The buzzard on Bruce Lisman’s shoulder, Tom Pelham, has disgorged another dire warning of imminent financial shipwreck:

Vermont’s state budget is about to hit the rocky shores of fiscal reality.

Oh no! Sound the alarms! Man the lifeboats! Abandon ship!!!1!!1!

This lovely little morning pick-me-up appears in the Opinion section of VTDigger, and presumably coming soon to a newspaper op-ed page near you. In it, Pelham provides a laundry list of the alleged financial crimes and misdemeanors being perpetrated by our state government, and prescribes his usual cure: A return to the policies of Jim Douglas.

Including — and I guess he’s actually serious about this — a re-adoption of Douglas’ long-discredited “Challenges for Change” hornswoggle.

Yes, them’s was good times for Pelham, who served as Douglas’ tax commissioner. And, before then, as Howard Dean’s finance commissioner, which is supposed to “prove” his bipartisan bona fides. (Thanks to his time in the Dean Administration, back when Dean was a devoutly centrist fiscal hawk, Pelham provides a thin patina of bipartisanship to Lisman’s pro-business vanity project public policy NPO, Campaign for Vermont.)  

It all started, as Pelham never tires of reminding us, with the Legislature’s 2009 override of Douglas’ budget veto. That single action “turned [Vermont] away from a safe course” and “set Vermont on a course of unsustainable spending, chronic underfunding, hidden cost shifts, higher taxes and a ‘kick the can down the road’ approach to problem solving.”

Well, actually, anyone in the Shumlin Administration would tell you that they spent much of his first term unraveling all of Douglas’ cost-shifting and can-kicking, not to mention undoing the damage done by “Challenges for Change.”

But unlike Pelham, I’m not here to reair old grievances, but to point out the unacknowledged elephants in his rhetorical room. You may have heard of them: the financial meltdown of 2008, America’s growing income inequality, and Tropical Storm Irene.  

Let’s start with 2008’s fiscal calamity. You know, the one that happened while Bruce Lisman was an officer on the bridge of Bear Stearns when it precipitously sank (but was, somehow, not at all involved or responsible). Well, Pelham pulls one of the basic film-flams of fiscal conservatism: using 2008 as a base year.

Whenever you see 2008 as the base year, immediately realize you’re being bullshitted. Because the Wall Street meltdown caused massive disruptions to our economy, massive drops in tax revenue, and massive increases in public-sector spending (stimulus, bailouts, human services). So when Pelham asserts that Vermont’s budget has grown dramatically since 2008, he’s got his thumb pressed firmly on the scale. He doubles down on the deception by pointing out that the state budget has grown far faster than the state’s economy.

Since 2008.

When the economy went into the toilet, and is only just starting to recover.

Which triggered huge increases in government spending, to mitigate the economic (and human) cost of Wall Street’s misadventures.

And which also caused huge losses in public-sector pension funds, which were, of course, invested in a wide variety of Wall Street products. (Indeed, due to a quirk in federal law, public-sector pension funds are not subject to the same “prudent man” conventions as private-sector funds. Which means public-sector funds can be invested more dangerously, and often are*.) So when Tom Pelham rehashes his rant about Vermont’s underfunding of pensions, remember that a lot of the blame lies at Wall Street’s door, and that the current Administration has been trying very hard to increase pension funds at a time when finances are extremely tight.

*See Matt Taibbi’s excellent article in Rolling Stone, entitled “Looting the Pension Funds.” The “prudent man” reference is from page 2 of the online article.

Pelham also moans about Vermont’s bond rating, despite the fact that it remains at AA+ and was actually upgraded by S&P last year. He gives the Shumlin Administration and the Treasurer’s Office absolutely no credit for this; rather, he says that Treasurer Beth Pearce “inherited” that rating “from the responsible fiscal management” of past Administrations. You know, the “responsible fiscal management” of wise men like, ahem, Tom Pelham.

You gotta admit, the man has gall.

Pelham also fails to make any mention of Tropical Storm Irene’s huge impact on the Vermont economy and government spending and borrowing. Nope, nope, all this mess has one single cause: the infamous Budget Veto Override of 2009.

I could go on (and on and on) mapping the rich veins of hokum in Pelham’s screed, but I’ll just do one more.

Pelham devotes one section to human-services spending, i.e. WELFARE, which he summarizes as “Higher Spending, Few Results.” In it, he cherrypicks financial data to “show” that Vermont has allowed human-services spending to skyrocket while poverty continues to rise.

He blames this, primarily, on Shumlin’s abandonment of “Challenges for Change,” which would have (per Pelham) solved all our problems. When, in fact, CFC made a hot mess of human services, and the current administration has spent a lot of time and effort on remediating the damage.

What Pelham doesn’t mention — at all — is America’s (and Vermont’s) growing income inequality and poverty rate, and the continuing repercussions of the 2008 meltdown.

Remember last winter, when Governor Shumlin was defending his proposed slashing of the Earned Income Tax Credit program by pointing out its huge growth? A whopping 49% over the past eight years? Well, perhaps you also remember that that 49% was due, almost entirely, to two factors: inflation, and larger numbers of the working poor. And we have more working poor because of the 2008 meltdown and the continuing squeeze on the middle and working classes.  

Same thing goes for the overall rise in human services spending. Pelham whines that we’re getting no bang for our buck, because poverty rates have somehow increased. Well, two things he fails to address: Human services programs are not meant to eradicate poverty, but to mitigate its harsh effects; and those programs have been swimming against very powerful economic tides that are pushing poverty rates ever higher.

Pelham’s arguments look substantial at first glance. But upon further examination, they fall apart like wet Kleenex. Because of his past resume, Tom Pelham gets far more credit than he deserves for being (1) a public-policy expert, and (2) a nonpartisan. He is neither.