How Sweeeet It Is! 
By Martin Harris

Few things are more fun than finding your instinctive suppositions or theories to be confirmed by statistical fact, and that’s what happened this week when I perused the website of the Corporation for Economic Development. Consider these two state-ranking factoids: 1. Vermont is #49 in the nation for the 2008 wage-level; at $31,320, it’s well below the national average of $44,458, and is above only Montana, which came in at $30, 663. The District of Columbia ranks #1 at $53,330: your tax dollars at work. 2. Vermont is #9 in the nation for the 2007 home-ownership rate; at 69.5%, it’s comfortably above the national average of 64.2%. and lies statistically in the same economic zone as such higher-income states as Pennsylvania (#8) and Indiana (#10). Even to the amateur economist such as your humble scribe, such statistics appear to be mutually contradictory, with low average income and high average home-ownership.

To explain this paradox I fall back on my Daddy Warbucks Theory of Intergenerational Wealth Transfer, as an Occam’s Razor simplest-possible explanation for the economic phenomenon of apparently low-income folks, not finding much profit in growing organic green beans for sale at the Saturday farmers’ market, living quite comfortably, thank you, in housing which costs well above the national average (30% of income) to occupy. In Vermont the average is 39.5% of income, which puts the state at #38 out of 50 (only a dozen states are more pricey to live in) shown in the CFED category of "housing cost burden". We don’t have state-by-state data on housing size in square footage, but it’s safe to guess that these aren’t little 900 SF Depression cottages, relatively rare in New England but quite common here in Appalachia.

My Daddy Warbucks Theory (you might test your recent high school grad on the literary icon Little Orphan Annie, first invented by James Whitcomb Riley and from 1924 to 1968 the cartoon-character recipient of generous financial support from an equally fictitious father-figure industrialist who maintained her in the life-style cartoonist Harold Gray deemed appropriate for her) posits that, like Annie, the low-income but high-status organic bean-growers in Vermont are typically subsidized for large cash-outlay requirements like housing by parents or grandparents, which would then explain why home-owners near food-stamp-entitlement levels in terms of income can afford to purchase, and stay in, some of the more expensive housing in the nation. It’s easy when you, as the trust-funder recipient of either a monthly stipend or a large cash infusion as needed, don’t personally have to pay for your hearth-and-roof out of your own earning ability and saving discipline.

These two factoids –low average wage and high average housing level- furnish welcome support for the thesis I’ve previously offered in this space, the idea that Vermont is moving fairly rapidly from an active (earned) income economic base to a passive one. It shows up, sort of, in the stats I’ve previously recited here showing earned income over the 1992-2004 period just about keeping up with inflation, while farm income showed not even a nominal increase and therefore suffered an actual one-third drop, and the passive category, everything from Social Security and pensions to investments and, yes, trust-funds, showing a growth of several hundred percent. But large percentage growth from a small starting point isn’t enough to prove the thesis; even now, trust-funder income is but a relatively small fraction of the overall state-wide income-source pattern. Thus, one can’t very well use the income stats alone to theorize about the impact of the trust-funder sector, but now one can, indeed, point to the inherent conflict between the wage and housing stats to theorize that something economically remarkable is, in fact, going on, and it’s grown to a scale large enough to show up in the state-wide stats. The two CFED factoids aren’t irrefutable proof of my trust-funder-economy thesis, but –how sweet it is— they’re certainly a pair of strong supporters.

As for the "How sweet it is" phrase invented and popularized by Jackie Gleason: did it first surface in the 1962 movie Papa’s Delicate Condition" as reported by Wikipedia, and if so, how could it have been used by bus-driver Ralph Kramden to celebrate his minor domestic victories in the late-50’s TV series "The Honeymooners"?

And, as for the CFED factoids, there’s more where the above two came from. One, for example, reports that Vermont is #3 in the nation for low percentage of house-mortgage debt; the average homeowner in the state owes 53.4%. Hawaii is #1 and New York is #2. Nevadans are #51 at 102.9%. Additionally, Vermonters are far less mired in credit-card debt than the national average, and similarly far less statistically likely to be in bankruptcy, all indicators of solid economic comfort. How then do you explain and correlate all these indicators with low wages? Just askin’.

Martin Harris is a former Chairman of Citizens for Property Rights