Economic Development in Our Corporatist Progressive Paradise


News is out that General Electric has deigned to put an office in Providence, and Rhode Islanders should take the opportunity to give some real thought to how we’re letting our society be governed.  Via Ted Nesi’s Twitter stream, for example, comes this take from the Boston Globe:

Rhode Island Governor Gina Raimondo didn’t win the high-stakes battle for General Electric’s corporate headquarters, but she’s coming away with a nice consolation prize.

Raimondo’s office Thursday said the industrial conglomerate would open a GE Digital information technology center in Providence. GE expects to employ 100 people in the near term, with a goal of adding many more over the next several years, state officials said.

Ian Donnis reports that the cost to Rhode Islanders (at least initially) is $5.65 million over 10 years.   So, government officials take our money in order to win consolation prizes from major corporations.  Who, exactly, is in the driver’s seat, here?

The difficulty in assessing this deal is that we can’t just go the way of of RI Commerce Czar Stefan Pryor and assume that income taxes and other benefits from the prize will be a larger sum than the gift.  We also have to imagine counterfactuals.

What if we stopped allowing government to be the dictatorial governing board of all of our lives, and our economy, and made our state the kind of places that individuals and organizations heard about and said, “I want to live there”?  The cost might be higher… for special interests, anyway… but we’d be living in a dynamic community that isn’t dependent on the good graces of large companies able to make deals with politicians.

  • Mike678

    “who is in the Driver’s seat..” Obviously, the corporations. When your business environment is as uncompetitive as RI’s, the elites have to offset the costs of doing business to even get an offer. And the corporations know how desperate these people are to have any movement–and both get us to pay for it to maintain the staus quo.

    The WSJ had a good piece on crony capitalism earlier this week and how to avoid it. That said, we’d havea hard time implementing their solutions (lower taxes, lower utility costs, i.e., make the environment liveable) but that goes against the RI politician’s “they need to kiss my ring and maintain union largess” doctrtine.

  • oceanstater

    Who is in the drivers seat? Corporations. Even relatively prosperous states (e.g. MA for GE, TN for VW etc) give away the store to corporations who have learned to evade taxes and responsibilities by playing all the states off against each other, and now they can do that internationally thanks to the way they write the laws.
    If RI doesn’t play the game we lose. The only solution is for all the states to mutually agree to prevent special deals, but as the dynamic of the well known “Tragedy of the Commons” states, that will reward a state that is first to break any such compact.
    Its entirely non-partisan, states with Governors/Assemblies of both parties do the special deals.
    So we have to get used to it.

    • OceanStateCurrent

      I disagree. The other option is to reduce taxes and regulations so that (1) it’s attractive for businesses to come here, in the first place, and (2) if they don’t, new businesses have a competitive advantage by doing so.

      Every strategy that winds up with giveaways starts with the prerequisite that government’s controlling hand is the basic organizing principle of our community.

      • Mike678

        Improving the business climate also makes RI more attractive to a broader business audience–small and large. That’s how you get growth–not the onsey-twosey approach the GA seems to prefer.