Montpelier Tar Babies

by Martin Harris

Without getting too deep into the now-dangerous-on-racism-grounds Uncle Remus story of Brer Fox, Brer Rabbit, and the Tar Baby, (the Pleistocene victims of the LaBrea Tar Pits are a better example) recent events in Montpelier illustrate quite nicely how the Progressive instinct to subsidize its client pro-voters with taxes from its non-client agin-voters eventually gets to the point where retreat becomes both essential-for-survival and impossible-to-execute. That’s why skeletons of saber-tooth tigers are found (delightful irony) in transfer-payment-dependent downtown Los Angeles, right next to the bones of the once-succulent baby mastodon targets they thought to feast upon without hazard. Grasping the Tar Baby always proves easier than releasing it, just as British Prime Ministrix Margaret Thatcher famously observed of such re-distributionist practices that “:sooner or later you run out of Other Peoples’ Money”. Whether Vermont Guv Peter Shumlin now recognizes (without so admitting, of course) the inevitability of her wisdom, we know not. Probably never will. We do know that, having earlier grasped the dual Tar Babies of State-specific sweeteners for the Federal Earned Income Tax Credit program and a State-specific program for subsidy of child-care to low-income job-holders, he’s finding it hard to get un-stuck from either one in order to grasp the other even more expensively. And we can reasonably suspect that his dual-Tar-Baby problem stems from his not-so-far-admitted recognition of his underlying OPM-exhaustion problem. Probably never will.

The Federal EITC, originally proposed in the Prez 36 Great Society visions of the supposedly-Soaring Sixties, was actually created in the Administration of Prez 38: in 1975, it began as a rebate of 10% of income to earners of $4000, with a sliding scale up to $8000. Since then, it’s been increased multiple times, and today 24 States have their own supplementary add-ons. Vermont’s is now the largest, at an added 32% of the Federal, a study by the Empire Center of NY says. Your Humble Scribe’s (admittedly amateur) efforts to learn the monetary details of the Vermont Child Care Subsidy Program were met with a (convenient?) “page-not-found” label on the Department for Children & Families/Agency for Human Services website. Also not visible was any link between pre-K and child care, more on which below. What we do know is that the Guv now wishes to (partially) extricate his fiscal grasp from the EITC add-on Tar Baby to the extent of $15 or $17 million, depending on which source you read, and hand off the resulting amount to expand the Child Care Subsidy Tar Baby. We also know that fellow Prog’s don’t admire this zero-sum-balance approach: Rep. Chris Pearson, a Burlington P, seeks to please his own client “stuff”-voters by demanding that the Guv seek a third baby mastodon to grasp: a new tax on the extraction of natural resources, presumably other than those the State in its ineffable wisdom already forbids extracting. In LaBrea terms, Pearson wants some future paleontologist to find the fiscal-tar-entrapped free-lunch-seeking Guv surrounded by three eventually lethal Tar Baby enticements, not just two. So does the Rutland Herald: in Dickensian terms, its editors ridicule the Guv’s zero-sum proposal as Scrooge’s “you can have a Christmas turkey, but we’ll take away your coal.” More interestingly the RH broadens the definition of “child-care” to include “pre-K”, thereby tacitly conceding the latter’s academic ineffectiveness and offering a new mission label: baby-sitting.

The “stickiness” of such voter-pleasing transfer payments is well-known to observers: consider the “third-rail” metaphor historically used to describe the instant political electrocution of any legislator who might even speculate about modifying (downward) any such program as Social Security, MediCare, MedicAid, or Food Stamps. Similarly, the attractiveness of “more-stuff”’ promises to voters who base their choices on such things is equally well-known, carefully analyzed, and shrewdly pursued by ambitious pol’s: consider the just-finished Presidential campaign. But, like the saber-tooths found in the petro-trap of LaBrea, pol’s who think they can grasp the Tar Baby and later easily release it will eventually find to the contrary: think today’s problems in Greece and Spain. When the US will become equally aware of the La Brea destiny inherent in ever-increasing transfer payments (the US budget is now 2/3 re-distribution, up from 1/3 in the last 50 years, a just-published American Enterprise Institute study says) we don’t yet know, Even less do we know when, or even whether, Vermont’s multiple Tar Baby adhesions will become irreversible and therefore lethal: the California example has two aspects.

One, described above, is the LaBrea Tar Pits predator-predatee analogy to the difficulties of reducing transfer payments once established, to the point where both the designated givers and the intended takers are eventually found dead, fiscally entrapped in a grasp they could not release. But the other is the California earner-flight phenomenon, where the stats of upper-income-quintile exodus from the Golden State, in response to ever-rising levels of taxation and regulation, are already well-established; meanwhile, the unique Vermont Anomaly describes a situation where older cohorts of upper-income-quintile folks have been migrating into a high-tax- and -regulation State with high cost-of-stay, and few truly-outstanding attractions in terms of economics, education, or even environment; and they’ve done so, up to now, in numbers that have so far modestly exceeded the out-migration of younger families-with-children in pursuit of better opportunity and lower cost-of-stay elsewhere. Professional economists haven’t yet (to HS knowledge, that is) addressed the Vermont Anomaly, but they’ve begun to publish on two directly-related (HS opinion) phenomena: the enormous dollar size and impact of the Inter-Generational Wealth Transfer which started with the saving-and-investing successes of the Greatest and Silent Generations and is continuing with the BabyBoomers’ bequests to (mostly) the Millenials; and the nationwide-scope of Rural Gentrification, defined by the Census Bureau, for analytical purposes, in terms of those non-metro counties with the highest percentage gains in passive personal and household income. IGWT is estimated by The Center on Wealth & Philanthropy as predictably in the $41 trillion range over this half-century; a Census map of US counties shows half of Vermont’s in the RG category. More State-specific data –rankings, for example– we don’t yet have. Either or both may yet explain why the Guv may be able to grasp multiple fiscal Tar Babies and yet evade the Uncle Remus/LaBrea-analogy fate of our Pleistocene predecessors. Just as they did, we’ll know whether our decisions have firmly entrapped us, and then have lots of time to contemplate our fate, long before they kill us.