Business & Economy

Schubart: Lest we forget, the economic engine is powered by the people

Phil Scott
Gov. Phil Scott speaks at a press briefing on the COVID-19 outbreak on Friday, March 20. Photo by Mike Dougherty/VTDigger

Bill Schubart is a regular columnist for VTDigger. He is a retired businessman and active fiction writer, and was a former chair of the Vermont Journalism Trust, the parent organization for VTDigger.

It’s a bizarre dichotomy in current national politics that pits the health of Americans against the health of the economy, as if the two were wholly separate entities. Many local mayors and governors, perhaps because they’re closer to those whose lives they affect, seem more inclined to choose a path that ensures the well-being of their constituents as they begin planning to reopen social and commercial activity.

When the economy, however, is understood as an entity unto itself, divorced from the human beings who impel it, we endanger our communities and those who live in them.

People are the economic driver of any economy. They provide its manufacturing productivity, its services, its innovations, and, not least, its consumption. The rent-seekers and transaction-intermediators whose wealth comes without consideration for those who provide it and who contribute to it only as consumers, worship a false idol. To divorce the well-being of those who are the engine of an economy from the economy itself tempts us into dangerous territory.

The current congressional face-off between Speaker Mitch McConnell, who is threatening to withhold an additional $3 trillion in additional local and state support during the pandemic unless business receives blanket legal immunity from lawsuits for “reckless endangerment” exemplifies the fantasy that the economy exists wholly apart from those who drive it.

The president measures his own political security in stock market indices, trade balances, and gross domestic product. True leaders measure their success by the social and economic well-being of those they govern, those who contribute to economic productivity and, more important, the consumption that has driven 70% of our economy until now. Leaders understand that a worker to be productive must have had an education, access to health care, transportation, a livable wage, and shelter, all key prerequisites of worker productivity and consumption.

The Republicans I grew up with during Vermont’s “Republican Century” that ended when Phil Hoff was elected governor in 1963 were, to a person, believers in the well-being of Vermonters. They believed and funded a social safety net. Some were the pioneers of Vermont’s landmark environmental legislation. By today’s standards, they were conservative only in the fiscal sense, believing we should not spend money we didn’t have. That spirit survived in Govs. Deane Davis, Dick Snelling and Jim Douglas and, at the congressional level, Sen. Bob Stafford, Sen. Jim Jeffords – though he ultimately abandoned his party when the Tea Party took over the GOP, and Rep. Dick Mallary, who forfeited his political position with his support of civil unions. It survives as well in our current governor, who walks a fine line between current Republican orthodoxy and Vermont’s more benign Republican roots.

The state and federal contrasts are stunning. The vast majority of Vermonters give Gov. Phil Scott full credit for his leadership during the pandemic. He has done what any good leader does in a crisis rife with unknowns. He has enlisted and empowered the experts with relevant knowledge, let them share it widely and used their expertise to craft a policy that benefits Vermonters. Scott has clearly prioritized the well-being of Vermonters in the false-narrative conflict between the economy and the well-being of those who make it up. He knows they are one and the same.

Crisis leadership, however, is different from visionary leadership. If we want Vermont’s economy to thrive we must pay as much attention to everyone’s well-being and access to opportunity going forward as we do to returning to what we think of as business-as-usual.

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We must work together to understand what this natural comeuppance is teaching us about the benchmarks of our well-being. Covid-19 has stunningly amplified the challenges for those who drive our economy: educational access and affordability, access to health care, housing, transportation, and food for starters. This is a time for leaders to avoid the pitfall thinking that the economy, in and of itself, is a living, breathing entity to be preserved above all else for the benefit of those who extract wealth from it.

With able partners, I co-founded two companies, one of which foundered, as it was driven by creative passion rather than sound business sense – Philo Records. With additional partners, willing shareholders, and local bank funding we went on to start Resolution Inc., which, when we retired 27 years later, was acquired by a private equity firm and was out of business within three years, leading to the loss of 275 Vermont jobs.

We knew personally and deeply valued the people who made our company successful and expressed our gratitude in a living wage and solid benefits including full individual and half of family health care coverage as well as the maximum 401k contribution. We shared good and bad financial information with our employees, vesting them in our long-term well-being. My only regret is that we were not able to sell the company to the employees who made it successful.

Our governor has done a terrific job overseeing the well-being of Vermonters in a pandemic of apocalyptic proportions. Whether he runs for another turn and wins or is turned back at the polls, my sincere hope is that he or our next elected leader understands that Vermont’s HO-gauge economy is the byproduct of Vermonters well-being, not a competitor to it.

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Bill Schubart

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