Vermont Tiger

Betting on Inflation

In an op-ed in  the Burlington Free Press (which originally appeared in VermontTiger) State Rep Jason Lorber argues that the state should bond to pay for infrastructure projects.   That is a good way to fund projects that have a long life span, but Lorber's reasoning makes me queasy.  He bases his view on the stimulus package now winding through Congress, which he thinks

will likely yield not only new and vital jobs, but also significant and potentially massive inflation.

Then the state can

pay back the bonds when their value has declined, due to high inflation. This strategy is essentially what House Speaker Shap Smith proposed on Jan. 7.

So the state should borrow heavily and bet on high inflation.  There are two problems.  One is that the Federal Reserve is highly unlikely to let the inflation genie back out of the bag.  It was too hard to reduce the inflation of the 1970s.  Paul Volcker, the Fed's chairman at the time, had to put the economy through the wringer in 1980-82 to accomplish that and no Fed chairman wants to go down in history as the person who undid what Volcker accomplished.

Second, didn't we get into the current mess by allowing people to borrow money that they couldn't afford to pay back?  And the assumption was that as long as housing prices kept rising, people would be able to sell their houses to pay off a debt they could no longer afford.  That's not much different than Rep. Lorber's argument.

If the state is going to bond to pay for infrastructure, it should borrow money with the expectation that it will have to be paid back with  real dollars, not with cheap dollars. 

Super Bowl

For some reason, it isn't a national holiday ... yet.  Enjoy the game.  And we'll see you on Monday.

Building Dark Futures

What is regrettably happening with Vermont's Building Bright Futures program is another argument for a tax cut and real incentives for businesses to grow in this state.  Tax revenues cannot be generated out of good will – they can only be generated by businesses.  Businesses that pay salaries to employees who pay taxes on their income, who pay taxes on the homes they buy with their incomes, who pay taxes on other consumables they buy with their incomes.  Businesses aren’t evil, vampire-esque beings – a business’s profitability ensures that employees can afford to keep a roof over their head and live their lives, and provide tax revenues to the state to provide those critical services so much of our population desperately needs.

The myriad barriers to business growth in the state, due to an enormously burdened, lengthy, and agenda-driven permitting process, have really driven the stake into the heart of this Vermont Business Vampire.  Our “heroes” in this story are legislators and other entities in the state who think that business growth and innovation are anathema to Vermont, or some evil creature in dire need of slaying. Unlike the movies, however, this Vermont Business Vampire does not resurrect – except perhaps in another state.  No matter.  The evil profitable business has been slain by our trusty legislative heroes, and they will be free to celebrate their victory amidst a sea of red ink in Montpelier

Small Things; Large Possibilities

The potential applications that may (or may not) follow from research in nanotechnologies are just about limitless.  As this example suggests.  The old, bigger-is-better, approach may even give way to a small-is-sublime way of thinking.

Or, again, maybe not. 

But it seems prudent that those of us who live in small states ought to learn what we can about the new world of tiny (which, by the way, is the symbol for the stock of a venture firm that invests in small technologies).   And the best way to find out what is going on the world of nano would be to attend the Vermont Tiger symposium on Monday.  One of our three speakers will be Dr. Alain Kaloyeros, who is head of the nano project in Albany which has become, in just a few years, the red-hot center of the universe of small. 

Please come.

(Another interesting nano link.  The web is alive with things like this.)

Emerson Lynn on Politics

Using Stimulus To Avoid Cuts Is A
Deceitful Message

State Senate leaders Wednesday returned to Vermont from a visit to Washington, D.C. with the message that we need not be in panic mode, that the stimulus package steaming our way is so large we will not need to cut this year’s budget, and that next year’s cuts are a fraction of what was expected.

The news was delivered with all the satisfaction of the condemned being spared an ugly fate. Senate Pro Tempore Peter Shumlin allowed as how this will negate the governor’s painful call for the elimination of over 600 state jobs. One by one, those programs targeted for cuts began to have a little life pumped back into their veins.

Life is good again.

And this message could not be more wrong, or its messengers more deceitful. The stimulus package, while immensely important, does not spare us the hard work ahead and if we ignore the facts we will emerge from this recession in a weaker, not stronger position.

Unsavory

The Burlington Free Press editorializes that maybe, just maybe, putting a casino at one of the state's ski areas might not be a bad idea.  Then they criticize Governor Douglas

who said a casino would "change the nature of the state," and raised concerns about unsavory characters associated with such operations.

They pooh-pooh this concern with an analogy:

If association with unsavory characters were grounds for banning an activity, we would have to outlaw Wall Street.

Not to mention outlawing the occupation of this man.

Stimulating Skepticism

Megan McArdle asks some pertinent questions about the legislative behemoth known as the "stimulus bill."

Ms. McArdle thinks and writes so ably on these matters that she is rumored to be in the running to fill a spot on the Times op-ed page that has been opened up by the departure of Bill Kristol.  We are ambivalent.  She deserves, plainly, the most prominent podium and widest possible audience.  But her nimble internet presence would be lost if she goes to work for the stodgy old Gray Lady. 

Still ... however that works out for her, you can listen to Ms. McArdle in person at Monday's Vermont Tiger symposium.  Look around this page for more information.

Headline?

The Freeps sees "... School Scores Tick Up in Reading, Math, Writing."  Anyone bothering to read down into the body of the story will learn that:

Among high school students, the percentage of students reading at or above standard increased to 72 percent, up from 67 percent in 2007. In writing, the proficiency level rose to 43 percent from 39 percent. Math achievement — while still low — increased to 35 percent proficient or better, up five points from 2007.

So, 28 percent of Vermont's high school students don't read at grade level.  Fifty-seven percent can't write good.  And 65 percent wouldn't be able to make sense of this paragraph even if someone read it to them. 

The reaction of our educrats?  Predictable.

"... education officials celebrated what they saw as gains."

And when they had finished celebrating, they no doubt asked for more money.

What's in a Definition?

Reading Geoff's post where the Free Press's Mr. Townsend characterized the writers of this blog as a bunch of "reactionaries" got me to thinking.  About me, first of all.  I don't consider myself a reactionary.  I like progress.  I also like institutions, history, and traditions.  I think they're important.  It also got me to thinking about what political labels are all about in Vermont.  So here's a question, and I invite comments from our readers: 

Define and explain the basic philosophical tenets of the following terms, and give examples of politicians and public figures (Vermonters, but I'll take national names as well) who fit into each category.

Progressive

Liberal (21st century version)

Liberal (19th century version)

Conservative

Libertarian
Radical

Reactionary

Invitation To The Reactionaries' Ball

The executive editor of the Burlington Free Press has a personal blog on the paper's website and he used it recently to hyperventilate about the debate over the state's budgetary problems and whether raising taxes will ameliorate them.  The climax of his argument goes like this:

The perennial GOP slur of all elections has been erased. The governor has embraced a tax because he must, and as a result Vermont business will pay. The times do these crazy things to our senses. The times make us eat our words. The times make even the hardest anti-taxer an old softie. The VermontTiger reactionaries must be stunned.

I've e-mailed the following:

Dr. Mr. Townsend,

Jeb Spaulding, Art Woolf, Daniel Fogel, Mary Powell, and many other "VermontTiger reactionaries," will be gathering this Monday at the Burlington Sheraton where we will be listening to speakers from California's Silicon Valley, the Albany Nanotechnology Center, and the Atlantic Monthly and discussing, among ourselves, strategies for returning Vermont to primitive 19th century economic arrangements.  Please join us as my guest.

Sincerely,

Geoffrey Norman; editor, vermonttiger.com