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31

A Fishy, Misnamed State Bank

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The more I read about this “Rhode Island Infrastructure Bank” being proposed by Governor Gina Raimondo and General Treasurer Seth Magaziner, the worse the idea sounds:

As they envision it, $22 million or so in state tax dollars, left-over federal stimulus dollars and bond proceeds would be funneled to the cities and towns for energy-cutting projects, such as these, through the renamed Rhode Island Clean Water Finance Agency, created in 1990 to provide loans for improvements to sewage and drinking water systems.

So, this will be new municipal debt without, it seems, voter approval.

… the legislation would also salt away an unspecified amount of state money away in “one or more” loan-loss reserve funds to encourage private banks to lend money to private homeowners and businesses for similar kinds of energy-saving building upgrades. The legislation does not say how much.

So, the public would absorb the risk for projects financed by private companies for private entities and individuals.

When asked why National Grid was among those backing legislation that could cut into its revenues by reducing energy use, company vice president Michael Ryan said the answer lies in an earlier “decoupling” law guaranteeing National Grid a “bump” in its rates if usage drops, as a result of energy-efficiency efforts.

So, it won’t actually save Rhode Island money on energy; it’ll simply shift the burden from government agencies and private entities that are able to get the loans onto those who are not.

The answer from treasury staff to many of those questions [about limits to the funds and processes for claiming losses] was this: the “operational details” are not spelled out in the latest, 80-page version of the bill. According to Rogers, details such as these — along with the mechanism for repayment of the loans — would be spelled out, at a future date in “rules and regulations.”

So, the make-or-break details will be out of legislators’ hands.

Robert Boisselle, the lobbyist for the Associated Builders and Contractors of Rhode Island, was among those raising red flags about references in the legislation to “Project Labor Agreements.” Boisselle said such agreements (“illegal in 22 states”) effectively bar non-union shops — with 80 percent of the state’s laborers — from bidding.

So, the prices will be driven up in order to make sure that the money goes directly to union members (and thus filtered back into advocacy and donations for Democrats).

If the whole thing seems risky and even fishy, keep looking, a reader tells me via email.  In an op-ed supporting the bank, Magaziner cites the Connecticut Green Bank as a model.  Look into the Connecticut Green Bank, and you find this:

[Coalition for Green Capital (CGC)] leaders Reed Hundt, and Ken Berlin were involved with the establishment of Connecticut’s green bank from start to finish and remain closely involved with the banks operations.

Internet searches for former FCC Chairman Hundt, now an investment advisor, turn up a lot of overlap with Magaziner’s father, Ira.  More notably, his name turns up in campaign finance reports, with $2,000 in donations to the RI Democratic State Committee in October and $1,000 to Gina Raimondo, last June.

On the other hand, some of us might not need to do that level of digging.  It’s enough to know that we have the worst roads and bridges in the country and the people in charge of the state government want a state “infrastructure” bank that helps governments pay to replace their windows.

35

Hobby Lobby and the Lack of Church-State Separation

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With progressives across the country in a delusional tizzy over the implications of the Supreme Court’s ruling that the federal government (through administrative action) can’t force a company to provide abortifacients (i.e., drugs that kill early-stage human beings in the womb), Jennifer Roback Morse takes a step back and looks at the context in the United States’ current practice of “separation of church and state” (italics in original):

Only after the program was over, did the pattern become fully clear to me: the caller (and the State) will allow the Church to be independent of the State, but only for things they think don’t matter.

We the State, allow you the Church, to have jurisdiction over who gets to receive Communion and Christian burial. That is because we consider those things unimportant.

But we the State, intend to have full authority over everything we consider important, like property settlements and child custody. And, as a matter of fact, if there is anything else we come to believe is important, we will take jurisdiction over that too.

And so here we are, with a relatively favorable ruling from the Supreme Court on the Hobby Lobby case. The Supreme Court has restrained the Administration from imposing upon the Mennonite Hahn family, owners of Conestoga Wood, or the Evangelical Green family, owners of Hobby Lobby, in as catastrophic way as they might have. But the State has certainly not given up its authority over religious institutions and religious people, when they deem the subject matter sufficiently important.

We don’t have separation of church and state, in the United States.  We have a thumb on the scale on behalf of statists and the non-religious, who often look to the government as a moral arbiter.  The government is their mechanism for avoiding the necessity of persuading their neighbors to a different position, which can be hard work.  (One suspects the anti-religion statists think it’s impossible work, inasmuch as they see religious people as constitutionally irrational.)

It’s all legerdemain.  As with progressives’ selective adulation of science, they present their opponents’ morality as derived from subjective, superstitious sources, while their morality derives from simple truths about the universe.

To the extent that they succeed in their use of the government toward (what they see as) moral ends, it’s nothing other than an establishment of religion.

37

RI Center For Freedom & Prosperity: “State Cannot Afford Operation of HealthSourceRI”

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As readers may know, ObamaCare RI, a.k.a., HealthSourceRI (funny that they had to give it a different name), was created via Executive Order by Governor Chafee with federal funds that disappear next year. HealthSourceRI has turned into the consummate bloated, expensive and unnecessary governmental bureaucracy without even accomplishing one of its important claims of increasing […]

38

This Is What State Leadership Looks Like?

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I’ve been trying to figure out if we have any state leadership here in RI. When we have a Governor who gets embroiled in what to call an evergreen adorned in lights in December and a General Assembly who is more concerned about what appetizer they want to endorse, I’m trying to figure out if they have any ability to lead. Apparently, some states have it figured out.

42

Take Hodges Badge Departure as Another Warning Sign

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As Democrat Governor Gina Raimondo spins Rhode Island’s economic numbers and the news media touts her “wooing” of blockchain companies, an article  from the Newport Daily News a couple of weeks ago hasn’t gotten much attention:

Hodges Badge Co. Inc. has made the “difficult decision” to close its Portsmouth plant this November and consolidate production at its Washington, Missouri, facility, according to a company statement.

“Hodges Badge Company Inc. is a 98-year-old family-owned company and we consider each one of our employees as part of our extended family,” according to the statement attributed to Rick Hodges, the company president and CEO. “We greatly appreciate being part of the Portsmouth community and are truly grateful to all the employees who contributed to our success over the past several decades. This is a necessary and critical economic decision that we do not take lightly, and we will be working with each of our employees to provide compensation packages and on-site outplacement services.”

The facility in Portsmouth opened in 1974 and employs around 92 people.  Rhode Island just won’t allow the company to justify keeping those jobs here.

To be sure, that’s not only a tax and regulation issue.  For Hodges Badge, energy played a big role, too:

Despite other business reforms aimed at reducing electricity costs, the plant still consumed 451,000 kilowatts of power for all of 2008 at a cost of $91,000, according to a Daily News article in July 2009. That was twice as much as the company paid to power its Missouri plant.

“I live here and I love it here, but how long can you realistically sustain that?” Rick Hodges said at that time.

Imagine how the current political landscape looks from that perspective.  The governor is touting more crony wind deals; NIMBYism is hindering an effort to increase power production in the state; and schemes to make energy more expensive through carbon taxing are a regular feature of every legislative session and may explode into law any year.

Rick Hodges was vocally against the toll on the Sakonnet River Bridge, and it can’t have been lost on him that tolls are proliferating in the state and could return at any time.  Add in the recent mandatory-sick-leave law and the push for extremely radical “equal pay” legislation.  At some point, business owners must tire of always feeling vulnerable.  Any given legislative session could be the end of their operations for some money grab or progressive identity politics impulse.

43

Universal Basic Income and Our Aspirations

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Once upon a time, folks actually hoped that a universal basic education plus a prosperity-driven increase in free time would draw people toward intellectual pursuits and self improvement.  I’m sure there’s data on such things, but for my purposes, here, let’s just speculate that most folks’ general sense would be that it hasn’t quite worked that way.

In a recent Wall Street Journal op-ed, Dan Nidess asks why we would expect a universal basic income to have a different effect.  Indeed, he suggests that the policy “addresses the material needs of citizens while undermining their aspirations”:

At the heart of a functioning democratic society is a social contract built on the independence and equality of individuals. Casually accepting the mass unemployment of a large part of the country and viewing those people as burdens would undermine this social contract, as millions of Americans become dependent on the government and the taxpaying elite. It would also create a structural division of society that would destroy any pretense of equality.

UBI supporters would counter that their system would free people to pursue self-improvement and to take risks. America’s experience over the past couple of decades suggests that the opposite is more likely. Labor Department data show that at the end of June the U.S. had 6.2 million vacant jobs. Millions of skilled manufacturing and cybersecurity jobs will go unfilled in the coming years.

Notably, Nidess uses the term “productive class,” which I’ve been using for years in attempting to describe what populations have been leaving Rhode Island.  Basically, the Ocean State has been attracting the poor and (largely) holding on to the wealthy while driving out those who are looking for some way to transform their smarts, brawn, and effort into wealth.

Put in those terms, it’s clear that Nidess fears the UBI would bring about a national version of what I’ve called the “government plantation” or “company state,” whereby the government draws in dependents in order to provide services billed to somebody else.  Whatever arguments and motivations may underly such policies, they certainly don’t have the feel of being healthy for our society.

44

The Transformation of Vermont

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Take it as a warning or as an illustration of opportunity, but Rick Holmes’s history, in the Fall River Herald, of Vermont’s political transformation is a worthwhile read.

Basically, the interstate highway system brought “flatlanders” to the state for foliage viewing, skiing, and indulgence in a hippy aesthetic.  By the time the indigenous conservatives tried to push back, it was too late:

“The hippies won,” says John Gregg, a Vermont journalist whose office is a short walk from the Connecticut River. In a small enough place, the influx of new citizens, even in modest numbers, can change a state’s political trajectory.

Rhode Island is different, of course.  Our population is a bit bigger, and the particular flavor of progressivism isn’t hippy socialism as much as insider socialism.  An historically different flavor of immigration brought with it a little more cultural conservatism and a little bit less libertarianism.  Moreover, the “influx of new citizens” affecting Rhode Island isn’t the migration of relatively privileged progressives, but rather the deliberately lured clients for the company state/government plantation.

These differences bring with them unique challenges, but in both places it’s too late for an ordinary political campaign to change things.  Instead, we have to change the local culture, which is no easy task when the people who see the right way forward tend just to leave.

45

What Are City Governments’ Real Priorities?

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Ted Nesi reports (if I may paraphrase) that Rhode Island cities have been crawling over each other to slurp from the sluice some money from the Boston Federal Reserve:

Federal Reserve Bank of Boston President and CEO Eric Rosengren visited Rhode Island on Thursday to award $400,000 grants to three local cities through the bank’s Working Cities Challenge.

The program aims to promote collaboration between local leaders to address socioeconomic challenges. The three Rhode Island winners are Providence, Cranston and Newport. Eight other cities submitted applications but did not win grants, which are funded by public and private contributions, not the Fed. …

Appearing on this week’s Executive Suite, Rosengren said the four-year-old program grew out of research conducted by the Boston Fed that showed efforts to tackle cities’ challenges worked best when leaders from different groups worked together toward a common goal.

Readers may recall that the Boston Fed’s involvement with Lawrence, Massachusetts, under a project in the same program is what kicked off my thinking about the “company state” or “government plantation” model, whereby government services become an area’s core industry, with the revenue coming from other taxpayers or higher levels of government (such as state or federal taxpayers).

With these new grants, we should also put the matter in the context of political structures and incentives.  Here we have cities competing to charm “public and private” outside interests with their proposals.  That is, they’re competing to match the values of the Boston Fed and the people or groups funding the project.  Sure, these “community” projects have local advocates (most often ideological activists, special interests, and other insiders), but ultimately, these projects are things being done to local constituents, not for them.

It’s time we stop seeing money that our governments manage to collect from other sources as money that we’ve somehow received.  It isn’t.  That’s especially true when it’s used for projects that the government wouldn’t otherwise have bothered to do.  It’s money that goes to the sorts of people who know how to get government money and spent in order to shape our society in ways that other people want, not us.

46

Don’t Want “Devastating” Cuts? Don’t Rely on Federal Government.

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It seems that the special interests who rely on federal money for their income in Rhode Island (in and out of state and local government) have been working to keep stories like this in the news every week:

Potential cuts to the National Oceanic and Atmospheric Administration put forward by the Trump administration could have devastating effects in Rhode Island.

The Coastal Resources Management Council, the state agency that oversees development along the state’s 400 miles of coastline, would lose nearly 60 percent of its funding.

This is the problem with the government plantation/company state model.  When you’ve built your economy around the government’s ability to make other people pay for services that the government insists on providing, local taxpayers will move away and people in other states may decide to cut funding.  It’s a risky dead end of an economic development approach.

Our goal as a state (similar to our goal in our cities and towns) should be to react to news of changes at the federal level by expressing relief that we don’t rely on the federal government for much of anything.  That would be a state of both freedom and stability.

47

Never Any Way to Fix Costly Government Programs, Medicaid Edition

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Reporting on a study by a couple of health care experts, Ted Nesi writes on WPRI:

Using 2015 data, their projections showed Rhode Island would lose $514 million in annual federal Medicaid funding under such a formula – a huge amount of money, equal to 22% of the state’s $2.3 billion in total Medicaid spending during the 2014-15 budget year. Massachusetts would lose $3.4 billion under the scenario.

First, let’s have a little perspective, here.  The revised spending on “Medical assistance (including Medicaid)” for fiscal 2015 was $2,382,919,281.  The year before — in fiscal 2014 — it was $1,819,597,682.  If you don’t have a calculator handy, that’s a difference of $563,321,599, or about $50,000,000 more than the “huge amount of money” in the possible reduction.

According to the mainstream calculus, government spending can never go down, even just to the prior year’s level.  On the one hand, we’re told it would be a terrible thing if Congress were to block grant Medicaid based on state income because states that rely on the program as a large part of their budgets would face massive reductions.  As the study says, it “would result in a seismic redistribution of federal spending.”

On the other hand, the authors go on to say, we can’t possibly calculate block grants based on current spending, because that “would lock in large and arguably unfair variation in funding across states.”  The only solution, clearly, is to just keep giving states as much money as they need for however many Medicaid recipients they’re able to sign up.

Folks, this is the government plantation, or company state.  As I wrote when I first began tracing that economic model in Rhode Island, when the state’s major industry (government) relies on its ability to sign up people for services in order to charge other people for them, the people forced to pay the bill will eventually flee the system, if they’re local, or push their own representatives to stop the bleeding, if they’re in other states being soaked by the feds.

Rhode Island should take the opportunity of the Trump Administration to get off this track.  The chasm toward which it leads has no bridge.

48

The Story of Rhode Island in the Trump-Clinton Divide

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The other day, the Providence Journal published an interesting map showing that, much like the country as a whole, Rhode Island’s presidential votes were split by region, with the coastal municipalities’ going to Hillary Clinton and the interior going to Donald Trump.  The image oversimplifies, of course; several cities and towns in the northeast of the state don’t touch the coast, and Charlestown and Tiverton went to Clinton without her winning even half of the vote.

Reporter Paul Edward Parker touch on some of the nuance in the numbers:

Four of the five communities with the highest median household incomes voted for Clinton, as did seven of the eight communities with the lowest incomes.

Essentially, Clinton drew her support from the wealthiest and poorest places, while Trump drew his from the middle.

Laying this out in more detail arguably tells the story of Rhode Island’s current condition in a single chart:

RImuni-clintonvotevsincome

In that red U, we see both the story of the “productive class” and the workings of the “company state.”

Refer back to this 2009 post on Anchor Rising, and you’ll see that the bottom of the U is almost exactly in line with the population that has been leaving Rhode Island throughout this millennium.  As those Rhode Islanders flee the state, those who remain are increasingly part of the “company state” or “government plantations” model, wherein highly paid service providers in and around government have incentive to increase the number of clients requiring subsidized services as a pretense for taking money away from those above the line for subsidies.

This model harms the economy and drives people away because it reduces the incentive and opportunity to work.  The “productive class” is characterized by the economic role of the people who tend to be within it.  It’s the broad class of people whose main function in the economy is to turn their effort and ingenuity into money that they can use to support and advance their families.

This trend is terrible for a state for a multitude of reasons, but two stand out as particularly profound and overarching.  The first is that the “productive class” is the group whose activities are the foundation of a thriving and advancing society.  They are the dynamism and hope for the future.

The second is that the erosion of this tier of the economy as a source of balance eliminates political competition. A loss of political competition will inevitably lead to a political monolith that is not only incapable of correcting itself, but also susceptible to simple, wasteful, and demoralizing corruption.

Those who sympathize with the high points of the U really need to reevaluate the long-term good of their policies.  The rest of us need to redouble our efforts to turn the tide.

49

Start the Clock on UHIP Consequences

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As Ted Nesi reports, the state’s Unified Health Infrastructure Project (UHIP) goes live, today.  Much of the focus has been the cost overruns to get the new software system active — nearing a half-billion dollars if the state gets approval from the federal government for some final additions.  But Rhode Islanders should be disconcerted by the vagueness of the talk:

But in an interview last week, EOHHS Deputy Secretary Jennifer Wood was adamant that the next year of UHIP spending will come nowhere near $124 million. She described the amount as an opening bid in months of discussions with federal and state officials over how many additional tools should be added to the system. …

“This is an all-in, integrated system,” [Deputy Secretary of Administration Wayne] Hannon said. “It includes basically one-stop shopping for anybody who could be eligible for these services in the state of Rhode Island. I believe it’s the first … fully integrated system [in the country].”

That’s Rhode Island: first in the nation for cutting-edge government, even though our experience had been that it mainly cuts into the private sector, families’ independence, and our quality of life.  What we should be asking is what kind of “tools” we’re talking about, here, especially since that cost is nearly what the state initially estimated for the entire project.

The bureaucrats are touting an expected reduction of improper payments, as the state is better able to determine actual eligibility, but the effect is likely to be opposite.  There’s a reason they call it “one-stop shopping.”  The idea is to ensure that nobody misses any benefits for which they’re eligible, even if they don’t know they need them.  It’s part of the “company state” push by governments in blue states to make public services the central industry bolstering an area that has lost its ability to compete in the global market, for whatever reason.

Of course, being on the cutting edge of the next step in government domination means Rhode Islanders will have the privilege of providing data for other states in the future.  So, we’ll have to wait and see whether the welfare roles decrease or increase, just as Medicaid enrollment shot up with the implementation of the health benefits exchange (HealthSource RI).  Naturally, the disclaimer is that the state government will have a variety of methods (and a whole lot of incentive) to obscure the reason for any budget-busting increases.

50

Putting Americans in the Business of Manipulating Government

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Over the past year, I’ve been describing the concept of a “company state” in which Rhode Island’s economy becomes increasingly premised on the expansion of government services (in part by creating or importing new clients for existing services) as leverage to take money from other industries and other states.  That’s not the full extent of the model, though.  After all, private companies in those other industries have to react to changes in the economic landscape.

Boston University School of Law economist James Bessen has done some research finding that, throughout the country, corporations’ profits are increasingly premised on their ability to manipulate government.  Investment in “regulation and lobbying,” he calculates, accounts for around 1.2% of corporations’ increase in profitability, compared with around 1.4% deriving from investment in new capital assets and around 0.25% attributable to research and development.

This development has potential to be disastrous.  For one thing, it changes the nature of businesses.  Beyond having to devote resources to artificial activities that have nothing to do with their core products or services, they must also become adept at intertwining themselves with the government, making that a core activity common across the economy.  The nation’s major industry, in other words, becomes political manipulation.  As this progresses, less and less other stuff that actually grows the economy and improves lives will get done.

For another thing, this sort of institutional cronyism locks out competition.  Smaller companies that must remain nimble can’t afford to be greasing government palms and dodging fabricated obstacles.  Without that competition both for customers and employees, the average American has less leverage as a consumer and as a worker.  Progressives who think they can use government as the people’s voice in these transaction are delusional.

People don’t need elected and appointed nannies to make sure we don’t treat each other unfairly, and it’s simply too obvious to ignore that pretending we do concentrates a great deal of money and power in the hands of a select class.

51

The End Result of a Deliberate De-Education About Our Culture

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Notre Dame Professor Patrick Deneen taps into an area of thinking that I’ve been spotting with more frequency.  To my observation that we have no excuse for repeating errors that have been known for millennia, Deneen might respond (emphasis in original):

Our students’ ignorance is not a failing of the educational system – it is its crowning achievement. Efforts by several generations of philosophers and reformers and public policy experts — whom our students (and most of us) know nothing about — have combined to produce a generation of know-nothings. The pervasive ignorance of our students is not a mere accident or unfortunate but correctible outcome, if only we hire better teachers or tweak the reading lists in high school. It is the consequence of a civilizational commitment to civilizational suicide. The end of history for our students signals the End of History for the West.

During my lifetime, lamentation over student ignorance has been sounded by the likes of E.D. Hirsch, Allan Bloom, Mark Bauerlein and Jay Leno, among many others. But these lamentations have been leavened with the hope that appeal to our and their better angels might reverse the trend (that’s an allusion to Lincoln’s first inaugural address, by the way). E.D. Hirsch even worked up a self-help curriculum, a do-it yourself guide on how to become culturally literate, imbued with the can-do American spirit that cultural defenestration could be reversed by a good reading list in the appendix. Broadly missing is sufficient appreciation that this ignorance is the intended consequence of our educational system, a sign of its robust health and success.

To my suggestion that progressive government is setting up a sort of “company state” in which everything is ordered toward the business model of providing government services and making others pay for them, Deneen would add (emphasis added):

Regardless of major or course of study, the main object of modern education is to sand off remnants of any cultural or historical specificity and identity that might still stick to our students, to make them perfect company men and women for a modern polity and economy that penalizes deep commitments. Efforts first to foster appreciation for “multi-culturalism” signaled a dedication to eviscerate any particular cultural inheritance, while the current fad of “diversity” signals thoroughgoing commitment to de-cultured and relentless homogenization.

Maybe his most important addition, however, is Deneen’s glimmer of hope:

On our best days, I discern their longing and anguish and I know that their innate human desire to know who they are, where they have come from, where they ought to go, and how they ought to live will always reassert itself.

That’s a difficult longing to fulfill.  As Plato noted all those centuries ago, people once deluded in such a way “deem him their worst enemy who tells them the truth,” and powerful forces in our society will give them every opportunity and excuse not to evaluate their sense that something’s missing.

52

Two Paths When Things Go Bad

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As the scarcity of posts in this space illustrates, I’ve been extremely busy, this week.  Things have slowed, but I’m still getting back on track.

One thing I’ve been doing has been to sift through the data available from the Family Prosperity Initiative (FPI).  In summary, the conclusion seems to be inevitable that Rhode Islanders are good people who are just relatively unhappy, with something having happened around 2012 to reinforce that feeling, as suggested by adverse changes in things like new business establishments after that year.  Notably, that was the year that Rhode Island first sank to 48th in the country by the RI Center for Freedom & Prosperity’s Jobs & Opportunity Index (JOI), where it has remained since.

But the broad data from the FPI has some interesting contrast.  Rhode Island does poorly on almost all markers, whether economic or having to do with healthy behavior, with an up-tick around that year in, for example, obesity.  Yet other positive markers also jumped that year, or soon thereafter, including an increase in marriages, a decrease in divorces, an increase in weekly church attendance, and an increase in the percentage of children living in married households.

I wonder if some of these results are an indicator of two distinct paths’ that Rhode Islanders follow.  I’ve long been saying that Rhode Island has been driving out its “productive class“; that is, people at a point in life during which they want to make progress and be productive tend to account for a disproportionate share of the Rhode Islanders parting for elsewhere.  I’ve also been describing the “company state” mentality, whereby the state government pursues policies that increase the number of clients who give it justification for taking money from other people (the producers), in the state and elsewhere.

Maybe what the data shows is that, when a community gets in a funk, some people turn toward things that have traditionally led to stability, meaning, and success (religiosity and family), and other people turn to unhealthy behaviors, like drug use.  This is speculation, at this point, but I’d wager that there’s a strong correlation between these two paths and the other options of leaving the state, on the one hand, or falling into government dependence, on the other.

53

Will RI Be a Frontier When the Federal Empire Recedes

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I’ve been warning about the “company state” dynamic whereby an area’s core industry essentially becomes the provision of government services, with the revenue pulled in from the few productive residents and other cities, towns, and states.  The goal becomes to attract and create as many dependents as possible so as to justify sending a larger bill to those who have no choice but to pay it.  Eventually, though, the productive locals will leave or decide to join the dependent club, and other cities, towns, and states will refuse or no longer be able to cover the bills.

I wonder if that sort of civic and economic structure will set Rhode Island to be akin to the frontier areas as the Roman Empire receded.  Here’s Jakub Grygiel:

In those frontier outposts, the locals have to make difficult decisions based on an assessment of how resilient their empire is, how persistent and dangerous the enemy appears, and how strong their own will is. And they experience different stages of geopolitical grief from denial and delusion to perhaps, in the best case, an attempt at indigenous security provision.

Clearly, Grygiel’s talking about security against invaders, but something similar seems likely to happen when a large class of people rely on handouts that simply cease to be handed out, whether one sees the recipients as a replacement for the invaders or you see them as the villagers failing to prepare to defend themselves against events that will damage or take their resources.  Grygiel describes the stages as follows:

  • “First, there is the gradual recognition that imperial forces were not what they used to be.”
  • “Second, after the reassuring presence of imperial might has vanished, the next stage does not include calls for defense or balancing or stronger walls. No. It is the stage of disbelief and self-delusion.”
  • “Third… the people of Comagenis … recognized that security was a creation of force, not a self-sustaining reality. But even before the technical question of how to defend themselves, the locals needed a reason to do it.”

In some ways, we may already be well into the first stage, perhaps into the second.  Government funds cannot be increased at the rate to which officials have become accustomed.  Some things (roads and pensions) are showing the pressure on the finances, and intra-progressive political battles are beginning to pit special interests against each other.  Next comes the refusal to adjust policies to the obvious future and a desperate search to find any and all sources of new revenue to keep the game going.

When that no longer works, we can expect a fatalism as some sit and stare at the financial wasteland and others refuse to let our society return to the principles of freedom, self control, and self reliance that allowed our society to be so successful in the first place.

54

The Trick Behind the Heartstrings on Ethnic Grievance

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Rhode Islanders need to learn how to translate activist-speak into practical terms so they’ll understand what the advocates who constantly swarm for more money and special privileges are actually requesting.  Consider the latest groundwork-setting for more resources for Rhode Island’s Latino population:

[Anna Cano Morales, director of the Latino Policy Institute at Roger Williams University], who was to unveil a report Monday afternoon that details the state of the Latino workforce in Rhode Island, said education and skills training are the keys to having this ever-growing segment of the population flourish.

While state leaders are concentrating their jobs-development agenda on what employers want, Morales said they should also address what potential workers want, what their skills are and what they need to improve those skills.

The headline of the Providence Journal article is “R.I. Latinos lag their white counterparts,” which allows a fundamental dishonesty into the conversation right from the start.  One can’t really claim a group is “lagging” unless you know its starting point.  If family A has been building itself up within American society for six generations and family B arrived last year, family B isn’t “lagging”; they just started later.

It would be unfair and unjust to use government to take from family A that which its members have earned in order to put family B on the fast track.  Indeed, one can go a step farther and observe that Rhode Island government is creating barriers to family A, leading many such families to flee to other states.

Of course, all people should help each other, and the risk is always there for the “I got mine” attitude that Rhode Island has in surplus.  But a voluntary interaction has different effects on both sides of the equation.  The giver reaps the rewards of voluntary giving, and the receiver has gratitude.  When the government forces the exchange, it breeds resentment on one side and entitlement on the other.

What’s really going on here, though, is my frequent theme of a “company state.”  Government agencies and their private-sector satellites are importing people because they will require their services and create a pretense for forcing somebody else to pay for those services.  Far from being virtuous, that process treats people like objects to be manipulated and harmed in the name of helping.

55

Health Care Also Not the Industry on Which to Build Our Future

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Further to my post from earlier today, refer back to a Paul Edward Parker article from the Providence Journal last week. Noting that manufacturing and health care have more or less flipped places when it comes to number of jobs over the last 25 years, Parker writes:

Two factors figure prominently in the shift, according to Paul Harrington, an economist at Drexel University who has studied Rhode Island’s job market.

Manufacturing could be done other places and cheaper than in Rhode Island, while the manufacturing operations that stayed in Rhode Island switched to automation, getting more done with fewer, highly trained workers.

But health care has to be done where the patients are, and, by and large, robots haven’t taken over the jobs — at least not yet.

Health care — at least its provision and practice, as distinct from the production of its tools — is inherently a secondary industry. It serves people who are growing the economy doing other things. If those people are not present, there is nobody to whom to provide the care, and if they are not doing anything to grow wealth, there is no money to pay for their care.

This is another data point in the running theme that I drew from Lawrence, MA, and the notion that Rhode Island is becoming a “company state” — by which I meant to invoke the much maligned idea of a “company town” in which a single company provides most of the work and, insidiously, essentially owns the local government as a department to manage its employees’ lives. In part because government has destroyed economic incentives, the wealth-generating activities dry up, but those involved in government and its satellite industries (like health care and education) still want to keep their jobs, and (indeed) the demand for public services goes up as people lose work.

This turn of events produces all sorts of perverse incentives. First, perhaps, comes the urge for protectionism, to keep other local industries, other than government, going as much as possible, but undermining the ability of non-insiders to find new directions or innovation in existing industry. While hindering locals’ ability to respond to economic realities, the government also works to distort economic signals that people should consider going elsewhere, where there is work. These joint efforts create a filter that tends to push the most economically motivated residents out while drawing in those who haven’t been able to find work elsewhere. Naturally, because these people require government assistance (i.e., the services that government has decided to provide), government and its satellites don’t much mind the exchange, in the short term.

In the article, Drexel University Economist Paul Harrington sort of chokes on the concept that health care jobs are less desirable, for the local economy, than manufacturing jobs, but the reality is that they can’t be seen as an economy-sustaining industry. Indeed, to the degree that the government forces their growth, health care jobs might veryu well be a sign of impending collapse. Eventually the money dries up.

56

Government’s Unsurprising Preferred Demographic

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Apparently for the first time, Bryant’s Hassenfeld Institute released detailed crosstabs from its most recent public-opinion survey. It’s interesting stuff.

Readers may have seen reports that Governor Gina Raimondo’s toll proposal is under water, with more people opposing it than supporting it. Republicans’ pay-as-you-go alternative is also under water, by even more, but the question may have caused that result with the phrase, “may take longer to repair the roads and bridges.” Given a list of four alternatives for funding infrastructure repairs, voters overwhelmingly support “reallocating state money to pay for the repairs,” 37.2% versus a toll-and-borrow plan’s 21.9%. In fact, people are even less supportive of pay-as-you-go with a truck toll (12.5%).

Particularly interesting, though, is the right-direction/wrong-direction question. Rhode Islanders are notably less optimistic than they were in September, although still a little more optimistic than last April. According to the newly available information in the latest poll, a large part of the “right direction” results come from people under 40 with household income under $25,000.

Tracing those groups through the other questions — especially measured by income — shows they tend to fall on what might be called the pro-government side. They are the least likely, for example, to support reallocating other money to infrastructure. They are the least likely to say “locally elected officials” are doing a “fair/poor” job (although more than half still say it). They give elected state officials the best marks.

When it comes to education reform, those with incomes under $25,000, they are the most likely to say principals need more authority, yet the least likely to say that the system has to “make it easier to deal with under performing teachers. (Perhaps they don’t see principals as the managerial employees who would handle underperforming teachers, but more like head teachers, themselves.) They are also among the least likely to support expanded school choice.

Not surprisingly, those with incomes under $25,000 are also the most likely to say that they are Democrats, as the only income group among which more than half of respondents say they are a member of a particular party.

That sheds some light, I’d say, on the state government’s preference for policies to make ours a “company state,” in which the government imports clients for itself, largely from other countries. It also seems relevant to an approach to economic development that places a premium on, as the Brookings Institution report put it, “coveted Millennials.”

The young and the least wealthy also made up the smallest groups in the Hassenfeld Institute’s survey. Many of the policies that our state government pursues can be explained if we assume that government officials want to change that.

57

Where RI Leads in Foreign-Born Workers

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Pew Charitable Trusts has a still-new interactive tool to investigate estimated “Immigrant Employment by State and Industry.”  Beginning with national numbers, the tool provides the comparative likelihood that immigrants will be employed in a particular industry compared with those born within the United States.

In construction, for example, the national ratio is 1.5, meaning that an immigrant is 1.5 times more likely to be working in construction than somebody born here.  So, if you randomly selected 100 each of foreign-born U.S. workers and U.S.-born U.S. workers, for every two native-born construction workers, there would be three immigrants.  Viewed this way, the data won’t tell us how many immigrants there are in the state or what portion of the workforce they represent, but it does have some interesting lessons, nonetheless.

Compared with the national numbers, Rhode Island stands out in four industries.  In both “agriculture and extraction” and “construction,” Rhode Island has significantly lower immigrant employment than the national figures, which makes sense in agriculture, although not quite so much in construction.

On the other hand, immigrant employment is notably strong in both “administrative services” (which includes, among other things, low-end office-, facilities-, and waste-related services) and “manufacturing.”  Working immigrants are 2.6 times more likely to work in administrative services than U.S.-born Rhode Islanders, versus a national ratio of 1.7, and 2.1 times more likely to work in manufacturing , versus a national ratio of 1.2.

At another layer of analysis, immigrants tend to be more prominent in those industries that constitute more of Rhode Island’s employment than is true for the United States overall.  Of the 13 industry sectors listed, four account for more Rhode Island jobs than is true nationally.  Of those four, RI has a higher immigrant employment ratio than the nation in three.  By contrast, all of the industries that are less significant for employment in Rhode Island than in the country overall lean toward U.S.-born employees.

Manufacturing adds another interesting data point.  Although the industry is more significant for RI employment than national employment (11% to 10% of all employment, respectively), it is less significant for GDP (8% RI versus 12% U.S.).  To some degree, the specific mix of manufacturing in the United States is likely to play a role in that, but it does make one wonder whether manufacturers in Rhode Island are turning to immigrant workers at a greater rate specifically to trim costs and stay in business despite the hostile economic environment.

One final observation: In both Rhode Island and nationally, “public administration” (i.e., government) leans the most toward U.S.-born employees, and although this “industry” accounts for the same amount of employment, in the Ocean State, it accounts for a little bit more of GDP (14% versus 13% nationally).  Combined with the increased prominence of other industries closely associated with government in Rhode Island, such as education and healthcare (also relatively likely to have U.S.-born employees), that would seem to be evidence of my “company state” thesis, with government importing foreign clients for its services.

58

Moving Rhode Island Toward Independence

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With RI Taxpayers’ Larry Girouard wondering “what’s working?” in Rhode Island, I can’t help but turn my eyes toward Maine.  Via the RI Taxpayers’ daily email:

In the fall of 2014, conservative Maine Gov. Paul LePage – who has run on a promise of welfare reform – started new work rules for food-stamp recipients that mandated any adult without children and who’s able to work must do so at least part time, participate in job-training programs or volunteer to receive food stamp benefits.

“We have to make sure that our focus is on food stamps and other welfare programs being a last resort, not a way of life, and that we’re promoting employment,” Mary Mayhew, the commissioner of Maine’s Department of Health and Human Services, tells the Examiner.

Politicians in RI like to make a big deal about the unemployment rate (because it’s so flawed it actually makes it look like Rhode Island has been recovering), but how significant can that statistic be when the number of people on food stamps (or SNAP) remains 100,000 greater than at the start of the recession?  In order for Rhode Island to really find something that works, it’s going to have to resist the urge to become a company state and stop creating barriers to people’s self improvement and fulfillment.

Top down plans to bring in more elites to tell us how to live isn’t going to do it.

59

Acknowledging Multiple Perspectives on Immigration

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Early yesterday, I bookmarked a few things to consider posting, and last night’s atrocity in Paris only made the connections more relevant.  Start with Mark Steyn’s take on the latest GOP presidential debate:

Ted Cruz had a strong night without any breakout moments, unless you count his venture into the immigration debate. It is striking that no moderators want to bring it up. For many Trump supporters, it’s the issue – because, if you don’t have borders, it doesn’t matter having a president or a tax code or a school system or a health-care plan, because they’ll all be overwhelmed. It’s a timelier subject than ever, given the Great Migrations across the Atlantic. Since Chancellor Merkel announced she was abolishing Germany’s borders and embracing all these “Syrian” “refugees”, for example, the country has run out of …diapers? blankets? No, pepper spray. Hmm. …

It is striking that, even in a conservative debate, mass, remorseless, illegal immigration is discussed almost entirely from the illegals’ point of view: as Kasich advises, think of the families, think of the children. Their families, their children. The families of those they’ve supplanted are of less consequence. The argument made by Bush and Kasich against enforcing the immigration laws is an appeal to moral preening: this is “not who we are”. But using mass immigration to destroy the lives of your own citizens? That’s exactly who we are.

This is part of a thread that I’ve been following more closely, lately, with evidence that Rhode Island policies are literally switching out native Rhode Islanders with immigrants, perhaps as part of a push to bring in more clients for the inside interests that make Rhode Island a “company state.”  But to put a sharp point on it, turn to a chilling viral video, running about twenty minutes, that pieces together clips of the massive migration (some say, “invasion”) persisting throughout Europe.

To be sure, 20 minutes of footage from months of activity allows for a slanted view, but the points can’t be ignored.  Toward the beginning of the video, for example, a European woman exclaims, “We are the victims, here, not them.  We have to live like we did before.  We have to live our lives; they took it from us.”  The commentary running throughout the video addresses increasing incidents of rape and violence (including among school children) as well as the cultural displacement of Europeans from their ancestral home: “The Great Replacement.”

We’ve been trained to avoid any hint of xenophobia or racism, and that inclination is right and just, but we — all of us, Americans of every race and ethnicity — have a right to our homes and our heritage.  When those marching across Europe are quite explicit in their aims, when our political leaders speak of changing demographics as marking an unavoidable, often a preferable, future, we have a duty to consider the ramifications.  We have a right to worry about our families, our children.

60

RI Population: Starting Saturday on a Worrying Note

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Over my habitual Saturday morning coffee and pancakes, I perused Ted Nesi’s weekly column and came across this intriguing item:

Moody’s latest Rhode Island economic outlook, presented this week at the twice-annual revenue conference, is a mixed bag. … Other pluses: the job market and personal income both appear to be improving, and net migration (residents moving in versus moving out) turned positive in 2014 for the first time in a decade.

The downsides are middle-income jobs and home sales (and I continue to believe the overall employment numbers are greatly overstated).  But what about that net migration?  Slide 23 of the Moody’s presentation does indeed show positive migration, although it isn’t clear what scale the numbers are on or why they don’t match up with numbers directly from the U.S. Census.

Population is a limited measure, though.  A more critical question, for a struggling state, is: Who is coming and who is going?  Unfortunately, the IRS taxpayer migration data for 2014 isn’t online, for the moment, and detailed state-level data from the Census isn’t out for that year, yet.  Still, the Census does have the population estimates broken out by “components of change,” with some high-level detail about why people came and went.

From 2013 to 2014, the Census estimates that 1,375 more children were born in the state than people died, but that’s not the detail we’re interested in.  Under “net migration,” the data does show 903 more people coming here from elsewhere than the reverse, but the “where” is important.  When it comes to domestic migration — that is, people moving from one state to another — Rhode Island lost 3,387 residents.  International migration that makes up the difference, with 4,290 more people coming to Rhode Island from other countries than emigrating.

Obviously, the world is full of varied people, so any assumptions made at this level are just that: assumptions.  Still, recalling my observation, in August, that the increase of students in Providence schools came almost entirely from Hispanics who need extra help with English, the picture comes into focus pretty well.  The Census’s FactFinder tool can fill in some of the details.  From 2009 to 2013 — over the course of just four years — the percentage of children living in households receiving cash assistance increased by more than 50%.

RI-childrenpoverty-2009-2013

To deepen the picture a little, consider that the percentage of all families receiving public assistance increased by just 17%.  That’s still a big increase, but it suggests that Rhode Island’s population growth is in large part attributable to migration of poor, young families from countries to the south of the United States.

One needn’t be xenophobic to worry about the consequences of this demographic shift on the well-being of Rhode Islanders overall.  If Rhode Island’s economy were healthy and was therefore able to accommodate foreign families and empower them to lift themselves up, that would be wonderful.  More likely, though, like Lawrence, MA, we’ll continue to see government bring in new clients to turn RI into a company state, and somebody’s got to pay the bill.

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