Month: August 2018

By S.D. Plissken | August 26, 2018

It may be that people these days are less familiar than formerly with the tale of Jack and the Beanstalk. Let us set the scene:

Jack is a young, poor boy living with his widowed mother and a dairy cow, on a farm cottage. The cow’s milk was their only source of income. When the cow stops giving milk, Jack’s mother tells him to take her to the market to be sold. On the way, Jack meets a bean dealer who offers magic beans in exchange for the cow, and Jack makes the trade. When he arrives home without any money, his mother becomes angry and disenchanted, throws the beans on the ground, and sends Jack to bed without dinner.

Chairman Thibeault had a bright idea, on which he expounded at last week’s Board of Selectmen’s (BOS) meeting. (Selectman Lucier was absent). Thibeault would like to trade the Town cow for some State magic beans.

Thibeault: Alright. Next on the agenda: A possible State Boat Ramp at the Town Beach. I put this on there [the agenda]. So, this has been talked about a little bit I guess in the past. I reached out to the State a little while ago to get some more information on the State boat ramp. Basically, it’s a 25 to 35-year lease with the State. They require designated trailer spots. It has to be open 24/7 for free – for boaters – to put your boat in and out. It is not intended to be a swimming area. It is not intended to be an area to fish off the dock. The State initially just took a look on Google Earth at the Town Beach. They didn’t say, “yes,” they didn’t say “no.” There were definitely some challenges if we were to try and do a State Boat Ramp there due to competitive parking. The fence would have to be changed a little bit. So, I just wanted to bring it up to the Board of Selectmen, because it’s essentially a Board of Selectmen decision. The State is – would be – willing to talk to us if we want to talk them to get further information. Like I said, it wasn’t a definite “no,” it wasn’t a definite “yes,” because there are challenges with the ball field, with the Town Beach, competing for parking. That was one of their initial concerns, so I wanted to share that with the Board – something to think about. Basically, the State then would be – they would pay for – the boat ramp and maintaining it for those years. So, something we can think about.

Hutchings: Do you want a response?

Thibeault: Yep.

Hutchings: I think it would be a shame to give that to the State. I really do. I think that’s probably kind of the pearl – in the oyster – is that beach area.

Thibeault: You wouldn’t be giving the beach area. Just the spot for the ramps.

Hutchings: You’re going to wind up losing – I mean it’s not a huge area to begin with. We have to give parking up for … for trailers and that. We’re going to lose quite a bit, I think. I asked one of the employees Sunday who was working at the gate to pull up the numbers knowing that this was on the agenda and the amount of money that that brings in up there – I think it would be shame, I mean it’s self-sufficient. I think if we took our money and repaired the boat ramp ourselves, as a town. I think, … I just think it would be a shame to give that away to the State. You’re talking since the middle of May ’til the middle of August, it’s brought in almost $33,000 and that’s not saying the …

Thibeault: $33,000?

Hutchings: $33,000 – $32,726. The boat ramp and the beach. I’m lumping it altogether, because ….

Thibeault: I’ve asked several times how much the boat ramp itself brings in and was told it couldn’t be separated.

Hutchings: Well, I went up and asked Diane on Sunday morning early if she would mind doing this, because when I saw this and she said, how do you want it broke down …

Thibeault: There’s something wrong with those numbers, I think.

Hutchings: Well, I’m saying this is the beach and the boat ramp.

Thibodeau: What were those numbers again?

Hutchings: $32,726, starting from May 8th all the way to August 16th.

Thibodeau: 32 what?

Hutchings: $32,726. The boat ramp – it’s not that the boat ramp brings in the huge amount – the beach brings in the bigger number, but I sat out there, I’ve gone out several times and sat there and watched people who’ve come up, and they bring the whole family, some one of – Uncle Bob we’ll say – brings up the boat, he puts the boat in, and the kids are all out there playing on the beach and then they alternate – they run ’em through. There’s a lot of that that goes on. I think it would be a shame to give that to the State. I really do. So …

Thibeault: I think there’s several options down there and I think we could still charge for the beach and the State ramp would actually bring people into town and promote the town of Milton, which economy is hurting and help the businesses in town because you’d have a State-advertised boat ramp. I do think that we need to be able to separate out how much money just the boat ramp is taking in and my understanding is the way they … they can’t do that right now. The Rec. Commission had actually voted and made a recommendation that that be separated out and I’m not sure where that stands. But, I’m not saying give up the whole Town Beach to the State. That’s not at all what I’m saying if you give up …

Hutchings: But I think if you give up …

Thibeault: … a small part. I’m open to discussing with the State, to see what they have to offer, because it would be a way to get. like I said, a State boat ramp would get us on the map with the State, and also, I mean, we won’t have to pay the cost of putting in the new ramp.

Hutchings: Which is what – about 30 grand? And we already have $15,000 that the taxpayers in town earmarked for it a year or two ago. Two years ago.

Thibeault: But it’s $30,000 we could use on other areas …

Hutchings: There’s $32,726 we could use to put in a new boat ramp. We could put in a nice pavillion down there, so the kids aren’t having to use the tent. I mean, there’s all kinds of things that we could use …

Thibeault: You’re sure there’s no summer camp money in that?

Hutchings: Positive.

Thibeault: Okay. Alright.

Hutchings: I’m just saying. I just think it would be shame to give that away.

Thibeault: Alright. I just think that we need to think outside the box and the $10 fee that we get at the boat ramp – or whatever it is – we have to account for how we are going to bring people into town. And that free advertisement that the State would give us, I think that would help. I wanted to share that with the Board and I guess right now we don’t really have a decision one way or another. So, we can move on.

Now, Thibeault claims that his scheme would save money, a claim that Hutchings questions. But note his main rationale: this would bring people into town to use the now State ramp, which would help businesses, and the State would do the advertising.

The truth is that “helping” businesses is not a governmental function at all. No taxpayer resources whatsoever should be devoted to that purpose. None, nil, zilch.

Government’s supposed justification has always been the protection of life, property, and liberty. At the town level, it is usually taken to also include maintenance of roads and schools. Business and its concerns – its successes or its failures – have no part in this. The town government does not have to, as Chairman Thibeault has it, “account for how we are bringing people into town.” “Boosting” business is not a concern of government of at all.

Surrendering a part of the Town Beach – as some have said, its “pearl” – to the State based on Chairman Thibeault’s theory – just a theory, mind you – that it would somehow “help” business is misguided. That has the taxpayers subsidizing the businesses. That is not how free markets work. He needs perhaps, as happened to Jack in the story, to be sent to bed without his dinner.

But neither he nor Milton town government will welcome these truths.

Of all the offspring of Time, Error is the most ancient, and is so old and familiar an acquaintance, that Truth, when discovered, comes upon most of us like an intruder, and meets the intruder’s welcome.

References:

Milton Board of Selectmen. (2018, August 20). Milton Board of Selectmen Meeting, August 20, 2018. Retrieved from https://youtu.be/LfPichonEYQ?t=1840

Wikipedia, (2018, August 23). Jack and the Beanstalk. Retrieved from en.wikipedia.org/wiki/Jack_and_the_Beanstalk

Wikipedia. (2018, May 20). Extraordinary Popular Delusions and the Madness of Crowds. Retrieved from en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds

By S.D. Plissken | August 13, 2018

Milton has a serious knowledge problem: it lacks awareness of the “Local Knowledge Problem.”

A succession of Milton selectmen, town officials, planners, economic developers, as well as much of its population, have been absolutely certain that Milton needs a family restaurant at Exit 17. They have known this, almost as an article of faith, for years. Few question it.

Some might ask how they received this revelation (or why they have persisted in believing it for so very long). Well, they will tell you. The major weight of Milton’s increasingly high property taxes is borne by homeowners. Unaccountably, those taxpayers do not like to bear that burden. So, that tax burden should be shifted onto businesses. Or, at least it could be, if there were only more businesses. Milton needs more businesses.

The business owners’ incentive to line up for this mulcting remains unclear. It might appear that they have none at all. Alternatives, such as reductions in town government or in its budgets (or even just holding the line), easing local regulations, seeking state regulatory relief, etc., are never seriously considered. That would be crazy. Milton just needs more businesses.

There are aesthetic considerations too. Milton deplores just any business venture that might arise through natural market processes. (Witness the China Pond and Mi-Te-Jo expansion melodramas). Milton does need more businesses, but they need to be the “right” sorts of businesses.

Restaurants might be good, but franchise restaurants are obviously less so. They do not strike the right tone; they are a bit déclassé. However, a “family” restaurant could work quite nicely. That would be just the “right” sort of business. Absolutely. Milton needs a family restaurant business at Exit 17. No doubt at all. The town government knows what is best for Milton.

But it does not know. It could never know – that would be impossible – because of the “Local Knowledge Problem.”

Professor F.A. Hayek (1899-1992) of the London School of Economics (and winner of the Nobel Prize in Economics) published “The Use of Knowledge in Society” (often called the “Local Knowledge Problem”) in the American Economic Review in September 1945. His article was rated recently as among the most important 20 papers of the last 100 years. In it, Hayek explained why central planning is all nonsense.

The knowledge required for economic planning is imperfect, transitory, and widely dispersed among many actors. No board, commission, or committee of individuals could ever hope to assemble enough for an optimal solution (and perhaps not even enough for a poor one). It is impossible for them to do so. The necessary knowledge resides temporarily – the situation is ever changing – in the array of all market participants. (Nowadays, it might be said that the necessary knowledge and information is “Crowd Sourced”).

As one proceeds north from Milton along NH Route 16, the results of successful decisions based upon such dispersed local knowledge may be seen readily. There are three gas station convenience stores, two restaurants, a trading post, an auto parts store, a sugar house, a Kung Fu dojo, a garden center, a motel, a farmers’ & crafters’ market, a stove museum, and a fish farm. There are also quite a few home-based businesses. In season, there are several farm stands.

All of these businesses were created without benefit of central planning, through market processes. Their entrepreneurs took a chance, based upon their own intuition and local knowledge. They invested their own capital (available in part due to lower taxes), resources, and effort in those concerns. Bravo! They have satisfied market demand, and done so with no cost, risk, or loss to taxpayers if they fail to thrive.

Milton’s central planners have their thumb on the scale in “knowing” that Milton needs a family restaurant. Without adequate knowledge, which they can never have, it is their own preferences they put forward in defiance of market desires. That can garner only imperfect results at best and likely “it will all end in tears.” (Remember the most recent strong preference failure of this sort: the landfill?).

Why should it not be that an electric car-charging station, farmers’ market, sheep farm, meadery, dojo, cell-tower, billboard, or things not yet imagined arises at Exit 17? Why is a family restaurant necessarily the optimal solution? How can planners know that? (A free market might even prefer that location remains as it is). Obviously, they cannot.

Yes, there is a sort of arrogance to it all. Milton and its taxpayers are not part of some SimCity game.

Of course, there is also the additional hurdle of water and sewer facilities. The proposed Exit 17 location lies beyond the town water network. (Exit 18 is even further beyond the Pale). It has been estimated that it would cost at least $1 million to extend those services out to the desired restaurant site. That is daunting. But, wait. BOS Vice-chairwoman Hutchings revealed recently that the $1 million figure is an underestimate. In fact, it would cost much more than that, vastly more. (And government estimates usually need to be tripled to approach real-world accuracy).

Tax reductions would allow business growth. But that implies an attendant government reduction. Town government sees no benefit in reducing itself: such a proposal lacks appeal. Impossible. Put such notions aside.

The Exit 17 family restaurant must remain an article of faith. Government planners know it.

Meanwhile, the Stop, Drops & Rolls coffee shop closed this week. Its proprietor seeks to sell both the business and the property. “We just can’t generate the customers to continue to stay open.”

References:

Hayek, Friedrich A. (1945, September). The Use of Knowledge in Society. Retrieved from fee.org/articles/the-use-of-knowledge-in-society/

Stop, Drops & Roll. (2018, August 6). It Is a Sad Day Today. Retrieved from www.facebook.com/StopDropsandRoll/

Wikipedia. (2018, August 13). Friedrich Hayek. Retrieved from en.wikipedia.org/wiki/Friedrich_Hayek

Wikipedia. (2017, June 20). Local Knowledge Problem. Retrieved from en.wikipedia.org/wiki/Local_Knowledge_Problem

Wikipedia. (2018, August 3). SimCity. Retrieved from en.wikipedia.org/wiki/SimCity

Electra, Dorian. (2010, December 20). I’m in Love with Friedrich Hayek. Retrieved from www.youtube.com/watch?v=Arbfem4BohA