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Immigration and Who’s Getting the Jobs

I’ve been meaning to highlight this for a few days, but I wanted to see if the Bureau of Labor Statistics has the data at the state level and do a little bit of digging on the Census’s site to see if there was anything comparable, but it was “no” on both counts:

… since December 2007, according to the Household Survey, only 790,000 native born American jobs have been added. Contrast that with the 2.1 million foreign-born Americans who have found a job over the same time period.

In August alone, “698,000 native-born Americans lost their job,” whereas 204,000 foreign-born workers “got a job.”

As with every topic of public interest, the nexus of immigration and employment is complicated, but we don’t give it anywhere near enough attention.  Sure, some of this disparity may be attributable to the retirement of native-born Baby Boomers and the influx of immigrants.  On the other hand, constraining immigration while Baby Boomers exit the market might help to turn around stagnant salaries, as each worker’s value goes up.

At the very least, we should think twice before pursuing policies (like driver’s licenses for illegal immigrants) that are sure to draw even more foreign-born workers with questionable connections to the state or country to compete for jobs that aren’t being created quickly enough as it is.


Saving Money When You’re Young

Millennials are having a discussion on the importance of saving money, particularly for retirement, with this bit of insight from L.V. Anderson on Slate:

On Wednesday, Elite Daily writer Lauren Martin wrote an essay called, “If You Have Savings in Your 20s, You’re Doing Something Wrong.” Based on the title, you might guess that Martin is a middle-aged professional whose life experience has taught her it’s a mistake to prioritize saving money in one’s youth, and who wants to share her hard-earned wisdom with the millennial generation. In fact, Martin is a twentysomething without savings who feels confident making assertions like, “When you’re 40, you’re not going to look back on your 20s and be grateful for the few thousand you saved.”

As somebody who happens to be 40, I’d suggest that Anderson’s most perspicacious suggestion is that the best approach to savings will depend on the person.  The important thing is to do things consciously and with as much information and consideration as you can muster.  For one thing, that will help you make better decisions, but perhaps as importantly, when you reach my age (or older… it’ll happen) at the very least, your predicament will be the result of making the best decisions you were able to make at the time, even if they weren’t very good.

Obviously, the first consideration is that it makes sense to save young.  At a 4% return, a dollar saved now will be worth $1.48 in 10 years, but $4.80 in 40 years.  Also obviously, the other side of the scale is how much a dollar is worth to you right now.

If I could, right now, have the $12 or so from investing the money I spent on every fast-food meal 20 years ago, plus the $7 or so from investing the money I spent on every pack of cigarettes I smoked back then (which would be around $2,400 from having stopped one year of smoking), that would be wonderful.  On the other hand, given increases in income, each dollar I have right now is arguably worth less to me than it was, then.  And other things can be seen as investments without being easily translatable into money, whether children, software, or tools.

I’d even go so far as to suggest that people should be sufficiently self aware to address psychological needs.  Having found myself addicted to cigarettes, it was a valid question, at any given point, whether the battle of quitting would have disrupted some other activity that turned out to be critical.  Likewise, it may indicate weakness or immaturity deserving of work, but if some indulgence keeps you from giving up hope or being depressed, then it isn’t wholly wasted money.

As I’ve been saying a lot, lately, the most important thing is to foster a society in which people can take the actions that they believe to be best.  Government incentives to “invest” in college, homes, or savings can just distort the market, assuming that those priorities should apply universally over a diverse society with people in very different circumstances.


Rhode Island Is Making Its People Miserable

I’m pretty sure I’d seen Gallup’s well-being ranking of the states before, but I hadn’t taken a close look.  Coming across it, yesterday, I did so, and it’s kind of depressing.

Rhode Island is 37th, overall, which looks good because we’re so used to being in the bottom 10, but that result is due to the fact that we tend to feel that we’re in good physical health (14th) and have a middle-of-the-pack sense of financial security (27th).  However, where we do poorly is telling:

  • The finding that we’re 45th for “liking where you live, feeling safe and having pride in your community” certainly jibes with constant commentary in letters, comment sections, and social media that many Rhode Islanders are either looking for a way out of the state or feel like they should be.
  • Being 49th in our sense of purpose — liking what you do each day and being motivated to achieve your goals — could have a lot to do with how difficult state and local governments make it to accomplish anything.
  • And our dead-last 50th ranking for “having supportive relationships and love in your life” could be a combination of having lost so many fleeing friends, family, and neighbors and feeling as if the entire state is working against us.

Honing in on the state government and its orbiting establishment isn’t just a peculiar bias, given my political occupation and interests.  Via her Twitter feed, WPRO reporter Kim Kalunian recently directed attention to a WalletHub analysis that places Rhode Island as the 41st most happy state — that is, the 10th most unhappy.  In keeping with the Gallup results, Rhode Island was a bit better (37th) for both “emotional & physical well-being” and “work environment,” but suffers (45th) under “community, environment & recreational activities.”

In short, Rhode Islanders’ misery isn’t something growing from our wealth, health, or psychological tendencies.  It’s something that somebody else is doing to us (or, rather, in the case of government, something that we’re doing to ourselves by means of the people we allow to walk all over us).

My saying this will surprise no one, but crony jobs in business regulation, new tolls and taxes to hide borrowing, government subsidies to struggling sports franchises, and fancy refinancing schemes to support an economic development slush fund are not going to fix the problem.  Governor Raimondo’s plans to use Brookings Institution findings to push Rhode Islanders into conformance with a government-driven economic plan is only going to make matters worse.  What we need is for legislators to stop doing so horribly on the Freedom Index.

Get out of our way.  Let us live our lives.  Ultimately, that’s what the pursuit of happiness is all about.


A Quick Financial Comparison of RI Colleges

Thanks to some unauthorized ball playing in my front yard, the rear window of my car had to be replaced, yesterday.  When he arrived, the technician looked very familiar, although it took me most of the installation to figure out why:  He attended a private elementary school when, in my late twenties, I taught computers one year and seventh grade (as an extended-term substitute) there.

In conversation, it turned out that he was consciously waiting on college until he could explain to himself why he was going.  “I don’t want to end up back in this job, but with student loans,” he said.  That’s wise for two reasons, to which I can speak from my own experience:

  1. What one studies in college matters, and despite the cliché that Baby Boomers handed down to subsequent generations, the cost of college is awfully high, these days, if it’s simply a period of self exploration.  (As an aside, one can explore and define one’s self through any activity.  The increasingly clear conclusion is that the progressives who define the popular culture like to brand college as the archetype of self discovery because they know their co-ideologues in the colleges will be happy to make the process a contrived scavenger hunt for their absurd ideas.  In the real world, young adults might discover that hard work pays off, family is important, religion sheds light on life, and conservatives aren’t evil and, in fact, talk common sense.)
  2. A student who knows why he or she is attending college will do better, because he or she will take the work more seriously based on the tangible life goals that inspire it.

Simply put, a young adult who doesn’t know why he or she is going to college shouldn’t be there.  Consider my former student. puts the average pay for auto glass installation in Providence at $41,000, and puts the median at almost $52,000.  Compare that with the median earnings of people ten years after they received federal aid to attend colleges in Rhode Island.  (Keep in mind, of course, that the and figures will include all employees from entry level to senior level, while the college data includes everybody from students who didn’t graduate to those with very targeted, high-income degrees.)

Only three of the twelve Rhode Island colleges listed beat the number for auto glass installers, and only seven of them beat the lower number.  Meanwhile, eight of the colleges cost as much or more per year as the estimated average salary for high school graduates ($25,000).

The pictures are more complicated for individuals, naturally.  Only 16% of full-time CCRI students graduate within four years, but that could mean that they are taking a long-term approach to education while working or transfer to four-year colleges.  (The methodology isn’t immediately clear.)

There is hope, however, in the possibility that younger generations are beginning to see college not as an expectation, but as a possible route to a better life for those who have a plan.


NABsys and the Investment of Public Dollars

Kate Nagle reports on GoLocalProv about another public investment gone wrong:

The closing of Nabsys, first reported by GoLocalProv, is likely to cost the state’s Slater Fund about $1 million and may have an impact on the Rhode Island pension fund.

Nabsys, LLC received over $40 million —  including millions in investment and loans from both Rhode Island’s Slater Fund and Governor Gina Raimondo’s venture fund Point Judith in multiple rounds.  Nabsys closed after it failed to find a merger partner or acquirer say sources.

Businesses open and close.  That’s how the marketplace works.  If Raimondo’s private investment firm wants to take the risk of investing, so be it.  NABsys’s connection through Raimondo to the pension fund or the Slater Fund merits a closer look, but doesn’t appear to be nailed down, quite yet.

One question that comes to mind, nonetheless:  Would it really be a “success” if a company backed by some investment through a publicly funded fund managed to merge itself out of existence or find an acquirer?  I’m sure financial wizards would be able to explain how this all benefits the state, but most Rhode Islanders, it’s fair to say, see public investment in economic development and technology as intended to grow the economy and create jobs.

Of course, if the founders of a private company can make a big profit through a merger or acquisition, their financial backers will profit, too, which can be a wonderful thing, but these sorts of money-making ventures shouldn’t be an activity of government.


The Business America’s In

Most readers of this site have likely seen this already, but I’d be remiss if I let it go by without comment:

Those employed by government in the United States in August of this year outnumbered those employed in the manufacturing sector by almost 1.8 to 1, according to data published by the Bureau of Labor Statistics.

There were 21,995,000 employed by federal, state and local government in the United States in August, according to BLS. By contrast, there were only 12,329,000 employed in the manufacturing sector.

If you’re wondering, Rhode Island has 60,600 government employees, according to the Bureau of Labor Statistics (10,500 federal, 16,000 state, and 34,100 local).  That compares with 42,000 in manufacturing, 15,200 in construction, 64,200 in wholesale and retail trade, and 55,500 in leisure and hospitality.

For the last few decades, Rhode Island and America have primarily been in the business of government, which explains quite a lot about the condition of our country.


Branding the Rhode Island Herd

In March, Rhode Island’s new governor, Democrat Gina Raimondo, announced herWAVE initiative to turn the state’s economy around through Workforce development,Advanced industries and innovation, Visitor attraction, and Enterprise expansion and recruitment.  Generally the marketing piece might appear to be the most mundane, in a “well, whatever” kind of way, but it might provide a lesson to help residents understand what their government is actually doing.

Lesson one is that emphasis on marketing can be evidence that leaders cannot or will not fix problems within their organization or with its activities.  Lesson 2 is that an organization can only have one “compelling,” unified brand, making it fundamentally incompatible with freedom as Americans have historically understood it.

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Rhode Island’s New Political Reality a Disturbing Joke

How about some review?  Under Governor Gina Raimondo (D):

  • The governor’s big economic development plan is centered around an intricate refinancing deal that essentially allows her office to borrow around $80 million without taxpayer approval.
  • The State Police has issued a heavily political report attacking the Republican mayor of Cranston (i.e., the governor’s electoral competition).
  • A bridge near the law office of the Speaker of the House was mysteriously closed down in the middle of an infrastructure debate for work that was of questionable necessity.
  • The governor’s toll-and-borrow plan for infrastructure is another way to borrow millions upon millions of dollars without ever having to win approval from Rhode Island taxpayers.
  • The quasi-public Commerce Corp. is acting like a Gina Raimondo PAC.
  • Wealthy political donors to Raimondo are “independently” funding a D.C. think tank to advance the governor’s policies, with clear cooperation from her office.
  • The Dept. of Transportation has hired a marketing firm to help it push Raimondo’s infrastructure proposal.
  • The DOT is also becoming a difficult place from which to receive documents requested under open records law.
  • Ultra-insider Richard Licht’s son landed a high-paying job with the Commerce Corp.

I’m sure there’s more that I’ve forgotten, but new to the list is the hiring of recently retired state representative Donald Lally to an $87,057-a-year position with the Dept. of Business Regulation, which (along with the Commerce Corp.) is under the direction of Raimondo’s Commerce Secretary, Stefan Pryor.  Despite the befuddlement of John Marion, one of the leading experts on RI ethics laws, Lally claims that revolving door provisions don’t apply to him because he technically works for the governor and is just on loan to the Dept. of Business Regulation.

The sick joke comes at the end of Stephanie Turaj’s report about Lally’s hiring, when the former rep explains his motivation as follows:

“I have two children, a daughter finishing up at the [University of Connecticut] and I have a son who’s a sophomore at the [University of Rhode Island] in business,” Lally said. “I’d like to give them the opportunity to work in Rhode Island if they wanted to. I wanted to help out and do my part.”

Well, if Mr. Lally wants to ensure Rhode Island–based work for his children, building his connections within state government seems to be about the only certain way to do so.  Any other parents who wish to do the same better get with the Raimondo program.


Another Lesson for RI: Vomit on the City Hall Stairs

If you missed this telling editorial in Saturday’s Providence Journal, be sure to read the whole thing:

The other day, the son of Cumberland’s David Ram-pone, president of Hart Engineering Corporation, was married at the Biltmore Hotel, in downtown Providence. Before the wedding, the bride wanted some pictures taken at leafy Burnside Park, with its lovely water fountain. So the entire wedding party, including two toddlers, trooped across the street.

Unfortunately, Mr. Rampone recounted, “we left in short order, as there were needles on the ground, human feces on some of the artwork, and a couple of people smoking crack. Nice environment for our small grandsons to be around.”

So the group moved on to the City Hall, a striking 1878 gem that is on the National Register of Historic Places and which The Providence Journal once called “our municipal palace.” They thought of taking photographs on the steps, from which such luminaries as Theodore Roosevelt and John F. Kennedy have addressed Providence crowds. But that was a no-go too. “Dried vomit and urine were all over the stairs.”

As fascinating as the original testimony, though, was the Twitter exchange that it prompted between progressive blogger Bob Plain, Democrat lobbyist Bill Fischer, and Providence firefighter union head Paul Doughty.  Plain voiced a “poor little rich people” sarcasm, to which Fischer took some umbrage, with Doughty chiming in to say that city government should be able to fund both jobs for cleaners and poverty programs.

Ladies and gentlemen, Rhode Island government in a nutshell.  The progressive heart bleeds so for the disadvantaged that those who are not poor become the enemy, and are well advised simply not to make the state their problem.  Organized labor drives up the cost of accomplishing anything through government, under the assumption that there will always be people with more money to foot the bill.  And the Democrat lobbyist and mainstream newspaper lament the results achieved by the politicians and policies that they have backed, without going so far as to reconsider those politicians and policies.

Even putting aside the inevitable raw corruption, big government inevitably comes to the point of vomit on the city hall stairs when it is built on the premise that government’s role is to redistribute wealth and simply make positive outcomes happen by fiat.  We should try allowing government simply to be a civic framework that allows the market to work, perhaps with some carefully considered corrections where there are cracks, and trusting in people to resolve problems (because we’ve encouraged them to do so through strong cultural institutions).

It will not help the poor of Providence if nobody with money ever goes there, and chasing redistribution up the government ladder — attempting to redistribute at the state, national, and international levels, so there’s nowhere for those with money to run — will only ensure that the hammer falls harder when it falls.


RI Government Is Becoming an Intelligence Test for Voters

Whether or not the reporters and editors intended it to be so, yesterday’s “Political Scene” in the Providence Journal is a “well, duh” message for Rhode Island voters.

Story one is about the continuing possibility of a legislative investigation of the 38 Studios mess, in which the legislature created law allowing the quasi-public Economic Development Corporation (EDC) to blow $75 million on a speculative video game company run by a baseball player.

Story two is a list of hundreds of thousands of dollars that various financial and legal companies collected in fees for processing the 38 Studios transactions.

Story three is about the hiring of the son of master RI insider Richard Licht for a $118,000 “director of policy” position with the EDC, which is now called the R.I. Commerce Corporation.

And story four is about the annual deficit that Governor Gina Raimondo will have to address as she puts together her budget for fiscal year 2017, despite which she is maintaining plans to use government spending to “attract[] entrepreneurs and [make] investments in industries that play to Rhode Island’s strengths.”  (That is, either taxes, fees, and/or debt will have to increase or the government will have to cut some other item that might actually be more important to a greater number of Rhode Islanders.)

The insider class that runs Rhode Island government has been playing the rest of us for suckers for a long, long time, but it’s now becoming so bleedingly obvious that only deliberate blindness can possibly explain the continuation of Rhode Islanders’ voting habits.


Inflating Costs Doesn’t Grow the Economy

If a company takes on a project that comes with specific terms, such as paying employees a certain amount, it should follow those terms.  That said, Governor Gina Raimondo’s statement concerning a government contractor who paid his employees less than the prevailing wage required for such jobs illustrates very well the economic thinking behind Rhode Island’s back-of-the-pack economy:

In announcing the settlement, Raimondo said it’s the first significant action of her new Workplace Fraud Unit, which will focus DLT’s effort on dishonest companies, investigate wrongdoing and enforce worker-protection laws.

“We’re going to go after companies that cheat because breaking the law not only hurts workers, it also hurts companies that follow the rules, pay proper wages and help grow the Rhode Island economy,” Raimondo said in a statement.

Think about the logic, here.  Raimondo is spending taxpayer dollars to enforce a labor requirement that makes government projects cost more than they otherwise would, and she insists that doing so will help to grow the state’s economy.  Put differently, the market sets a certain price for the type of work that Cardoso Construction’s employees do, and the government insists that it isn’t high enough.

As I’ve stated before, money is just a unit of measurement and a signal of value to the larger economy.  Forcing it to flow to a particular place to which it otherwise would not go means that it can’t go to something else, either because the system places less value on that something else or because the individuals who would put it to a different use can no longer access it.

It’s been a while since I looked at taxpayer migration data for Rhode Island, but the picture hasn’t really changed.  In the three years from 2010 to 2013, Rhode Island lost 6,613 taxpayers (accounting for about 19,634 people), who took with them $915 million dollars of adjusted gross income.  (That’s on a net basis, so it does include people who moved in the other direction.)

That’s almost a billion dollars in annual income of people who found somewhere else better to live.  Whatever it was that led them to leave, we can be reasonably sure that it wasn’t because Rhode Island government wasn’t taking enough money away from them in order to support laws that take even more away from them unnecessarily.


Rhode Islanders Need to Run the Bases Around 38 Stadium

The other night, I attended the forum on the PawSox Stadium deal hosted by Leadership Rhode Island that Ted Nesi moderated. I walked away with two observations: The 38 Studios affair is still very much on the minds of Rhode Islanders, and the people of our state are reaching their breaking point.

The best part of my job is talking to Rhode Islanders. We’re a plainspoken people, never afraid to tell you the way things are in our state. However, it is frustrating when it does not amount to more than talk.

I want to see the people of our state take action, and change the way things are for the better. At the RI Center for Freedom & Prosperity, we often say that the status quo is the enemy of our future, and that is the truth. Our people need another path forward to building a Rhode Island that has a future that can be truly free and prosperous.

At the forum, I was chatting with a retired woman who said she only had one piece advice for the young people of our state, “buy a plane ticket.” Maybe I’m too much of an idealist, but I don’t think things are that hopeless. It is still worth it to fight for Rhode Island. She told me that the stadium deal is sure to be another 38 Studios — that our state had just tried this experiment and it failed. Based on the boos and jeers from the crowd toward the two pro-stadium spokespeople, this woman’s sentiments were shared by all but the smallest margin of the attendees.

The 38 Stadium deal is well on its way to becoming more of the same failed status quo thinking that has brought Rhode Island to the brink. I love baseball and everything it stands for, and I love the PawSox. But I don’t want to see my state held hostage to another special interest. With the opposition to the stadium deal mounting, the lack of investigation into the 38 studios disaster, and our state’s tax and spend ethos, it is easy to see why people are angry.

It doesn’t have to be this way in the Ocean State. I like to remind people that they have all the power. Our elected leaders will listen when you force them to do so. When we don’t take action, there is no one to blame for the way things are but ourselves. Sitting in the dugout on this issue is not an option.

You have the right to demand a Rhode Island that is based on the principles of limited, transparent government, free-market policies, and an open playing field for everyone, not just the chosen few.  We all deserve to go around the bases, not sit in the stands while insiders swing for the fence.


Building Cities for Urban Planners

Aaron Renn makes the point that urban planners should give some thought to the type of area that a particular city should be, given its unique geography, history, and competitive advantages, rather than prioritizing their vision of the ideal city:

Where Ashland Ave. BRT fails is not in its attempt to improve transit service or to accommodate those who choose not to have cars. Rather, the problem is that it is rooted in a vision, propounded mostly by coastal urbanites, that believes car use should be deliberately discouraged and minimized – ideally eliminated entirely – in the city. Thus the project is not just about making transit better, but also about actively making things worse for drivers. That might work in New York, San Francisco, or Boston, where the car is more dubious, but in Chicago this philosophy would erode one of the greatest competitive advantages the city enjoys. In Chicago, the car free strategy only works along the north lakefront and downtown, not the Ashland Ave corridor or most of the rest of the city.

The no-car philosophy as the norm, not just an option, would undermine one of the greatest strategic advantages of Chicago. Why would you want to do that? Particularly when it would also make family life in the city more difficult for many. There is where urbanists need to start putting on their strategic thinking hat. Otherwise they may end up undermining the very places they seek to improve.

Renn seems to think this is a Midwest versus Coast dynamic, but Rhode Islanders should put on their strategic thinking hats, too.  One of the great advantages of the whole state is the ability to move around.  On a whim, when a business associate was staying in Providence, we zipped down to a restaurant near First Beach in Newport for breakfast.  Sports leagues regularly direct my family around the state.  Based on my experiences and positive things that are generally said about Rhode Island, progressives’ war on cars — like just about every progressive policy — would only hurt Rhode Islanders.

This point has a much broader application.  With RhodeMap and every other central-planning project undertaken by the state government, the fatal flaw is the conceit that planners can and should figure out what the state needs and push it in that direction.  The people of Rhode Island have a much better sense of the attractions and advantages of their state than any small group of planners, and they aren’t going to give over their information at public meetings, even if the planners could correctly interpret what they were saying, because only a narrow subset of Rhode Islanders ever knows about such meetings, let alone bothering to attend.

The solution is freedom, with money as the measurement of what people are doing.  With freedom and capitalism, businesses can identify opportunities at a very small, local level, and the people will tend to get more of what they want, and in an improved way.


The Thing with Regulation

One helpful outcome when particular controversies arise over regulation is that statements of principle and assumption emerge that offer a common-sense check.  So, as taxi companies sue to impose regulations on the ride-sharing service Uber — rather than advocating to have the regulations under which they, themselves, must operate eased (go figure) — we get statements like this:

Echoing a larger global fight over ride-hailing services, the taxis argue that under Rhode Island law any driver or company providing for-hire automobile rides must comply with the stringent regulations enforced by the Public Utilities Division. 

“None of them do, and all of the services provided by Uber and Uber drivers are therefore illegal,” the lawsuit says. “This massive illegal operation puts the public and consumers at risk and erodes the viability of licensed, authorized and legal taxicab operators.”

In what particular ways do ride-sharing services “put the public and consumers at risk”?  The cars could be in bad repair or with some sort of health issue or infestation.  The driver might have mental issues.  Who knows?  The world is an unpredictable place.

But if freelance cars through Uber really offer an inferior or dangerous service, shouldn’t taxi drivers be able to compete?  Couldn’t there be a national certification that they, themselves, could promote through Uber or by setting up a competing app?

Special interests like to talk about their concern for the consumer, but they treat them as if they aren’t really people, as if we’re all just drones who won’t make any decisions but will slide right into a filthy, smoking wreck of a car driven by a guy in a hockey mask just because an unregulated app brought it to the curb.  If consumers aren’t drones, then shouldn’t it be relatively easy for the clean cab with a national certification and a friendly driver to charge a little bit more and put the scary guy out of business?

Of course, that would mean the taxi company would have to compete with drivers and with technology, and the reality is that the ride-sharing service isn’t a nightmare.  That’s why the established companies are scared.


Updated – Terrible Tolls Would be a Win-Win for Governor Raimondo and a Lose-Lose for Rhode Island

From the wow-that-didn’t-take-long department, the Providence Journal’s Kathy Gregg, in a piece of kick-butt journalism yesterday, reports that the tolling of all vehicles is now on the table as an option. It seems that, at Speaker Mattiello’s suggestion, Governor Gina Raimondo is carrying out an “economic analysis”.

In recent months, the administration also commissioned an “economic analysis” of Raimondo’s truck-toll plan and a variety of other possible revenue-raising options that could, potentially, include: other new “user-fees,” gas taxes and a revived effort to toll all vehicles — not just big trucks — on Route 95 near the Connecticut border.


Progressives’ Old Fashioned View of the World

The mobility of human beings has advanced to the point that technology allows us to accomplish many of the things we used to have to move around to do without leaving our homes.  Meetings.  Research.  Shopping.  Collaboration.

With the growing trend of a dispersed workforce, what’s the progressive solution for saving Providence government financials? Well, if Sam Bell, leader of the state branch of the Progressive Democrats of America, is representative:

“If Providence were able to tax the income of wealthy commuters who live in the suburbs, we could eliminate or drastically reduce property taxes and solve Providence’s fiscal nightmare overnight. This is the policy solution many other states take to this challenge, but the General Assembly will not allow Providence to implement it. And so our central city crumbles—plagued by poverty, a shrunken police and fire force, struggling schools, brutally high taxes, and fundamentally impossible math,” Bell added.

The first thing to note is that Bell should really be required to substantiate his “many other states” assertion.  A quick online search mainly brings up articles about cities that are seeking this particular golden goose, but their success seems limited mainly to Pennsylvania (Philadelphia and Scranton… stop laughing).  New York City let its commuter tax expire with the last century.

More important, though, is the sheer economic illiteracy, matched with historical anachronism.  Cities’ main problem is that people no longer have to interact with them.  When transportation was limited to feet and horses, it made life a lot easier to live close to work and to the services that other people provided.  Those days are gone.  Not only can we drive and telecommute, but individuals and businesses alike can order products from around the world and have them shipped quickly and cheaply.  Increasingly, we can order products and services that can be delivered instantly via the Internet.

Now that necessity is moving out of the picture, the challenge for cities is that people have to want to go there — for work, convenience, or entertainment.  Taxing them to work there while living somewhere else makes working there less desirable.  (It’s a complicated equation, I know.)

At bottom, the progressive view on such policies winds around two poles: being able to tell people how to live and distributing government services (while collecting votes in exchange).  That’s a very old-fashioned model, and it’s the one that cities still serve best, as proven by the strength of Democrats in cities even within Republican-dominated states like Texas.

This simple truth is easily forgotten, but our society shouldn’t be structured entirely around government services.  That’s not what life is supposed to be about, and people should be suspicious of anybody who seems to believe otherwise.


To Whom Is Central Planning Useful?

Ted Nesi is striving to keep the forthcoming Brookings Institution report about Rhode Island as an open question.  That’s an understandable — responsible — approach, considering that the fact of the study was just announced and it’ll be the better part of a year before there are results to report.

That said, I’d encourage Rhode Islanders to push their assumptions one more step and question those, too.  Here’s Nesi:

Hopefully the $1.3 million being spent on the report – paid for by foundations and a few wealthy Gina Raimondo supporters – will at least buy some robust new data about the state’s present economic condition.  Beyond that, the onus will be on Brookings to show why this report’s recommendations will be more useful than those in all the reports that came before it. … They could provide a useful service if they tell it like it is.

The question is:  A useful service to whom?  Somehow, I don’t think the people funding the report are planning to offload some of the market research expenses from private businesses and individuals.  That means the report will mainly be useful to the wealthy, powerful interests who are taking it upon themselves to contrive a detailed direction for the whole state.

And it’s not even just the state.  Consider another item from Nesi’s Saturday column:

Also on the topic of economic development, Congressman Joe Kennedygave a noteworthy speech last month that called for local leaders to start thinking beyond the borders of their two states. … His idea, he said, is “about starting to rethink the way we pursue economic development on the South Coast. Leveraging the assets and strengths of this region in a comprehensive, collective way. Treating Fall River, New Bedford, Attleboro, Taunton, Tiverton and Providence not as isolated silos, but as a combined economic force.”

Who will make decisions for this “combined economic force”?  In Tiverton, for example, residents just blocked a major development along Route 24 next to the Sakonnet River Bridge; a year ago, they played a large role in reversing the push for tolls on that bridge.  Next year, they’ll likely decide yea or nay on a casino on the border (with early indications giving the better odds to yea). One can disagree with any of these results, but the opinions of local residents ought to have more sway than the state government’s, let alone the demands of some regional coalition or authority.

Yeah, maybe lightning could strike for Southern New England, and (despite its historical record of corruption) the machinations of influential people could create a global dynamo.  If that’s the vision, though, how could a few hundred people in a high school auditorium be permitted to wield a veto?


Unweaving the Regulatory Noose

This chart, from ZeroHedge, sums up some of the points I’ve been making recently:

Note that the “Reagan Dip” isn’t a reduction in the number of pages of regulation, it’s just a reduction in the rate of growth.  The summary of the economic growth of the Reagan era was that the federal government kept up its creation of money in the present through debt while cutting taxes and slowing the growth of regulation, thus allowing the debt-driven cash to flow into productive activity.

This collection of policies revved the economy, and what should have happened in the ’90s was a reduction of debt along with further reductions in taxes and real reductions in regulations.  The economy’s growth may have slowed, but the country would have been on a stronger footing, with new digital technologies having already begun to emerge.

Instead, regulations kicked back into high gear, and the Clinton Administration transferred the burden of creating fake money onto the stock market and housing debt.

Regulation helps lock wealth in where it exists, so it’s good for the powerful.  But when things begin to fall apart in earnest (as they probably will soon), turning the above chart into negative territory, by actually eliminating regulations, would provide a boost to the economy that would actually help the working and middle classes and shift resources more efficiently.