Entrepreneurs or Entitlements: Part 2

This is a continuation of my coverage of the Vermont Tiger Symposium. You can read part one here.

The afternoon speaker was Amity Shlaes, author of The Forgotten Man. (You can read here bio here. You can also read an interview with her about The Forgotten Man here.)

Her talk was about the election of 1936, which she dubs the most significant election in US history. Ms. Shlaes entered the stage claiming that in order to understand what is going on with elections today, we need to understand 1936.

The title of Ms. Shlaes’ book comes from one of Franklin Roosevelt’s speeches in which he voiced concern for “the forgotten man,” the man at the bottom of the pyramid.

But there was another forgotten man. William Graham Sumner spoke of his own forgotten man.

The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C’s interests, are entirely overlooked. I call C the Forgotten Man.

But President Roosevelt’s forgotten man was D. More specifically, it was all of the different constituent groups that could stand for D.

Ms. Shlaes went on to describe how the New Deal programs were used to reach out to all of the Ds in America and to get them used to Washington helping them with things they used to do for themselves.

There were blatant examples of federal money being used for political purposes, which was not illegal at the time.

Money was poured into projects in the battleground states, including Vermont, which was one of only two states to go against Mr. Roosevelt in the election.

Ms. Shlaes took the majority of her time detailing just how underhandedly federal money was used to secure votes from the various Ds. Then, concluded by saying that this history is important to a state like Vermont where the idea of helping the forgotten man has really taken root. Ms. Shlaes wanted to make the point that the things they did to serve those constituency groups and secure those votes were wrong and not worth emulating.

I could not even begin to do justice to Amity Shlaes’ talk here. I recommend taking a look at her book The Forgotten Man, if you have any interest in the history of the Great Depression.

Following Ms. Shlaes’ address, there was another panel discussion. This one was moderated by Mark Johnson and included Art Woolf, Dawn Terrill, Amity Shlaes, Bill Schubart, Christopher Ellis, and April Cornell. (A brief bio of each panelist can be found here.)

The opening question was about what the panelists viewed as the impediments to business here in Vermont.

Art Woolf cited regulations and taxes.

April Cornell said that the business climate is not so bad in Vermont.

Bill Schubart said that the state has not provided any impediments to the growth of his company.

Dawn Terrill said that she acquired her business after it was started, so she had no problems, but she referred back to the problems faced by businesses when Vermont imposed community rating on health insurance and many insurance companies left the state making it more difficult for businesses to provide health insurance.

Ms. Terrill also brought up the lengthy permitting process that adds time and cost to development.

Amity Shlaes said that people in this state tend to look at a business that wants to expand and think that the business is big enough and the business owner is just being piggish, but we need them to think that expansion is a good thing because it will add more jobs.

Christopher Ellis gave a great analogy (and you have to read this with the charming British accent of the speaker): If you have a golden goose, you are better off developing a taste for eggs rather than a taste for goose meat.

Art Woolf brought up the fact that people in VT tend to see growth as negative.

Dawn Terrill suggested that someone needs to paint a picture of why growth is good, specific to the growth being proposed at the time.

At some point, the topic turned to health care, which is usually the largest expenditure for a business.

Bill Schubart gave us a sobering look at the future of universal health care, which according to him is inevitable because it is costing too much. Mr. Schubart explained that we will need to change the way we view health care. Universal health care is not going to provide the type of extreme measures that are now employed to, for example extend someone’s life by a couple of months or try to save a severely premature baby. He said that national health care will require us to redefine what we think about health care and be reintroduced to death.

(And, yes, I will be covering this in another post, to be sure.)

Dawn Terrill noted that under current law, we can’t choose a health insurance plan that costs less, but does not cover extreme measures. She would like to have that option. Policy changes can help insurance companies offer less expensive plans, but people do not want to admit that the businesses (in this case, insurance companies) can be part of the solution.

Mr. Ellis talked about the British system. Emergency and preventative care is totally free, and most people are happy with how it works, but it has become an inefficient, bloated bureaucracy and there can be dreadfully long waits.

All of the business owners agreed that health care is a large expense, and growing too fast.

Bill Schubart said that the state needs an economic vision.

Art Woolf responded that the 2-year term makes it hard to develop a plan. Also, once government has a plan, it does not like to change, so there is a drawback to a state economic vision.

Amity Shlaes suggested that the state form a regulatory- and tax-free enterprise zone to see what would happen.

The panelists were asked what the one thing they would change would be, if they could.

Art Woolf: Level of taxes.

Amity Shlaes: Income tax.

Dawn Terrill: Reform education system, students need a financial education.

Bill Schubart: Make the rules consistent – don’t change them in the middle of a project, apply them fairly, and get a quick (within 30 days) response from the government when there is a problem.

April Cornell: Exchange with Montreal.

And Christopher Ellis said that we need more venture capitalists (like Cairn Cross).

That’s all I have for notes on the second panel.

The day closed with an address by P.J. O’Rourke, which I could not even attempt to duplicate here, but if you ever get a chance to hear him, do it. You will be glad you did. The man is very funny.

I do have a few ideas that came out of the symposium that I will discuss in separate posts in the coming days, but this concludes my summary of the day.