The Wrong Way to Economic Development

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Ed Fitzpatrick’s review of opinions about Democrat Governor Gina Raimondo’s first year in office is pretty much what one would expect.  Insiders tend to like her (with an asterisk for pension reform), her political opposition does not, and centrists who focus on areas in which she’s left reason for worry are worried.  It says a great deal that, when listing her accomplishments for the year, the governor promotes a settlement that actually reduced the effectiveness of the 2011 pension reform that brought her national fame.

When a legal settlement that failed to answer the critical question of pensions’ legal standing while costing taxpayers $1.3 billion over the next couple of decades is one of your big successes, folks would be justified in thinking there must not be much else to tout.

The economic development promotions are the most objectionable, though, inasmuch as they follow a path based on insider connections and faith in those insiders to pick winners and tell people what to do, economically:

Raimondo said she has tried to change the overall business climate by, for example, eliminating the sales tax on commercial energy use. “But separately you need an active, pro-active economic development team, which Rhode Island has lacked for a long time,” she said. “And the tax incentives that the legislature passed are just basic tools in our tool box that pretty much every other state has.” Boston used tax incentives to bring life-science firms to the South Street Seaport, and now that area enjoys critical mass, she said. In Rhode Island, “those first few deals   — real estate deals or company deals — they will be expensive, they will take tax incentives,” she said. “But that is the position we are in.”

Representative Patricia Morgan (R, Coventry, Warwick, West Warwick) is right when she tells Fitzpatrick that “we shouldn’t have to pay people to come to Rhode Island.”  Not only is that the right answer on principle, but (I’d argue) it accords with the real problems that the evidence suggests Rhode Island has.

For another reason, this morning, I reviewed some of my previous writing on Rhode Island’s economic woes, including a four-post series from early this year (one, two, three, and four).  The biggest span of broken rungs on the Ocean State’s economic ladder isn’t job creation through new businesses, but in job maintenance as businesses become established.  The data takes interpretation, to be sure, but the problem appears to come when businesses start to really establish themselves and discover they can’t overcome our regulatory and tax obstacles.

Picking favorites among who’s here or bringing in big players from out of state who are interdependent with state government — with the businesses reliant on government subsidies and the government politically dependent on the businesses’ continuation — merely solidifies the role of elites making centralized decisions that are more and more difficult for innovators and hard workers to get around.



  • ShannonEntropy

    ‘Air·Head’ Ed Fitzpatrick is the embodiment of the concept of “useful idiots” … but he’s just trying to hold on to his job. The Pro·Jo took an even sharper turn Left when Whore·house Gatehouse Media bought the rag and put Janet Hasson at the helm. I am actually shocked that they still occasionally publish pieces by you ,, Justin

    As for Gina …. a huge problem we have here in Li’l Rhody is letting governors get elected with a plurality of the vote. In 2010 Whack-job Bob Healey got more votes for Lt-governor than Linc Chaffe did for governor … but Bob went away while we were stuck with Linc’s antics for four loooong yrs after he hauled in a whole 36 % of the vote

    Then Gina did it *again* … with her “landslide” 40.7 % of the vote. When 3 or 4 out of 5 voters voted against the “winner” something is seriously wrong. If a run-off had been held in ’14 virtually every one of Bob Healey’s Moderate Party voters would have joined Fung’s Repub votes … and the result would have much more accurately reflected the will of the people

    *sigh!* … But nothing ever gets better in this State … so I won’t hold my breath waiting for this to change either :^(

  • Ed Major

    You stated this:
    When a legal settlement that failed to answer the critical question of pensions’ legal standing while costing taxpayers
    $1.3 billion over the next couple of decades is one of your big
    successes, folks would be justified in thinking there must not be much
    else to tout.

    First of all, RIRSA 2011 was unconstitutional and the recently passed July SA 2015 just hid a bad law or why would you need a Settlement Agreement in the first place? If law was legal, you would not have had to touch it, would you?

    Second Raimondo lied saying it would save 4 billion in 25 years. It saved nothing. The state pension lost LOST 2 BILLION IN LESS THAN 2 YEARS …and on this same path under Magaziner refusing to break the 10 year hedgefund terms thus continuing the significant bleeding of a million dollars a day–the pension will lose another 2 billion which means the ex fiduciary fraud and her clone will have wiped out that $4B savings in less than 8 years. Again the GA, the judiciary led by Taft-Carter &Enforcer, Frank the “Intimidator” Williams, and cemented with the Dingley -Chiefy duo going to retiree and pension meetings coercing the pensioners to accept the SA by browbeating them with Chiefy’s course & vulgar language to them, the fix was in… No way was TC going to allow the pension to change…too much malfeasance by the greedy GA members over the years…it was their private piggy bank and now Raimondo turned it over to her Wall St-hedgefund investor friends in payment for securing her the election.
    Morgan is right about not paying people to come to RI. ISn;t 38 Studios enough of a lesson for people? Yet they keep putting back in their reps and senators? Why? Why are voters against voting for someone new? Why are they afraid of pushing that Republican person? What could a Republican do to you that the Democrat has not already done to you? You have been ripped off and your taxpayer dollar looted from you…And you need run iff elections…Getting 39-40% of the vote should not be enough to get a person elected. There needs to be the over 50% vote to elect anyone in this state to political office. When the voter starts to smarten up, only then will you see change…They can control who gets in and who gets thrown out.. Voters need to be educated to the issues-not vote the same way your friends and family voted for years…Vote out of the box…Raimondo never should have been governor…now the taxpayers are paying for every one of her polarizing proposals to which the Yale Yahoo has had no success but utter failure in every one of her revenue projections-from the pension fiasco to the stadium debacle to the truck toll mess and her secrecy as to how much and where the tolls will be—to all the issues in between..every issue she touches turns to lead except giving jobs w/ significant raises to her Administration staff and Cabinet people.And now she needs to reward Sabitoni and private sector construction workers. The

  • Dee Ploma

    You stated this in article:
    When a legal settlement that failed to answer the critical question of pensions’ legal standing while costing taxpayers
    $1.3 billion over the next couple of decades is one of your big
    successes, folks would be justified in thinking there must not be much else to tout.

    First of all, RIRSA 2011 was unconstitutional and the recently passed July SA 2015 just hid a bad law or why would you need a Settlement Agreement in the first place? If law was legal, you would not have had to touch it,
    would you?

    Second Raimondo lied saying it would save 4 billion in
    25 years. It saved nothing. The state pension lost LOST 2 BILLION IN
    LESS THAN 2 YEARS …and on this same path under Magaziner refusing to
    break the 10 year hedgefund terms thus continuing the significant
    bleeding of a million dollars a day–the pension will lose another 2
    billion which means the ex fiduciary fraud and her clone will have wiped out that $4B savings in less than 8 years. Again the GA, the judiciary led by Taft-Carter &Enforcer, Frank the “Intimidator” Williams, and cemented with the Dingley -Chiefy duo going to retiree and pension meetings coercing the pensioners to accept the SA by browbeating them with Chiefy’s course & vulgar language to them, the fix was in… No way was TC going to allow the pension to change…too much malfeasance by the greedy GA members over the years…it was their private piggy bank and now Raimondo turned it over to her Wall St-hedgefund investor friends in payment for securing her the election.
    Morgan is right about not paying people to come to RI. Isn’t The International Institute for Sport -the URI scam where millions are still unaccounted for (never investigated by AG Kilmartin) and 38 Studios (which AG Kilmartin was a part of as GA member) enough of an expensive lesson for people? Yet they keep putting back in their same corrupt, “look the other way”reps & senators? Why? Why are voters against voting for someone new? Why are
    they afraid of pushing that Republican person? What could a Republican do to you that the self serving greedy Democrat has not already done to you? You have been ripped off, bamboozled and your taxpayer dollars looted from you..Stop this way that RI does business.Change it.

    You need run-off elections. This needs to get passed by the GA Tell your reps and sen to pass it..Getting 39-40% of the vote should not be enough to get a person elected. There needs to be the over 50% vote to elect anyone in this state to political office. When the voter starts to smarten up, only then will you see change…They can control who gets in and who gets thrown out.. Voters need to be educated to the issues-not vote the same way your friends and family voted for years…
    Vote out of the box.Raimondo never should have been governor… now the taxpayers are paying for every one of her polarizing proposals to which the Yale Yahoo has had no success but utter failure in every one of her revenue projections-from the pension fiasco to the stadium debacle to the truck toll mess and her secrecy as to how much and where the tolls will be—to all the issues in between..every issue she touches turns to lead
    except giving jobs w/ significant raises to her Administration staff
    and Cabinet people.And now she needs to reward Sabitoni and private sector construction workers. The private sector and the Wall St sector are the ones profiting by her Administration…not the middle class and certainly not the pensioners who need to vote out the retiree reps since they are in bed with the Yale yahoo combo-Raimondo/Magaziner…Vote in Matisewski, the last name on the ERSRI ballot. Vote in fresh blood–one who wil look out for you and not throw you under the bus as the Retirement people have done for years-just agreeing and complying to Raimondo.They need to be thrown out. Now you have a ballot to do it.

    • ShannonEntropy

      Thanks for that well-spoken opinion ,, Walter !!

      If I could vote in that ERSRI thing I would definitely vote for you … early & often … in the traditional Rhodent Way

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