Op-ed
Local tomatoes, sure, but how much will they cost?
By George Balco - September 13, 2007
The Times asked George Balco to review and comment on an August, 2007 consultant's report whose recommendations are among those being considered by the livelihood and commerce work group of the Martha's Vineyard Commission's Island Plan effort. The consultant's report, "Leakage Analysis of the Martha's Vineyard Economy: Increasing Prosperity through Greater Self-Reliance", By Michael H. Shuman and Doug Hoffer of the Training and Development Corporation, was central to an OpEd column written by the work group's chairman, John Abrams, and published in the Aug. 30 edition of The Times. Mr. Balco, for 30 years a Wall Street investment analyst and strategist, lives in Vineyard Haven. He was chairman of the Tisbury finance committee for nine years. A copy of the Shuman-Hoffer report is available here.
This paper, presented as a part of the ongoing Island Plan for the Future, is one of the oddest economic analyses I have read in my years in the financial/economic field. To sum it up very briefly, the paper strongly urges that by taking in each other's laundry, everything would improve. Or to state it a different way, I should buy my friend Jack's tomatoes even if they cost more than other tomatoes, and that will help everyone.
The study starts by going into great detail about the current makeup of Island employment and how it differs from national averages. One glaring oversight that I find in this part of the study is that the government sector, certainly our largest source of year-around jobs, is totally ignored in the data presented.
The next phase of the study compares the breakdown of the Vineyard workforce to national averages and notes where there are significant differences. This is where it gets humorous. Fishing, construction, real estate agents, and water transport are all areas where we exceed the national average in employment percentages. Really. I think I knew that.
These same tables (chart2a, 2b) are then used to suggest areas where focus could be placed on new job creation. The authors note, "There is virtually no "Mining" activity on the Vineyard." The table suggests that there could be 25 jobs in mining based on the national average. I say, let's reopen those Chilmark clay pits and fire up the brick factory. The authors are again critical of our going to Targets and Wal-Mart. What if they knew about BJ's and Kappy's?
Following this, the authors go on to present (Chart 4) how 1,200-plus new jobs can be created in various fields. What they do not deal with here or elsewhere is whether or not 1,200 or any other number of new jobs are in fact needed on the Island, given our current population, age breakdown, and unemployment data. This is another shortfall, which undermines the entire rationale of the study.
The remainder of the report deals with the economic leakages that exist now and with ways to plug them and create the additional jobs and GDP that the consultants project. In all fairness to the authors, there are a few good ideas scattered in here, many of which are already underway in some fashion. This is the section where I have to buy Jack's tomatoes. It also suggests expanding local manufacturing, particularly in arts and tourist items. I am surprised they did not suggest rug weaving. It would be a great winter activity for all ages. In this section and further on they suggest local investment by pension funds, citing the municipal retirement fund. Pension trustees have a fiduciary responsibility to produce the highest possible returns commensurate with the level of risk. These are not monies available cheaply for local projects.
The report further calls for specific 10 percent shifts in resident expenditures in a number of areas. It does not deal with where I get the money to shift to these higher priced alternatives. Among these, it calls for replacing 10 percent of all fossil fuels with local biofuels and 10 percent of all gasoline with ethanol. How much corn do we grow?
The final part of the report (Appendix 1) presents a long list of tools for consumers, investors, entrepreneurs, and policy makers to accomplish the goals outlined. Among the consumer tips I like is the one about printing our own money. They don't mention the very successful "Our Island Club." Among the tools for investors, I particularly like the idea of putting together a local stock market. That's great. We could gather at Mocha Mott's in the morning and then at some tavern in the evening to deal with our bad trades. The tools for policy makers lists 21 items, many of which are already being done in one form or another and some, such as giving a bidding advantage to a local business, may be not legal.
In summary, I feel this is an analysis of limited or little use to the Island. I realize that it may be a part of a larger proposal, because it certainly does not stand on its own. The report totally fails to address the transportation issue, which impacts all the ideas presented. There is no consideration of zoning, land use, or availability as constraints. There is no justification as to why this plan is needed. Much of this study is clearly a cut and paste with the Vineyard substituted in place of Toto and Dorothy's home town in Kansas.
Sorry Jack, your tomatoes are too expensive for me. How about a beer?
