’Kane,  a liar for expressing concerns that legislation Shumlin is pushing would lead to higher electricity rates in Vermont.  I have known and worked with John O’Kane for many years and no one could be more honest and straight-forward.

Shumlin’s legislation, by the way, is another attack on another important Vermont employer, Vermont Yankee. This is a business that Shumlin, and others of similar persuasion in Montpelier, want to shut down regardless of the fact that it is our best hope for reducing greenhouse emissions in Vermont.  Apart from employing hundreds of Vermonters, Vermont Yankee produces one third of the state’s power, carbon free, and at our cheapest cost. Vermont Yankee is a critical component to the bottom line of every major employer in the state, and year after year Vermont Democrats are trying every angle they can to destroy it.  Who do you think will be hurt if they are allowed to succeed?

When the Vermont Chamber of Commerce held a Business Summit in December 2007 to outline its needs and concerns in a civil, bi-partisan forum, Speaker of the House Gaye Symington (D-Jericho) all but accused the business community of being a bunch of whiners.  She couldn’t be bothered with their problems.  After the summit, the Chairman of the House Commerce Committee, Warren Kitzmiller (D- Montpelier) actually accused the business leaders of being “myopic” for being concerned with profit.

When entrepreneurs and investors see this kind of behavior, it is a serious red flag telling them to take their money, their jobs and the tax revenue they generate somewhere else.  When they do, Vermont workers, taxpayers, and, tax collectors suffer.

Vermont’s social safety net, which we all value and many rely on, is dependent upon a healthy, private sector business environment generating tax revenue not just for today but for the long term.   We can have the government we want, but only if we are willing to allow our private employers the freedom and opportunity to do the work and make the money to pay for it.

I am confident that the same creative spirit that led to Vermont Teddy Bear, Burton, IDX, etc., can pull us out of this recession stronger than ever.  However, after witnessing what we have from the majority in the in 2007-2008 Legislature, I’m convinced the path to long term economic security is going to have to start with changing the political culture in Montpelier. 

(Rich Tarrant, who ran against Bernie Sanders for a seat in the U.S. Senate, is Vermont's most successful entrepreneur, as Art Woolf pointed out here.   His insights into the nature of Vermont's economic woes deserve, self-evidently, serious consideration by anyone concerned about the state's future.  We are delighted to publish this essay and look forward to hearing more from Tarrant in the future.)

Comments

[Chris Palmetto]

What a shame that Rich couldn't have run a cleaner campaign against Bernie. Rich is cleary a sharp guy with tons of business and policy sense, too bad this didn't come out during his Senate run.

All he did was smear Sanders with baseless alegations. There were plenty of real issues he could have gone after, and we may have all been better off if he took the high road and won.

[doug]

I thought the whole story included a $50 million incentive from Pataki and the intent to create a regional tech center.

Does Tarrant have a grudge against Bernie over FAHC? Is that why he ran against Bernie rather than for a state office where he could change the political culture in Montpelier and start Vermont on the long path of economic recovery?

Blaming Bernie as the sole cause for IBM's decision or for the Essex plant's shrinkage is extremely short sighted. In fact, it displays complete ignorance of the real causes and the ongoing changes in the global landscape.

[Jim Gatti]

Smear Bernie with baseless allegations? Name a few. Bernie may not have been the sole factor in IBM's decision but he is a highly visible symbol of Vermont's political climate. We reelected him to the House 6 times and then to the Senate by substantial majorities. Given his public pronouncements that can't be considered an indicator of a positive business climate.

[GreggB]

Anyone who wants to gauge VT's attitude towards business merely needs to ring up the tax department and ask any simple question about business taxes. Go ahead try it. They are public servants existing just for this purpose. Let us know how it works out.

[Jack Harding]

Mr. Tarrant has nailed the viewpoints of business in Vermont and, more importantly, those "invisible" businesses that never even consider hiring in our state.

IBM is on a short fuse to leave Vermont. Everyone in the semiconductor industry knows it. And while it is true that the sole rantings of Bernie Sanders have not been enough to direct IBM's corporate strategy, they have been tectonic in their role as scale tippers.

I take great comfort believing in the economic equilibrium inherent in capitialism. As Messrs. Sanders and Shumlin chase out our two most important businesses the repercussions will permanently dash their socialist agenda returning Vermont to its roots; work hard, protect your family, respect your neighbor and pay as you go.

In fact, time will render Sanders and Shumlin the poster children of the modern view it is socialism, not captitalism, that will [continue to] sow the seeds of its own destruction.

[G. Cross]

So many experts and so little understanding of the people of Vermont. Sanders, Shumlin and Symington have each stood for election numerous times. Their winning record is astronomical. Many would love to have the same success. Those who challenge the the effectiveness of these three, tend to forget how many times each has been reelected. It is possible that the commentors on this site are much smarter than the majority of voters. However, that thought gives me a greater appreciation of democratic elections. Smart is in the mind of the speaker not necessarily in the mind of the listener.

[Greg Decker]

George, have you heard of the book "The Myth of the Rational Voter: Why Democracies Choose Bad Policies"? Its written by a very smart guy.

http://www.amazon.com/Myth-Rational-Voter-Democracies-Policies/dp/0691129428

[Geoffrey Norman]

Regarding this latest George Cross insight -- ho hum. Richard Nixon was elected in the greatest landslide in the history of American presidential politics. So is Nixon somehow eternally validated? And, would Mr.Cross like to guess which political figure in Vermont has rolled up the greatest number of votes in his political career.

At the Tiger, we don't always agree with Jim Douglas and we suspect that Mr. Cross agrees with him far less than we do.

[Nate Freeman]

I might second the motion to recommend Mr. Tarrant to run for a statewide office if he is interested in continuing his legacy as a leader in Vermont economy.

In fact, I think he might make a reasonable fit for the Governor's office. Mr. Tarrant would be far more effective than Governor Douglas.

How about it, Mr. Tarrant? It's about time for Governor Douglas to face a primary. Republicans I know only appreciate him for opposing the Legislature. But they also recognize that Douglas is devoid of economic accomplishment.

Your thoughts, VT Tiger readers?

[Tom Licata]

Mr. Cross,

You confuse the ability of those to be reelected with success.

Is this your measure of success: Vermont has witnessed 0% private-sector job growth over this past decade; Vermont faces roughly $3.5 billion in costs with no plan to pay for them (the joint fiscal office estimates we need to spend $203 million more per year just to get our roads and bridges up to par and we face a $6 billion shortfall over the next 30 years if our problems are not addressed shortly); Vermont's young people leave our state at four-times the national average and in 20 years our population over 65 doubles while the population of our working-age and youth remain flat to down; Vermont faces a shortfall of 13,000 housing units and this is projected to be greater than 30% of projected need over the next four years. We are the highest or among the highest taxed and regulated states in our nation yet according the latest New England Assessment Test scores, 70% of our high school juniors couldn't compute basic math problems and 61% couldn't write a legible paragraph.

Yes, Senator Sanders, Senator Shumlin and Speaker Symington are good at getting reelected. But, please, don't confuse this fact with success. The secret to their success?

Winston Churchill summed it up best:

"The multitudes remained plunged in ignorance of the simplest economic facts, and their leaders, seeking their votes, did not dare to undeceive them."

[G. Cross]

I would like to second Nate's nomination of Rich Tarrant to run against Jim Douglas in a Republican primary. That would be exciting and would bring needed competition to the Republican Party, both within and without. I would also urge all those regular contributors to this site who wish to save Vermont from itself to jump into the political process and run. Vermont needs a continuing source of bright, dedicated politicans and at this point only the Democratic Party seems to be able to muster a cohort of such candidates. Don't get me wrong, there are bright and dedicated Republicans and Progressives in Vermont politics - just not very many of them. Politics, as the market, thrives on competition. All you free-marketers should welcome this opportunity.

[Rob Roy]

Substitute George Bush for Sanders, Shumlin and Symington, in the following and gaze in wonder at the wisdom of the speaker and his appreciation of democratic elections.

"So many experts and so little understanding of the people of Vermont. Sanders, Shumlin and Symington have each stood for election numerous times. Their winning record is astronomical. Many would love to have the same success. Those who challenge the the effectiveness of these three, tend to forget how many times each has been reelected. It is possible that the commentors on this site are much smarter than the majority of voters. However, that thought gives me a greater appreciation of democratic elections. Smart is in the mind of the speaker not necessarily in the mind of the listener."

[Tom Licata]

Mr. Cross writes: "I would also urge all those regular contributors to this site who wish to save Vermont from itself to jump into the political process and run."

Mr. Cross, you didn't answer my supposition: Does reelection mean success?

For that matter, does Freedom mean Responsibility?

Former Senator and 1972 Democratic presidential candidate George McGovern wrote a beautiful commentary (WSJ 3/7/08) regarding this subject: "Since leaving office I've written about public policy from a new perspective: outside looking in. I've come to realize that protecting freedom of choice in our everyday lives is essential to maintaining a healthy civil society."

And, regarding your suggestion, I will not strive to be elected, but I will strive for success.

[Wayne Carlson]

I obtained an MA in economics and post-grad in accounting via study and an individual plan. The basic definition of economics (paraphrased) is "How an entity decides to allocate scarce resources to satisfy unlimited wants in a time period". Now the key phrases there are:
1. Scarce resources-there is just so much of any one thing at a given time.
2. Allocate-where those resources go.
3. Entity-could be a business, consumer, government, etc.
4. Decides-who decides is key. There is so many economic decisions made every minute of the day a single individual or agency cannot make them efficiently. That is why the old communist central planning committees failed.

Individual behavior has to be regulated as to legality and conformance to public safety concerns. However, the interaction of all those economic decisions should be left to the micro level as much as possible for economic efficiency to be maintained.

[Green Mtn Punter]

Scenario for '10: Rich Tarrant for Gov, Jim Douglas for Senate. If Leahy doesn't go gracefully and retire, then he must be defeated. Tarrant as Gov will attract the very best candidates to run as Republicans an d by '12 they can re-take Montpelier. At that point there may be a chance to change the political culture. A tall order, to be sure, but the historic moment is at hand.

[Dave]

Reply to Green Mtn Punter:
I'm all for Rich Tarrant running for Governor, or even State Legislature, but Jim Douglas is no Legislator - He's an Executive. Leahy certainly needs to be replaced, but I fear Jim Douglas' voice would be lost in Washington.

[Green Mtn Punter]

Reply to Dave: I just think Rich Tarrant is the best man for the job right now. He's VT's Mitt Romney and knows what it takes to create an entrepreneurial business environment. Jim Douglas has been a state legislator, and a fine public servant all around, and I know Jim would make a distinguished U S Senator for VT. I would think he would be thrilled to get out of Montpelier-wouldn't you?!

Recent history and current events are pointing to '08 and'10 as pivotal election cycles when voters must decide: Who is to blame for gasoline at $4 bucks a gallon and it's fallout effects on the entire economy? Is it Republicans who have always been advocates of increasing the oil supply by extracting the domestic supply? Or, is it the Democrats who have done everything possible to block domestic production and new refineries by means of their extreme environmental regulatory agenda? Why is that so hard to understand?

Vermont and all American voters need to wake up and stop being fooled. $4 a gallon gasoline, and all of it's disastrous manifestations, will have a way of painfully driving that point home. Time to declare a national emergency waiving all rules and regs so we can start drilling without further ado. That simple act would get the short sellers going in the futures market and start a downward spiral in oil prices. And if that notorious speculator George Soros is very long on oil futures we could have a 2 for 1 special!

[James Ehlers]

Dear Friends,
Workers' compensation, health insurance costs, instability in utility prices, and land prices and the effect on housing, all of which are directly influenced by government policy, are key factors in the stagnant private sector business growth in this state since 2001. The current legislative majority refuses to acknowledge this input from those of us in the business community. Until they do, not much will change.

Sincerely,
James Ehlers

[James Laughead]

I liked "Rich" Tarrant, he had nice Free Lunches and Dinners, when he campaigned, and it was nice to see return of Billboards!