02/20/13 – Economic Development Presentation, State House


1:38 p.m.
There’s a surprisingly high media attendance at what initially looked to be a generic “sustainable communities” meeting of the HUD Sustainable Communities Regional Planning Grant Rhode Island Consortium. The meeting was initially scheduled for the DEM building, as I recall, but they moved it to the State Room in the State House. That was an unfortunate move, because the acoustics in here are really terrible.

1:43 p.m.
The reason this meeting became a big deal, I suppose, is that Fourth Economy will be presenting the initial component of its study of business climate in Rhode Island. I don’t think that’s the major story, but the major story will take months or years to develop (yes, that’s a tease).

1:43 p.m.
Danielle Bergstrom introduces her organization, PolicyLink, which is acting under a direct grant from the U.S. Dept. of Housing and Urban Development (HUD) to handle the “equity” piece of the grants that the federal government handed out to smaller-scale governments and groups.

Danielle Bergstrom

1:45 p.m.
Victor Rubin of PolicyLink is going over the idea of an “equity driven” economy. That’s necessary, he says, because in the future, a majority of Americans will have darker skin, which he says is relevant somehow.

Victor Rubin

1:48 p.m.
Rubin says the “racial generation gap” is particularly notable, as older folks become more white and young folks more non-white. This has implications for “the nature and the quality of the community.” In 1980, there was a 7 percentage point gap between the percentage of young people and senior citizens who are POCs (people of color); in 2010, it was 28 percentage points.

1:50 p.m.
He says RI’s GDP kept up with the national rate, but employment didn’t. Moreover, most of our losses were in the middle-skill range, which shouldn’t be a surprise to anybody who’s paid attention to what I’ve been saying for the better part of a decade: that it’s productive-class folks seeking to be upwardly mobile who have been leaving.

1:53 p.m.
“The economy doesn’t treat people of different races and genders equally.” (I’m not sure whether Keynesian or Austrian economics is more racist. But I have often wondered whether particle physics is a force for bigotry in the universe.)

1:57 p.m.
Rubin says that equity requires us to start by asking ourselves what minority entrepreneurs need… as opposed to just making it easy to do business and interact with each other in the state.

2:00 p.m.
Now Fourth Economy is up. Their study focused on various areas of economic development. First was a business climate analysis: a lot of rankings “don’t speak well” to Rhode Island.

CEO Rich Overmeyer emphasizes that they looked more deeply into the rankings than the top-line number, to see where RI actually is doing poorly. (Incidentally, that’s what the request for proposals asked for… essentially looking for ways to change the rankings without adjusting the priorities of the governing class.)

Rich Overmeyer

2:04 p.m.
I’m still not sure why the state hired another group for tens of thousands of dollars to conduct a study of the same-old data.

2:06 p.m.
Overmeyer emphasizes that “sustainable” in their context includes community measures, not just “green” stuff.

RI performs better (middle of the pack) in diversity measures, especially business ownership. (But his slides are like the lower lines on a doctor’s eye chart. Maybe some of the money that taxpayers fork over for these studies and presentations should go to training on PowerPoint.)

2:09 p.m.
He says RI does alright on access to capital at later stages of business development, but not at the earlier, more-start-up level.

2:13 p.m.
Britt Page, of the eponymous consulting firm that Fourth Economy hired for help, who is speaking from the table because she’s on crutches, is offering a recitation of the sorts of businesses in the Ocean State.

Britt Page

She mentions “artificial skin.” No plug for the more-brains industry for which the Providence Chamber has been advocating.

2:18 p.m.
Overmeyer says RI has a lot of “smart people” looking into growing the RI economy, and “we need to come together” and come up with a coordinated plan.

It’s amazing to me that all of these discussions begin with the assumption that a technocratic ruling class can centrally plan a successful economy. Overmeyer keeps referring to a “grow your own” approach to economic development, or “economic gardening”; it’s curious that autonomous people acting to provide for their families and advance their careers are presented, in that analogy, as plants to be grown by a gardener applying fertilizer and water.

2:21 p.m.
Governor Chafee says that we just have to “accept” that we’re going to be a majority non-white society. (You know, I don’t think I’ve heard anybody within the past decade object to that as a concept or rebel against it.)

Chafee emphasizes that the people around the table are “planners,” which makes RI a “little bit unique” in how we’re going about economic development.

2:23 p.m.
One of the consortium members, Scott Wolf, is saying that our sales tax burden is actually pretty modest, claiming that it’s an “urban legend” that RI has high sales taxes. (Sadly, it’s pretty clear that the high tax rate, legend or not, has an effect on where people shop.)

Scott Wolf

2:27 p.m.
Another member is mildly objecting to a Fourth Economy suggestion that RI does alright with affordable housing, saying that it’s a bifurcated market, with newer homes that are unaffordable and older homes that may be affordable, but aren’t really desirable.

2:30 p.m.
Another member, Jeanne Boyle, says she’s concerned that the racial generation gap will present problems with education, going forward, as older white people with higher property taxes object to paying ever-growing prices to educate non-white children.

Jeanne Boyle

The next member to speak says that the number of white people in this room illustrates the problem that a number of “voices” are being missed.

(Why is everything racial, with the types of “planners” who end up in these sorts of seats?)

2:36 p.m.
Applause for governor as he makes his exit and the group goes forward with its meeting.

2:39 p.m.
Housekeeping type issues filling in the last of the meeting. No comments from the public.

  • Bob Washburn

    What a bunch of socialist nonsense from these people. Businesses are started and grown by individuals not state-oriented committees like the above. I hope no one in state government is actually paying these people anything.

  • mangeek

    "with newer homes that are unaffordable and older homes that may be affordable, but aren’t really desirable."

    This should have been our plan all along. As soon as the economy started tanking and housing started deleveraging, Rhode Island should have set up loan programs to:

    1. Let folks take out non-recourse loans that put them right-side-up on their homes.
    2. Low-interest loans to modernize homes, remove asbestos, update to code, and beautify.
    3. Divert money from ridiculous 'low income' housing projects to demolishing triple-deckers that need more investment than they're worth, replacing them with small homes like this: http://swinburnearchitect.com/wordpress/?p=424
    4. Confer with towns to unify as much as possible of the permitting process, and then remove redundancies in statutes and personnel.

  • Gary Sasse

    Markets and demand drive economic development not sociology.

  • helen

    Justin Katz,thank you so much for providing this information. It's shocking to say the least,but thanks to you it's available for us to know..

    Gary Sasse,right on! You have summed it up so succinctly.

    Mangeek,agree about modernizing,I think a lot of the old triple deckers should go the way of the dodo,yet those small homes you reference don't really look much different. They would probably be modern versions of old standards that are not built with the quality materials and craftsmanship of the old versions. Plus they are not beautiful or innovative.

  • lots of plans …..lots of talk….meanwhile there's a thousand ideas out there waiting to be financed at 5000 to 10000….i dont want the government doing the financing I just want them not to impede investment through lengthy registration and licensing/ permitting. The government can help by eliminating up front fees for new businesses and instead collecting them at year end or scaling them by relationship to revenues. If the government was not in the way that would free up more private sector investment and create more jobs. The first few dollars of a start up are precious. The first years are a struggle.So get out of the way and encourage start-ups. Then we can develop a more sustainable , profitable environment where the government can then begin to lightly tax businesses.