HEADLINES

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Talking 38 Studios Scorecard on TV and Radio

Since the release of the RI Center for Freedom & Prosperity’s scorecard showing how legislators have voted when the 38 Studios scandal has been within their scope of office (as opposed to calling on the attorney general to release information), I’ve had a few media appearances.  The most extensive, also touching on the legal settlement just announced related to the bankruptcy, was on Dan Yorke’s State of Mind on WPRI’s digital station:

 

I also had my first appearance on Frank Coletta’s Business Lunch on WJAR, Channel 10:

 

And on the audio-only front, I spoke with John Loughlin on WPRO, in part 2 of the August 20th show.

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Frias Calls on Speaker to Ban 38 Studios-Type Moral Obligation Bonds

The following was just blasted out via e-mail.

MR. SPEAKER, TAKE THE PLEDGE: NO REPEAT OF 38 STUDIOS

Cranston, RI – Last week, Rhode Island reached a settlement with Wells Fargo Securities and Barclays for approximately $26 million, but taxpayers are still expected to pay millions for the 38 Studios moral obligation bonds. The former Economic Development Corporation issued moral obligation bonds as a result of 2010 legislation supported by Nicholas Mattiello when he was House Majority Leader. Recently, in a commentary, Scott MacKay, of Rhode Island Public Radio, asked “Why Won’t Pols Who Gave Us 38 Studios Pledge No More Moral Obligation Bonds?”

Steven Frias, Republican candidate for Rep. District 15, commented: “I have been campaigning for two months on a platform calling for the end of moral obligations in order to prevent a repeat of 38 Studios.

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Misunderstanding the Problem of the Master Lever

Sam Howard wants to conclude that the master lever (allowing voters to simply vote for a political party for all open offices) was never Republicans’ problem in Rhode Island, because he wants to believe that the issue is “their party’s toxicity to a state that overwhelmingly supports Democratic policies.”  One’s first thought upon reading that might be that RI progressives have to get their story straight.  Here’s Bob Plain reporting Progressive Democrat leader Sam Bell’s belief that “the people who dominate the Democratic caucuses in the General Assembly … really seem to stand with the national Republican Party on the core issues that divide the two parties at the national level.”

But Howard wants to believe progressive policies are popular — perhaps because without popularity, they’d just be society-and-soul-destroying nonsense in the service of totalitarians — so he wants to conclude that eliminating the master lever won’t really help Republicans.  Mind you, he’s putting forward his evidence before there’s been a single election without the lever:

Eliminating the master lever was supposed to assist the RI Republican Party (and strengthen RI’s democracy) by assisting in one of the most important things a party needs: candidate recruitment. The problem, as it was posed, was that the prevalence of the master lever basically acted as a deterrent for potential Republican candidates for the General Assembly; why put in the effort of running if loyal Democrats, voting for president or US senator or governor at the top of the ticket, would simply pull the master lever and obliterate down-ballot Republicans? Eliminating the option would allow Republican candidates to run without fear of such occurrences, thereby assisting efforts to recruit quality candidates.

This paragraph shows a deep misunderstanding of the interaction of human nature in politics, at least on the Right.  Nobody should have believed that eliminating the master lever would be anything but a long-term reform.  Generally, conservatives don’t want to enter a lifelong swirl of politics and government’s rotating doors, certainly not to the degree of people who believe in big government, so there’s no giant wave of people so aware of the career path that they’ve carefully calculated their odds of winning, with the master lever considered.

Rather, potential Republican candidates see the current makeup of the legislature, they have a general sense of their odds of winning, and they know they’ll be a targeted minority even if they beat those odds.  That last is not a matter of the popularity of their beliefs; it’s a matter of the political machine, from the master lever to legislative grants to union thuggery to biased media.  It’s also a matter of accelerating from a near standstill.

Assuming digital-technology-enabled fraud doesn’t swamp its effects, eliminating the master lever will bear fruit at the margins, enabling a few more candidates already crazy enough to run to get in.  With each who does, the level of required craziness will drop and the field of candidates will broaden, with most not realizing the effect the master lever had.

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The 38 Studios Misfire

Putting together the RI Center for Freedom & Prosperity’s 38 Studios scorecard, the peculiarity of the whole matter reared its head.  Most folks who’ve watched the controversy closely know that the Economic Development Corp.’s (EDC) loan guarantee program first arose in a supplemental budget, but the details aren’t widely understood.  Here are some findings that don’t entirely jibe with the common recollection:

  • The increase of the $50 million program to $125 million — to surreptitiously cover the 38 Studios bonds — was not slipped in as a floor amendment during the infamous floor session at which Republican Representative Robert Watson of East Greenwich stood as the lone “nay” vote when the bill came back around a second time.  It was part of article 7 in the SubA bill (2010 7105) that the House Finance Committee sent to the floor with the supplemental budget.
  • More representatives voted against the program in the supplemental on April 13, 2010, than as a separate bill, although all but one apparently changed their views when the bill came up again:
    • Rod Driver
    • Larry Ehrhardt
    • Robert Jacquard
    • Charlene Lima
    • Brian Newberry
    • Robert Watson
  • Cranston Democrat Lima even put in an amendment that would have required disclosure of any elected officials who contacted the EDC on behalf of any company seeking to participate in the program, and 25 representatives voted for it (which is a relatively large vote for an insurgent amendment).
  • The Senate actually did pass the supplemental budget, on April 14, but oddly didn’t transmit it to the governor.

The immediate question that the Center had to consider for its scorecard was whether to count these votes.  Ultimately, we decided not to do so because, in the weird circumstances, it never became law.  Even if, for example, Lima’s floor amendment had passed, it wouldn’t have been part of the law because she didn’t resubmit it to the version of the statute that made it into law.

Had we counted the supplemental, some legislators would have edged a grade up or down, but no incumbents.  Moreover, in the discussion over the years, the public has generally considered the 38 Studios controversy as having begun with the freestanding bill that actually made it to the governor’s desk.

Reviewing the history, though, does make one wonder who knew what, back then, and why an issue that did spark some push-back in April seemed to zip right through when it came around again in May.

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Going After Free Speech Against Incumbents in Connecticut

For the Campaign Regulation Is Unconstitutional file, Joe Markley relates his experience in Connecticut:

Along with my friend and colleague, Connecticut state representative Rob Sampson, I’ve been charged with a violation of campaign-spending statutes by our state elections-enforcement authority. My misdeed was a single mention of Governor Dannel Malloy in each of two mailings we sent during the last state election. …

The fact is, we didn’t bring the governor up to hurt his campaign, but to make our own position clear to voters: Dan Malloy is Connecticut’s single biggest problem. His enormous tax hikes (the two largest in state history, one each passed immediately after his election and reelection), his reckless borrowing, and his refusal to reduce the size and scope of state government have brought our state to the precipice. Prohibiting us from sharing with voters our opinion of the governor would deprive them of the most important piece of political information we can offer.

And that’s the point.  All that stuff about getting money out of politics is dressing.  Some activists sincerely believe it, of course, but whether the political corruption was behind the cause at its inception or the corrupt subsequently identified the opportunity it presents, campaign finance and related regulations are now meant to protect the powerful.  There is simply no legitimate interpretation of the Constitution that allows the government to forbid people from criticizing the king or a duke or an earl when it matters or seek to restrict their funding or force them to list their co-conspirators.

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Escaping Backwards Thinking in Education

Future generations may study the education system in our day as a lesson in how difficult it is to make government do the right thing when there are entrenched interests involved.  Indeed, reading a post by Annie Holmquist on the Foundation for Economic Education site, I wondered if our progeny will think us downright backwards.

Quoting a former public-school-teacher-turned-homeschool-mom named Nikita Bush, The Monitor explains this movement:

“Despite the promises of the civil rights movement, ‘people are starting to realize that public education in America was designed for the masses of poor, and its intent has been to trap poor people into being workers and servants. If you don’t want that for your children, then you look for something else,’ she says.”

Bush is not alone in thinking that the public schools are keeping minority children from reaching their potential. According to a poll released in 2016 by The Leadership Conference Education Fund, minority parents “strongly reject the notion that students from low-income families should be held to lower standards.” In fact, “Nine-out-of-ten African Americans and 84 percent of Latinos disagree that students today work hard enough and instead believe that students should be challenged more to help ensure they are successful later in life.”

According to Holmquist’s post, black students who are homeschooled perform as well or better than the national average in reading, language, and math, and the contrast with black public school students is stunning.  (Having not reviewed the underlying research, I should note the possibility that there may be factors affecting the numbers, such as the relative income of the group.)

The thing that seems backwards, though, is that only in Georgia is it possible for parents to work together for a sort of homeschooling co-op.  How did we get to a place in a supposedly free country in which the government’s underlying assumption is that parents cannot be trusted to educate their children?  That doesn’t strike me as the proper relationship between government and the governed.

Of course, it may be an exercise in unreasonable optimism to think that future generations will have a better sense of how that relationship ought to be structured.

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Check out Your Legislator on the “38 Studios Legislator Scorecard”

The public is outraged that there has been zero accountability on the 38 Studios issue. The insiders have failed to provide any transparency by releasing the 38 Studios documents. The Center is now offering our own version of transparency by publishing a new scorecard that tracks and grades the voting records of lawmakers on the 38 Studios affair. Many people consider it extremely hypocritical for any lawmaker who rated an F or D on this scorecard for their past record to now jump on the band-wagon by calling for the Attorney General or Governor to release the documents.

Despite the johnny-come-lately calls from many lawmakers for the release of documents from the government’s 38 Studios Investigation, 81 of the 113 sitting General Assembly lawmakers graded an “F” on their related voting records. On the scorecard, we documented and scored legislative votes on 15 related bills, amendments, and budgets since 2010 related to the 38 Studios disaster. There have been many missed opportunities for transparency. Why do they feel they have to protect the political machine?

As we approach the November elections, we’re providing voters with the voting records of their elected officials so they can decide whether or not to hold them accountable. It is up to you to choose if you want to change the Ocean State. Overall, of the 178 lawmakers, 132 graded an F, 10 a D, 8 a C, 6 a B, and 14 an A. You can see the full scorecard by clicking here now.

Rhode Islanders have had enough of the insider machine. It is time to make a complete turnaround. We must adopt an open and transparent public policy culture that can make our state a place where our families can be prosperous. The 38 Studios disaster is the perfect example of everything wrong with the way our state is being run. You do not have to tolerate the cronyism and elitist attitude any longer. Don’t be on the sidelines. The rigged system in the Ocean State has kept too many people out of the process. Now is the time for you to speak out and demand that the status quo changes.

[Mike Stenhouse is the CEO of the RI Center for Freedom and Prosperity.]

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When the Tide Has Nowhere to Turn

Although his title may not really capture the point, Jim Geraghty is on to something with “Crazy Theory: This Year the Right Is Winning the Culture Wars.”  Here’s one item of his evidence:

Target Corp. said it will spend $20 million to add a private bathroom to each of its stores by next year, after customer protests of its policy allowing transgender individuals to use whichever restroom corresponds with their gender identity.

My wife mentioned to me, the other day, that at least one Target store in the area had porta-potties outside, with some sort of cleaning station, and when her friend asked what they were for, an employee told her they’re “for the transgendered.”  My first reaction was to suggest that’s what happens when there’s such disconnect between corporate big-wigs and the people.  Making a grand politically correct statement using an entire chain of stores seems very important when perched at the cocktail party top, but as with universities’ capitulating to the whiny brats among their student population, the broader public has different views.

That is to say that Target has learned what happens when your leadership really does have contempt for a plurality of views.

The incident brings to mind Plato’s description of the steps by which an oligarchy deteriorates into a democracy:

This state, then, is in the same precarious condition as a person so unhealthy that the least shock from outside will upset the balance or, even without that, internal disorder will break out.  It falls sick and is at war with itself on the slightest occasion, as soon as one party or the other calls in allies from a neighbouring oligarchy or democracy; and sometimes civil war begins with no help from without.

In Plato’s reasoning, the elites of the oligarchy have become so soft and unlike their fellow countrymen that when anything happens to throw them all together, “the poor man, lean and sunburnt,” will observe of his social betters that they “are rich because we are cowards.” Applying this to Geraghty’s thesis, we might say that the lesson isn’t that “the Right is winning,” but merely that the Left hasn’t yet won — meaning that the self-righteous elite cannot yet impose its every will and fashion on the country with no consequence.

Another way to phrase it would be to say that the cultural tide appears to have hit progressive dams, with none of the releases that a free and equal representative democracy has in place to allow for self governance.  Unfortunately, the turmoil has brought Donald Trump to the forefront, so the next question will be what happens if the dams should hold in November, bottling up the pressure, or if they should break more expansively than is healthy for our society.

Either way, although the Left might be said to be losing, I’m not sure those of us on the right will really consider ourselves to be winning.

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The Practical Distance Between America and Venezuela

A post on by Daniel Greenfield got me to thinking why the United States couldn’t suffer a similar fate to Venezuela’s:

After the fun of electronics stores forced to discount televisions at gunpoint, there were no more televisions. And no more cars. Then no more toilet paper, milk and other basic necessities.

The Socialist government tried to solve its money problem by printing more money. But it wasn’t able to pay for the money it wanted to print because of the inflation which officially did not exist.

Greenfield goes on to note that some American politicians propound policies of a similar mindset, making one wonder whether there’s something in the American character that will eventually stop the process or it’s just a matter of luck and the erosion of principle.

The first argument of distinction between our country and the one that Hugo Chavez ruined is that we’re wealthier, and in a broader way. But that just means we have farther to fall, which could mean more time or it could only necessitate a bigger mess up… say a decade of quantitative easing and massive federal debt combined with a regulatory state that makes it more difficult for people to work off the extra burdens and a welfare state that promises to buy them off if dependence on government is an option they’re willing to entertain.

A second argument, related to the fact that we have more wealth and room to fall, is that we have a culture of self-reliance and rebelliousness. Well, we’re arguably engaged in an experiment to discover how few generations it takes to get out of the habit of self-reliance. And as for rebelliousness, that’s well and good to talk about and believe in, but the proof is in the doing.

Ultimately, if it can’t happen here, we better get to proving it soon.

 

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Ray Mathieu: Not Too Late to Default on 38 Studios and Force Investigations

Taxpayers are and should be outraged not only at the final “findings”, or rather lack of findings, resulting from the conclusion of the multi-year investigation of the 38 Studios fiasco, but also at the lack of transparency surrounding the investigation. Based upon what professional bond investment managers have told me, I have stated repeatedly since long before the first bond payment was ever made that the only way to have a thoroughly independent, full-blown professional investigation would be to default on the bond payments, thereby forcing the bond insurance companies, who would wind up paying these bonds, to perform their own deep investigation.

Of course, The Powers That Be did not want that, for fear of the real truth coming out, so they used the fear mongering excuse that the state’s bond rating would be adversely affected if we defaulted on the bonds. While, as I’ve been advised, it may be true that the rating of moral obligation bonds like the 38 Studios bonds, which are not backed by the full faith and credit of the State and, therefore, do not carry a low tax-exempt interest rate but rather a much higher and fully taxable interest rate, may be adversely affected, we should not be issuing anymore of these moral obligation bonds anyway. Such bonds are approved by the legislature so the debt can be issued without requiring voter approval. Needless to say, after the result of the 38 Studio investment, the practice of issuing bonds without voter approval should be curtailed permanently.

As I have been also advised, the ratings of the state’s general obligation bonds may also be affected by a default on the 38 Studios moral obligation bonds, even though general obligations require voter approval and are backed by the full faith and credit of the state. Even so, the possible potential increase in the amount of interest the state may have to pay on potential future bonds not even yet issued would be far less than the $90 million we are currently paying on the 38 Studios bonds, and the state would have avoided what now appears to be a cover up.

If the governor and state treasurer had stepped up and done the smart thing by defaulting on the bond payments initially, the taxpayers could have saved tens of millions of dollars and would have had the results of a professional insurance investigation made public years ago.

It is still not too late to default on the remaining 38 Studios bond payments and, thereby, force the bond insurers to give us the full investigation the taxpayers deserve and reduce the cost of this fiasco to the taxpayers.

 

Ray Matheiu is an independent candidate for RI state representative in district 1.

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Who Paid Whom for Notable Activity in RI?

A headline that just hit the Providence Journal Web site may (unwittingly) capture with perfection the progressive, Brookings, CommerceRI, Gina Raimondo approach to economic development:

Makers of “The Polka King” paid $3,000 to use R.I. State House

You have to read the article to find out who paid whom, because while one would expect a for-profit enterprise to pay for the use of some public resource, under the progressive, Brookings, CommerceRI, Gina Raimondo approach to economic development, the public very often pays for-profit enterprises to do something that makes it look like the government is actually fostering a healthy economy.

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Jobs in RI: Even a Drip Will Eventually Fill the Sink

Another jobs report, another opportunity to brace yourself for government spin.  I’ll put up my regular employment post tomorrow and a new Jobs & Opportunity Index (JOI) post on RIFreedom on Monday, but with tweets like this those from Patrick Anderson and Ted Nesi, a separate point is worth making.  Here’s Nesi’s tweet:

RI payrolls are now above 490,000 for the first time since 2007, per DLT. Unemployment rate steady at 5.5%.

For the record, payrolls were over 490,000 in March, which may seem like being nitpickety, but not if anybody’s making a point worth making.  If the idea that crossing 490,000 is some kind of milestone, then we should admit that it’s taken a long, long time to get there.  And to pre-address spin that we might see from Democrat Governor Gina Raimondo’s office, she deserves almost no credit… maybe the opposite of credit.  Growth has slowed.

Jobs based in Rhode Island hit bottom in July 2009, at 455,900.  The seven years to this July’s 490,900 puts the compound annual growth rate (CAGR; the average annual increase) at 1.06%.  That’s not anything to write home about.

Making matters worse, if we look at just the year for which our current governor might credit her policies, the growth rate appears to be slowing.  It was 1.03% from July 2015 to last month.

So, yes, any growth at all will eventually hit any particular height.  We should remember, too, that 490,000 is arbitrary.  If we should pick the peak number of jobs that Rhode Island had in December 2006, 495,700, we still have a year or so to go.  It’s a good thing we’re not overdue for another recession.

Oh, wait…

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In the Darkness Beyond the Footlights

This Richard Fernandez essay would be worth a read if only for the historical analogy:

… Florence Foster Jenkins was a Pennsylvania socialite who aspired to be a diva. The trouble was she couldn’t sing a note. “From her recordings it is apparent that Jenkins had little sense of pitch or rhythm, and was barely capable of sustaining a note. Her accompanist, Cosmé McMoon, can be heard making adjustments to compensate for her tempo variations and rhythmic mistakes. Unfortunately, there was nothing McMoon could do to help conceal the glaring inaccuracy of Jenkins’ intonation: the notes she sang were consistently flat and their pitch deviated from the sheet music by as much as a semitone. Her dubious diction, especially in foreign languages, is also noteworthy. Additionally, the technically challenging songs she performed, requiring levels of musical skill far beyond her ability and vocal range, served only to emphasize these deficiencies.”

The key part is that Jenkins’s friends covered for her, forbidding objective critics from entering her shows and deploying such Obama-esque spin phrases as lauding her “intentionally ambiguous” technique.  Fernandez even supplies an audio clip to capture what sound the phrase was intended to describe.

Readers won’t be surprised that I agree with Fernandez’s application of this analogy to President Obama and the mess that he has made of the world.  To the extent that the question remains whether Obama is incompetent or bumbling for some ulterior purpose, the best spin available might be that his performance is “intentionally inadequate.”

Still, the most intriguing part of the comparison with Jenkins is Fernandez’s suggestion that our elites in government and the media “can’t see the audience in the darkness beyond the footlights heading for the exits.”  That captures the feedback problem we have when the elites who want to spin reality have thorough control over so much of the country’s education and information systems.  Those of us wincing at the sound from the stage have no way of knowing, really, whether the audience is going along with the con or is preparing to throw rotten vegetables at the stage.

The unexpectedly successful candidacy of Donald Trump gives some indication, but without making clear whether people are accurately associating their headaches with the noise from the stage or are merely lashing out, knowing not at what.

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Rhode Island Admits Its Diplomas Are Meaningless

Articles on Rhode Island’s education system have become downright depressing.  Here’s Education Commissioner Ken Wagner essentially admitting that his office sees diplomas from the state’s public schools as meaningless pieces of paper designating satisfactory attendance:

Wagner, who arrived here a year ago, defended his decision to drop a standardized test from the high school graduation requirements. He said it doesn’t make sense to punish students for poor test scores when “it is just as likely that they weren’t adequately prepared” by their schools and teachers.

“When kids don’t graduate, it has lifelong consequences,” he said. 

Wagner wants to hold school districts, not students , accountable for improving student achievement….

Starting in 2021, Rhode Island will offer a “commissioner’s seal” for high school students who meet proficiency on a standardized test like the Partnership for Assessment of Readiness for Colleges and Career. Instead of evaluating districts based on student test scores, the state Department of Education could judge districts based on the percentage of graduates who earn a commissioner’s seal.

Wagner’s thinking is all wrong.  Rhode Island Association of School Committees Director Tim Duffy is right that “we’re not doing students any favors by not preparing them for college or work,” but it’s more than that.  A diploma is supposed to be an achievement, not a participation trophy.  We’re supposed to hold students accountable, and moreover, they ought to be the first link in a chain of accountability:

  • If students aren’t succeeding, parents are responsible for resolving whatever problems are getting in their way.
  • If parents conclude that the school is the problem, then they hold the school accountable by seeking correction or leaving.
  • If the schools aren’t performing, then it’s the responsibility of the community that pays the bills to hold elected officials and administrators accountable.

The Dept. of Education’s role should be to facilitate this process, not to supplant it.  Otherwise, the state government is presuming to take on the role not only of every school’s administration, but also the roles of parents and of voters.  The childless commissioner’s apparent fondness for calling children who are students in pubic schools “kids” is not a good sign for the department’s perspective on those young Rhode Islanders.  (“A kid’ll eat ivy, too,” after all.)

The ideal reform would be to empower students and parents to hold districts accountable more directly, but allowing them to apply money that would otherwise to go the district to an alternative, like a private school. Until that option becomes feasible, though, the incentive for parents and students to complain has to be stronger.

The bottom line on Wagner’s ploy is that the people who are the most insulated from accountability — the unionized teachers — have a controlling hand in the state government.  The state, therefore, cannot be trusted to “judge districts” and take appropriate action.

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A Culture Of Silence In The Ocean State

In America, we must all remain free to voice our opinions without fear of state-sponsored persecution. It is reprehensible for any political elitists to collude to prosecute those who disagree with them on policy. For this reason, the Center is assisting a national nonprofit organization in a lawsuit demanding that the Rhode Island Office of the Attorney General release documents they have refused to make public. We believe that General Kilmartin, and his fellow enemies of debate, are seeking to maintain a cloak of invisibility over the national AG group’s attempt to crush dissent by those who disagree with their radical climate change agenda.

In June, the Center published an energy report that demonstrated how oppressive state renewable energy mandates, as part of the national climate change agenda, will cost taxpayers and ratepayers hundreds of millions of dollars. These mandates will cause job losses in the thousands, and artificially raise local electricity rates. It is research and advocacy such as this that Kilmartin and his AG group are seeking to muzzle and potentially prosecute as criminal. No matter where you stand in the climate change debate, citizens must have the right to speak freely.

This culture of silence in the Ocean State is chilling. Why do so many elected officials and prominent people want you to be quiet? The rigged system protects the corrupt insiders. As we saw in the recent 38 Studios political whitewash, the machine will do what it takes to keep you from knowing the truth. Rhode Islanders want a government that works for everyone not just the chosen few. Things do not have to be this way in our state. We can have an open state government that serves the real needs of our families, and protects our freedom to achieve our dreams.

Elected officials saying things are getting better in Rhode Island is not enough, they must take action. We need action. Unless the Ocean State adopts the proven free market reforms that can transform our state, we will continue to see the negative trends continue. You can change the status quo. You must not allow anyone to silence you. By speaking out on the issues that affect your family, you can make a powerful statement to the insiders that you have had enough. Now is the time to be bold, and have our public policy culture make a complete turnaround.

[Mike Stenhouse is the CEO of the Rhode Island Center for Freedom and Prosperity.]

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