The Economic Instability of Too Much Government


I almost added this quotation from a recent Hummel Report to my post Saturday about Hodges Badge’s pulling manufacturing from Rhode Island:

A plan to redevelop a section of the city from Providence Place mall to Olneyville along the Woonasquatucket River has run into a riptide of opposition from business owners who see it as a stealth attempt to seize their properties.“This is an industrial area,” said Lemus, who came to Rhode Island from El Salvador in 1980 at age 11. “They call it blight, but we call it an industrial area. They want to make it mixed-use, residential; they want to have people walking, bicycling the street. But it wasn’t designed for that, it was designed to conduct business.”

Lemus said he and his brother spent four years making improvements to their property after they bought it — with no taxpayer help. “There is no tax stabilization, no tax breaks, there’s no money pulled out from any place in the city. We don’t owe anybody anything.”

This is a toxic combination for businesses:  the sense that others are getting special deals and the knowledge that state and local governments can come in at any time, following a questionable process, and change the rules around everything in which you’ve invested your life.  In those circumstances, fewer people will take risks and work to build dreams in Rhode Island, either because they’ll go elsewhere or simply conclude that they’re better off going along to get along.

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In settling on the ideal economy, there is a balance to be struck between individual freedom and government-supported predictability, but too much government brings its own instability as somebody other than the invested individuals makes decisions according to their own ideology or interests.

  • Rhett Hardwick

    As to the Providence problem. Doesn’t that include Promenade Street? That suggests a non industrial use in the past, when people would “promenade” on a Sunday afternoon.

    “state and local governments can come in at any time, following a questionable process, and change the rules”

    I have some inherited property, just over the line in Massachusetts. Over the years there have been various takings, Route 95, Power lines, city streets, etc. The small parcel which I mention is bordered on three sides(it is triangular) by takings. This was pasture land as I recall from being a kid. Now, because of government action, storm water drains, drainage from Route 95, redirected rivers, failure to clear culverts, etc., it is “wetlands”. Actually, it is “bordering wetlands” (the 100 “buffer zone” around wetlands. ) Of the 3/4 acre, 150 sq ft. are not in “wetlands” and cannot be built upon without the “let” of the government. Because of the river redirected through the drainage ditch for Route 95, they even tried to pull the “Rivers Act” on me (that means a 200 ft buffer, and tougher standards ) I was able to find an obscure decision that a “canal” is not a river, and directing a river through a canal does not make the canal a river. Without that finding , it would have been hopeless. So, it is now “buildable”, so long as I put a split rail fence along the “bordering wetlands” lines.

    In short, it cost me almost $8,000 (engineers, excavators, filing fees, etc.). What if they had succeeded with the “Rivers Act”. Why would this have not been a “taking”?
    PS. All of the Storm drains and other activities were created before 1978, the year of the Wetlands Act, so, they are “nature”:.