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The Average Guy Pays: Insider Schemes Are Disruptive To The Marketplace

Your family deserves to live in a state where they have the freedom and opportunity to achieve greater prosperity. The only thing that stands in the way of this happening is the status quo public policy culture in Rhode Island. For too long one voice has dominated the public debate, and it has led to a series of political scandals and corporate welfare handouts. It is time to end the culture on Smith Hill that rewards the chosen few, while the rest of us are left to suffer under their high tax and spend culture. Both the left and right can agree that we can do better than more handouts from the insiders.

Corporate cronyism does virtually nothing for the average family and it adds the further insult of forcing the average guy to pay for it. Governor Gina Raimondo’s stated goal is to restore Rhode Island’s troubled economy through big handouts to target industries. But is there any proof that this approach will work? Rhode Islanders already saw a similar idea fail in the 38 Studios disaster. The people of our state cannot afford another government run fiasco where our hard earned tax dollars are used to further the status quo’s agenda.

Recent research from the American Legislative Exchange Council (ALEC), directly implies that New York’s failed “Start-Up NY” program is likely a bad omen for Rhode Island’s similar RI Innovates plan. After a $53 million national advertising blitz, Start-Up NY created on net only 76 new jobs. The Start-Up NY program demonstrates the failure of government directed economy and corporate cronyism. Further, as ALEC points out, this elitist, insider approach towards economics is not only unfair, but it is disruptive to the marketplace and may actually shrink the overall jobs pie.

Imagine an Ocean State, where it would be easy for our family members to achieve their hopes and dreams. I don’t think too many would say that status quo public policy culture in Rhode Island is making anything easy for us. For too long, the political elites have rewarded their cronies, and made it harder for new business to take hold here in our state. This needs to change. I encourage you to speak out against the cronies and the handouts that further their own personal interest instead of what’s really in the best interest of you and your family. Please have a happy and safe Memorial Day, and remember all those who have served.

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Thanks, Mr. Vice President, But We Already Well Understood the Problem

… our bridges are bad.

Before his speech, Biden got a close look at the notorious “Lincoln logs,” as he called them, holding up the McCormick Quarry Bridge over Warren Avenue, and described them as “shameful.”

The question is, how to pay for the repairs. A large part of the problem is that the “middle-class jobs” you and Governor Raimondo tout,

“Infrastructure is about a lot more than delivering people from Point A to Point B; it is about middle-class jobs,” Biden said. “Nobody is making minimum wage pouring concrete on a highway job. No one is making minimum wage surveying a new road. …

when funded by yet another government fee, tax or toll, simply come at the cost of other members of the middle class (and every other “class”). The middle class – and all Rhode Islanders on the economic spectrum – would be better off if the repairs came from more prudent budgeting – quite easy to do when the net money that will actually go into bridge repairs from the RhodeWorks toll plan, after bond interest and gantry costs, is only approximately $15 million/year, not the $45 million that RhodeWorks will cost us. Best of all, none of those “middle class” jobs go away just because they are funded more responsibly by the Governor and the General Assembly.

Speaking of the General Assembly, very interesting that neither the Rhode Island House Speaker nor the Senate President were present yesterday in East Providence as Vice President Biden was praising tolls, RhodeWorks and Governor Raimondo.

Larry Berman, spokesman for Mattiello, said the speaker needed the morning to work at his private law practice. Greg Pare, spokesman for Paiva Weed, said in an email that the Senate president’s “schedule did not permit her to attend today.”

As they are both very much members of the Vice President’s political party, it is odd that they would miss such a high profile event, especially in an election year.

Is anyone hearing why? Were they not invited? Or did they choose not to go …?

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Big Red Flag When Left & Right Agree: End RI’s Corporate Welfare

Gary Sasse, founding Director of the Hassenfeld Institute for Public Leadership at Bryant University, and Sam Bell, state Coordinator of R.I. Progressive Democrats, have written an op-ed correctly condemning Governor Raimondo’s brand of lazy (my word) and expensive (to the taxpayer) economic development, printed in yesterday’s Valley Breeze.

We think that the core of voter discontent in Rhode Island originates in the widespread belief that public policy is disproportionately benefiting the well-connected. The poster child for this is the emphasis that the governor and General Assembly place on corporate welfare.

Corporate welfare exists when tax dollars are used to finance preferential tax deals, loans, and direct cash subsidies to specific businesses.

One of the biggest initiatives of the governor and General Assembly was the massive expansion of the corporate welfare agency that did the 38 Studios deal. Rebranded the Commerce Corporation, the controversial agency now has the power to hand out millions of dollars per year in cash subsidies directly to corporations.

Well said. And disturbing.

Remarkably, on her ongoing listening tour, Governor Raimondo actually lists her expansion of these tax credits and subsidies, via the agency that implemented 38 Studios (formerly the RI EDC; now the RI Commerce Corp), as an achievement of her administration. Further, as Sasse and Bell note, the General Assembly is fully complicit in this highly undesirable expansion of state-sponsored corporate welfare as it approved these line items in the budget.

Last year, a taxpayer-subsidized baseball stadium proposed for Providence was killed by a loud, across-the-political-spectrum bronx cheer. Similarly, this bi-partisan/non-partisan denunciation by Sasse and Bell – who speak for many, many of us across the spectrum – of these programs should be a big red flag for both the Governor and the General Assembly that a serious re-assessment and sharp cutting back of these programs are in order.

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… Wait, What? Tourism Dollars Were Spent to Attract BUSINESS to RI?

So NBC10’s Bill Rappleye reports that a special legislative commission is having a tough time getting satisfactory answers as to how the state Commerce Corporation (former the EDC, the agency that enabled 38 Studios) spent a bunch of tourism dollars.

Lawmakers put $5 million in this year’s budget to create a statewide tourism marketing plan. A legislative commission is trying to find out what happened to the money.

“You have almost $4 million being spent and not one paid tourism ad that I’ve seen,” Evan Smith of Discover Newport told NBC 10 News. “Not one.”

And via the Providence Journal today, we learn from that hearing where at least some of the state’s tourism money went. Turns out it wasn’t to … well, tourism. (Emphasis added.)

Evan Smith, CEO of Discover Newport, had a number of concerns, including the state’s focus on public relations and “earned media,” which account for $3 million of the total budget, rather than traditional advertising. “The amount dedicated to public relations is absurd,” Smith said.

He also blasted the one major commercial the state has purchased so far, a spot produced by CNN that appears in airports and on long-haul flights, for missing the “local drive” market the campaign was supposed to focus on. The airport spot, geared more toward CEOs than families, played in to a major complaint across the commission, that the Commerce Corporation was focused on luring new companies to Rhode Island at the expense of growing tourism.

Smith said he had asked six times to see examples of the paid tourism commercials the state was running, and only last week found out that they were all targeted to business attraction. “I thought it was very misleading and under the table, quite frankly, and didn’t appreciate it at all,” Smith said. “We would like to see a separation in business development and tourism.”

Hear, hear, Mr. Smith! So Governor Raimondo’s economic development efforts to date are comprised of 1.) corporate welfare and 2.) plundering the tourism budget???

This is NOT WORKING. The Raimondo administration took a bunch of tourism dollars back from regional tourism councils and squandered it. The money needs to go back to these councils, where it clearly was better spent by people who where in far better touch with the product that they were marketing. As for any statewide tourism efforts, it is now evident, from this eye-opening hearing, that the General Assembly would be chumps to give even one dollar, much less a budget increase (laughable idea), to the Commerce Corporation, which has demonstrated a lack of both competence and accountability in this area.

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Our Basic Choice: Slavery or Freedom

For a bit of Friday morning political philosophy, here’s Richard Fernandez, saying, “Greetings, Slaves“:

The issue which dogs Hillary and which no cosmetic distancing from Sanders will solve is that the middle class is losing faith in the platform. The political turmoil threatening to break apart the EU and the American Blue Model is rooted in the fact that both are broke and have no prospect of meeting obligations as manifested in the stagnation of wages in the West and also in the collapse of the “security” safety nets for which the present-day slaves have traded away their freedom. The progressive campaign is essentially predicated on the assumption that a sufficiently resolute government can defy the laws of financial gravity. There is now some doubt on that point.

Basically, the thesis is that our current political moment brings evidence that there is no tweaking of corporatism that will work.  In attempting to strike a deal between the central planners and the corporate types who seek profit and love a monopoly, the self-interest is too strong and reality too uncompromising.  In no time at all, people realize that they’re slaves, and they either revolt or lose their motivation to work.

Reality refuses to be what the planners need it to be for political reasons.  People will trade their freedom for some price, but it’s always a higher price than central planning can ensure, mostly because freedom and human nature — both antithetical to the planned state — are necessary for both human fulfillment and economic progress.  As the Judeo-Christian scripture and history prove, we were designed to seek God, not pitiful material substitutes, whether they be graven images, filthy lucre, or a secular state bent on conformity.

As Fernandez wraps up: “We’ve tried being slaves. Let’s try being free.”

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Pawtucket Train Station – So RI is Just a Suburb of Boston?

My main beef with the proposed Pawtucket train station is that it is completely absurd to spend north of $40M to accommodate only eighty nine (89) net new riders.

But in its weekly look at Best and Worst Bills of 2016, the RI Center for Freedom & Prosperity (disclosure: I am their Communications Manager) raises another unfortunate aspect of the proposed station. They point out that it offers a disturbing insight into the economic development philosophy of state officials who are pushing for the station, which is that it

… perpetuates a submissive philosophy that the State of Rhode Island should be considered a suburb of Boston and should rely on the Massachusetts capital’s economy to achieve growth. The Center strongly disagrees and for years has advocated that broad-based reforms can transform the Ocean State into a vibrant and independent economy of its own that will benefit all families and businesses, as opposed to the insider few industries targeted by the Brookings plan.

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Seek the Government Distortion to Solve Affordable Housing Problem

Upon reading an article such as a blurb by Christine Dunn in today’s Providence Journal, about Rhode Island’s high rental costs, my first reaction is always to wonder why nobody ever looks to the causes of supposed problems:

Rhode Island’s state minimum wage is $9.60 per hour, but a worker would need to earn $19.06 an hour to affordably pay a rent of $991 a month, the state’s fair-market rent for a two-bedroom apartment, the study added. The estimated mean hourly wage of Rhode Island renters is $12.59.

“Today’s report shows what we already know: we need to invest in and build more housing in Rhode Island,” said Barbara Fields, executive director of Rhode Island Housing.

Of course, one should challenge the assumptions of an article that is so thoroughly in line with the cause of an activist who has a personal interest in public policy on the issue.  Why should we assume, for example, that a person earning the state’s average should be able to afford a two-bedroom apartment on his or her one paycheck?  Add in a spouse or a roommate at the average, and suddenly Rhode Island rentals are very affordable.  Or hey, do what millions of families (like mine) have done and take on additional work!

But even going with the concept that Rhode Island needs “to invest in and build more housing,” why ought that to be done with government involvement?  Unless something (probably government policy) is getting in the way, the market should take care of this.

If apartments are drawing such an exorbitantly high rent for the area, then more people should be seeking to become landlords.  The higher the profit, the greater the motivation.  This should ensure that housing expands until its ready availability drives the price down to the point that the incentive to build more is no longer there.

If that isn’t happening, something is keeping the cost of building and maintaining rental property artificially high or keeping wages artificially low.  In Rhode Island, it’s probably both.  Or maybe the assumptions about what is “affordable” are flawed.

Whatever the case, using government to force more money into housing — with strings and bureaucratic rules — doesn’t solve the underlying problems, but takes resources away from something else that our community needs and wants, which could be the very something that will help resolve those underlying problems.  (Hint: like innovation and jobs.)

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Serving One Another Through Innovation

There are bills being considered by the RI General Assembly, H8044 &S2864, which may kill the efficient transportation network services like Uber & lyft in the Ocean State.

In this video, I give commentary on testimony given by Rhode Islander to the RI State Senate on the role of Uber in his life. Nick Zammarelli, a blind Coventry school teacher, testified to RI State Senators: “As a totally blind school teacher, prior to Uber’s arrival in Rhode Island, I had to think about how got from point A to point B every single day. ”

Watch my commentary on the compelling testimony now. For my money, the most important part of the testimony had nothing to do with Uber, per se. It had everything to do with innovation and everything to do with the way in which Rhode Island government prevents us from finding the most effective ways to serve one another. Why do we tolerate elected officials to kill the innovation that will help the disadvantage among us?

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Rhode Island, Land of No Jobs & Opportunity

This week, the RI Center for Freedom & Prosperity released its second monthly iteration of the Jobs & Opportunity Index (JOI).  With eight of the 13 data points that make up the index having been reported, Rhode Island’s score improved a little, although we’re still 48th in the nation.  Nonetheless, we did slip some, compared with our New England neighbors… not that there’s any danger of any New England states overtaking us, since we’re already trailing the pack.

 

The area of increase merits a closer look.  Where Rhode Island improved was the Job Opportunity factor, which puts the state’s labor force, as reported by the Bureau of Labor Statistics (BLS), in the numerator and three alternative measures of unemployment in the denominator: long-term unemployed, people who are marginally attached to the labor force (i.e., they don’t count, because they didn’t look for work in the prior month, but they’d like to work except for some problem), and those who are employed part time, but would rather be full time. The alternative measures are released quarterly, so they’ll have a bigger effect when they change.

Specifically, the Job Opportunity factor saw the numerator edge up slightly (pretty much flat), and the alternative measures decreased in the denominator, leading to a better score.  Even so, some interpretation is necessary.  All told, 3,700 Rhode Islanders left that denominator, but not many were added to the numerator.  Because the labor force is both employed and unemployed, these people on the edge of Rhode Island’s working economy must have simply given up and stopped even thinking about work, to the extent that the numbers can be combined in this way.

What all this parsing indicates, more than anything, is how painfully stagnant Rhode Island is.  We need to have clear improvements to the economy, as proven by people working, new jobs, and higher total income.

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Gov Raimondo Hands out Another $7M in Tax Dollars In Lieu of Real Econ Development

From the Providence Business News.

The R.I. Commerce Corp. voted to approve more than $7 million in state relocation and redevelopment credits Monday to several corporations that plan to invest in or bring jobs to Rhode Island.

“These are three fine projects that are helping to advance our economy,” said R.I. Commerce Secretary Stefan Pryor.

What is actually needed to advance the state’s economy, Mr. Secretary, is substantive improvements to the tax and regulatory climate to signal to out-of-state businesses (and the jobs they bring) that they can come here and prosper without having to go on BENDED KNEE to state officials for CORPORATE WELFARE.

What is even more disturbing is the revelation that taxpayers are, in fact, being forced to come out of pocket via these subsidies to compensate for the business climate and market conditions created by decades of costly, anti-business policies that the Raimondo is studiously choosing not to address.

The company has developed two other hotel properties in Rhode Island, including the Hampton Inn & Suites in downtown Providence. Like those, this project needs state assistance in bridging the financial gap created by market conditions. In Boston, he said, the company has properties built at similar cost that fetch $300-a-night for rooms. In Providence, similar rooms would be booked at $170 a night.

“But for this supplement, this project would not happen,” Karam said.

Remarkably, at a recent stop on her “listening tour”, Governor Raimondo actually touted the fact that she had increased such taxpayer-funded tax credit and give-away programs as though it were an achievement of her administration!

Rhode Island needs someone at the State House to be the adult here. Minimally, these taxpayer-funded subsidies need to be shut down while we wait for the governor to come to her senses about the real action needed on economic development … or, if that is not going to happen, until the next governor is installed which, hopefully for the sake of the taxpayer’s wallet, will be in two and a half rather than six and a half years.

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Overtime Rule Affects Freedom and Innovation

Multiple posts on Instapundit, today, expand on the harm of the Obama administration’s mandating expanded requirements for overtime, which I mentioned yesterday.  Walter Olson hits on a key point:

Perhaps most significant, it would force millions of workers into time-clock or hour-tracking arrangements even if they themselves prefer the freedom and perks of salaried status. … Many workers will also lose the option of “comp time” arrangements, often valued as family-friendly, by which extra hours worked one week are offset by a paid day off in the next.

James Sherk fills in more similar details:

The rule will change how employees work. Overtime-eligible salaried employees must carefully log their hours. Each time they respond to a work e-mail, take a work phone call, or do any other work from home, their employer must track and pay them for it. If they do not, they risk getting sued. Trial lawyers filed 8,800 Fair Labor Standards Act lawsuits in 2015, many of them for employers who did not compensate overtime-eligible employees for work done remotely.

In order to avoid lawsuits, many employers deny flexible work arrangements to overtime-eligible employees. Virtually all employers who permit remote work and flexible work arrangements allow overtime-exempt employees to use them.

Apart from the economics that I discussed, yesterday, the act of enforcing such regulations and the necessary calculations that businesses must make have an effect, too.  Even if both the employer and the employee wish to experiment with some new arrangement, the employer has to carefully consider the possibility that they’ll accidentally run afoul of the rules and create vulnerability for a lawsuit.

Ultimately, all innovation is related.  Innovative ways of working create new markets and may open up the possibility of innovative new methods, services, or products, while also freeing up costs in the economy that can be put toward something more desirable.  If you commute to work, would you rather spend your money on gas and your time on traveling, or would something else be of higher value?  The answer is obvious.

One unspoken rule of big government, though, is that society can never be permitted to advance more quickly than unimaginative politicians and insiders can figure out ways to profit from innovations and further entrench their power.

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Pro-Business? DLT Refuses to Cite Basis for Giving Unemployment Benefits to Striking Workers

Two weeks ago, the RI Department of Labor and Training authorized striking Verizon workers to receive unemployment benefits by erroneously labeling the action a lock-out. Not only does this egregiously wrong decision come at the expense of all RI businesses but, if it stands, it could set a costly precedent.

True to their word, Verizon was in Superior Court Wednesday contesting the decision and asking that unemployment benefits “be immediately suspended”. But DLT was not forthcoming, at least publicly, about the basis for its ruling.

[DLT Spokesperson Michael] Healey declined to discuss the evidence or the factual statements that led to Jensen’s decision, telling The Providence Journal that such information is “confidential.”

Two things. Why can’t they discuss the basis for the decision? Is it because it is so weak and indefensible?

Secondly, Governor Raimondo claims to be working vigorously on the economy and the state’s business climate. Does she agree with this blatantly anti-business, pro-union decision by the RI Department of Labor and Training?

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Huh. Why is Vice President Biden Really Coming to RI?

Governor Raimondo says its because her toll-funded

RhodeWorks, a program that is set to charge tolls on some trucks, and other construction projects, has turned heads, including in Washington

But could the real reason be to try and get someone, ANYONE other than those who would directly benefit from it (or is a personal friend of the Governor), to say something good about her toll program? If so, it’s interesting that Governor Raimondo’s administration had to go out of state and all the way to Washington, DC, to find someone to talk up this highly destructive new revenue stream. It would also confirm the generally held view that Governor Raimondo’s toll program, passed by the General Assembly (how did your legislator vote?), has pretty much the same political popularity as a new government Puppy Kicking Program.

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More Pay or Job Loss. Win Either Way!

The big-wave reaction of conservatives to news that the Obama administration is expanding the eligibility for overtime pay for U.S. workers in the private and public sectors is apt to be something like: “Where do these people think the money comes from?”

The hours and compensation of any given worker are determined by a complicated mix of factors that are impossible to tease out of the economy.  Using the blunt force of federal power, Obama is forcing all businesses to reevaluate that mix, all in the same direction.  If the progressives’ starting assumption is that workers are powerless and exploited, such mandates do not change their leverage.  Arguably, they weaken it by reducing their options for negotiation.

That’s the smaller wave that winds up stinging one’s eyes.  Here’s the vice president of the United States:

The White House estimates that the rule change will raise pay by $1.2 billion a year over the next decade. In addition, some companies may instead choose to reduce their employees’ hours to avoid paying the extra wages.

“Either way, the worker wins,” said Vice President Joe Biden on a conference call with reporters Tuesday afternoon.

Labor Secretary Tom Perez adds a cryptic note to the same sentiment:

Secretary Perez says employers have a variety of ways they can comply with the new rule when it takes effect Dec. 1. “People are going to get at least one of three benefits,” Perez said. “They’re either going to get more money … more time with their family, or everybody is going to get clarity.”

Putting aside the problem with interpreting “clarity” or assessing its potential value to workers, who are these people indiscriminately to determine what workers should value?  What if your employer gives you the “more time with family” benefit, but you want to be able to work, both for more money and more opportunity?  (What if — mystery of mysteries — you like your work?)

What they’re really doing is stealing your right to determine your own priorities and values and trading them in for some cheap votes and political support.

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JOI? About that Unemployment Rate, Governor

Governor Gina Raimondo’s approval rating isn’t good and, in fact, is going in the wrong direction due to

a sharp rise in her negative ratings this year, according to a newly released poll.

Asked about this in a couple of different instances by the press, the Governor responded by citing purported achievements of her administration but always including a reference to the state’s dropping unemployment rate – this one courtesy WPRI.

Asked Thursday how she reacted to seeing her approval rating at 41%, Raimondo replied: “I was pleased.”

“You know, it’s early in my term,” she continued. “We’ve been on for a year. We’ve had a lot of momentum. Our unemployment rate dropped.”

Actually, the unemployment rate is an inadequate reflection of the measure of employment as, among other things, it fails to distinguish between part and full time employment and actually counts a declining labor force participation rate as a good thing.

The Rhode Island Center for Freedom and Prosperity has developed a more comprehensive snapshot, called JOI (Jobs & Opportunity Index), of the larger state economic picture, as opposed to the narrow snapshot of the monthly unemployment rate. From the JOI webpage:

JOI is a national index of states that incorporates three major factors, comprised of over a dozen variables derived from government reported data:

1) A proper measure of employment as it relates to labor force,
2) A measure of job/employment levels as compared with public assistance rolls, and;
3) A measure of personal income as compared with government tax receipts collected”

By this measure, Rhode Island ranks forty eighth nationally – not at all a ranking that any state official should or could brag about.

Be sure to keep an eye out for Rhode Island’s JOI ranking as the Center will be updating this important new measure every month when the state’s unemployment rate is released.

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OO Is for Food Czar, Cooler & Warmer, and Brookings

News that Democrat Governor Gina Raimondo has moved forward with the economy-rescuing hire of a “Director of Food Strategy” brings to mind the recent Brookings Institution report that is now the basis for Rhode Island’s economic development schemes.  There’s this, for example, on page 7:

Design, Food, and Custom Manufacturing: Industrial design provides significant competitive advantages for companies. Driven by rapid technological developments, falling costs, and 3D printing technology, industrial design is an increasingly important part of product and service development. Meanwhile, a burgeoning maker movement is lowering the barriers to designing and manufacturing goods. Particular opportunities for Rhode Island include rising demand for industrial design and growing interest in food manufacturing that stands at the nexus of food and health.

And that’s not all. Page 9:

The state’s quality of place is alluring and increasingly wellknown, and includes not just the shoreline and historic charm but distinctive cities and towns, vibrant food and art scenes, and an increasing “coolness factor.” However, the innovation community remains atomized and lacks the focal points, collaboration spaces, and state-of-the-art “innovation districts” and neighborhoods that are needed to retain and attract talent.

Oh, hey, there’s that “coolness” thing.  I wonder how much Brookings’s fondness for all things “cool” influenced the governor’s failed Cooler & Warmer tag line.

The real significance of these few overlapping words is the early indication that:  This is what the top-down, experiment-with-Rhode-Island, Brookings approach entails.  The public is only as involved as it has to be for PR purposes (because the experts know better… all about “the nexus of food and health”), and food czars and marketing czars gorge on our tax dollars.

More broadly, this is what central planning looks like.  We’ve got a report.  We’ve got people with our money and collective power who need to implement the plan in that report.  And so we get people who can’t possibly have all of the relevant information about our people, our economy, and our interests who have to make decisions because they were told to do so by the planners.

It won’t work, but boy will a handful of insiders, cronies, and politicians get rich and powerful as they fail.

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And We TRAIN Union Bosses on Top of Everything Else?

Quick preface: while some of us don’t hesitate to criticize the Providence Journal, I will say they get credit for running this Mark Patinkin column on the front page of the Sunday paper.

Right to organize. Contracts that often permit union business to be done on the taxpayer time. Just last week, a blatantly pro-union, anti-management, grossly erroneous decision by a state agency that will give striking (that’s STRIKING, RIDLT, not locked out) Verizon workers unemployment benefits.

Like this state isn’t already pro-union enough, with all of the corresponding damage that is done to our tax bills and the state’s business climate, our tax dollars are also going to train union bosses??? From Mark Patinkin’s column on the front page of yesterday’s ProJo.

For decades, taxpayers have been giving big bucks to an outfit whose main mission is training union leaders. This year, Rhode Island taxpayers are handing them $191,444. They’ve received more than $600,000 from us since 2012 — and more grants going back 35 years.

It’s called the Institute for Labor Studies and Research, and its grants have come from the state’s Office of Postsecondary Education.

I would echo Representative Patricia Morgan, quoted in the article; no value is given to the state by these ill-spent tax dollars.

By the way, the tax status of this non-profit probably should be reviewed as, by its own admission, it appears to be violating federal tax law.

They even offer classes on how to file a grievance, appeal a denied disability pension and lobby on union issues. That last one’s odd since nonprofits aren’t supposed to be political, but ILSR is so blatant that one of its courses teaches “collecting money for political campaigns.”

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A Political Business Network That Puts Businesses First?

Increasingly, over the years, I’ve become disenchanted with and cynical about groups that are supposedly active in politics to support businesses and the political philosophy that allows them to thrive without micromanagement from government officials.  A sampling of reasons:

  • When legislators placed a representative of the Greater Providence Chamber of Commerce on a commission to study the reduction or elimination of the sales tax, his most notable contribution was the opinion that it would be “a crime to threaten” a government revenue stream.
  • When the RI Center for Freedom & Prosperity proposed ways to reduce state spending by nearly a quarter-billion dollars (perhaps to invest in a sales tax cut or some other pro-growth policy), the RI Hospitality Association went to bat for big spending, mostly to maintain the annual six-figure sums the association receives from the state.
  • When it comes to the state government spending over $100 million to get a government-run health insurance broker off the ground, the Cranston Chamber of Commerce joined with socialists in looking forward to the ability of government agents to take over health care completely (which is becoming more obviously the motivation as ObamaCare and the insurance exchange prove to be costly and under-performing debacles).

As I’ve summed it up multiple times, Rhode Island’s public square doesn’t have groups that advocate for constituencies — in this case, business groups that pressure government for the benefit of members — but a network of insiders who represent the government to their members.  The “business voices,” and even most of our elected representatives, depend mostly on their government connections and unerringly put those connections before the well-being of the people they’re supposed to be representing.

Hopefully, cynicism can be healed with a group, like the Gaspee Business Network, that does exactly what we used to assume the chambers and other groups were doing.

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Tolls Having a Toll On Voter’s Opinion of State’s Future?

Interesting results from a poll commissioned by Bryant University’s Hassenfeld Institute for Public Leadership and carried out by Fleming & Associates. Rhode Islander’s view of the state’s future is trending downward.

A new survey of 403 registered Rhode Island voters shows only 31% think the state is heading in the right direction, while 50% now say it’s headed in the wrong direction. Less than a year ago, in September, it was a different story – voters were evenly split, with only 40% saying the state was moving in the wrong direction.

It is notable that this trend started in September when the state’s economy (purportedly) was improving. Could this public pessimism be a result of General Assembly leadership jamming through Governor Raimondo’s highly destructive toll plan last session? Pollster Joe Fleming lists that as one of the potential causes.

Fleming suggested voters are less concerned with the economy as it’s improved but have been alarmed by controversies at the State House such as the debate over truck tolls, the tourism campaign debacle, and the resignation of former House Finance Committee Chairman Ray Gallison amid a law enforcement probe.

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Gencarella – Small Steps on Smith Hill Don’t Match Mood of Disgruntled Residents

Excellent, detailed op-ed by Pam Gencarella in yesterday’s GoLocalProv which, at one point, echoes my thoughts. We are grateful that leadership at the State House is entertaining an ethics bill. But it is only one item on a long list of reforms that need to come to state government.

So while ethics reform and an audit of legislative grants may be the first steps in addressing the crisis in confidence that all Rhode Islanders are feeling, much, much more must be done before taxpayers will have any faith in this government. The Speaker, the Senate President and the Governor have a long row to hoe in attempts to win the hearts and minds of its citizens. The problem for them is there’s only about a month and a half left in which to make a dent in our battered psyche. The fortunate thing for us is that November is not that far off.

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A Big Lesson We Shouldn’t Learn the Hard Way

I get the feeling that the world is preparing to teach us a very big lesson, and we’re insisting on learning it the hard way.

In the years before the Soviet Union collapsed, celebrities began slipping through the Iron Curtain for performances.  One product of that pop invasion was Billy Crystal’s “Joke-nost” special in 1989.  In one comedic sketch from the show, Crystal buys his way into a fancy restaurant by slipping the maitre d a roll of toilet paper.  The Soviet system — communism or socialism, as you like — couldn’t allocate resources well enough in a modern world to ensure the production and/or import of simple basics.  We’re seeing the same thing in Venezuela, now.

Those of us who enjoy the huge benefits of the modern world should think about the implications.  With the outbreak of yellow fever in Africa, health experts are worried there will be a shortage of the vaccine.  A nation’s having to find some alternative means of cleaning itself after using the toilet may be funny; a nation’s having to find a way to deal with people who have blood coming out of their eyes, not so much.

The losses of socialism aren’t just things that we know exist and can’t seem to get, of course.  As Glenn Reynolds writes, we can only guess at the cures and innovations that we might currently have were it not for government’s insistence that it should act as a corporate board for all economic and social activity:

I think it’s mostly true that things are stagnating compared to the century, or quarter-century before 1970. Some of that is simply because we’ve snagged the low-hanging fruit: You can only invent radio once. But I think there’s more to it than that.

In the United States, which drove most of the “golden quarter’s” progress, 1970 marks what scholars of administrative law (like me) call the “regulatory explosion.” Although government expanded a lot during the New Deal under FDR, it wasn’t until 1970, under Richard Nixon, that we saw an explosion of new-type regulations that directly burdened people and progress: The Clean Air Act, the Clean Water Act, National Environmental Policy Act, the founding of Occupation Safety and Health Administration, the creation of the Environmental Protection Agency, etc. — all things that would have made the most hard-boiled New Dealer blanch.

As Reynolds goes on to point out, this focus of power made people in and near government very wealthy.  Now, they’ve locked in their positions to make the new regime nearly impossible for the people to challenge.

But nature can challenge it, and the biggest thing that the aristocrats will have socialized isn’t production or benefits, but the pain for their folly.  It would be better to learn the lesson through observation and reason.  Unfortunately, from the Rhode Island General Assembly to the 2016 presidential race, we’re probably learning that that isn’t going to happen.

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Hiring of Director of Food Strategy is Governor Raimondo’s Econ Development “Let Them Eat Cake” Moment

Yesterday, Governor Gina Raimondo announced her pick to fill her newly-created position of Rhode Island’s “Director of Food Strategy”.

The state’s economy is in serious need of substantive improvement measures. (Pre-emptive note: taxpayer subsidies aren’t the answer.) There are good government measures that could benefit from her bully pulpit. But what is Governor Raimondo doing instead?

She is taking her time and state resources to create a state “Director of Food Strategy”.

Unbelievable.

There is a meme on Twitter and elsewhere that refers to the Governor as a queen. I don’t agree with it and have not retweeted it, in part, because I’m not a fan of name-calling but mainly because I simply haven’t seen her as a queen. Nor do I now.

What is clear with the creation and filling of this new state position, however, is that, like Marie Antoinette, Governor Raimondo is stunningly out of touch with the needs of the state and people whom she leads.

In an op-ed in yesterday’s GoLocalProv calling out the Governor on misguided priorities, Representative Patricia Morgan raised a good point.

In my life, I have found that the things people care about most are the things on which they spend the most time and energy. We thought the Governor cared about Rhode Island. Instead it feels like a bait and switch.

The creation of a “Director of Food Strategy” (job description here) is the latest – and most outrageous – instance of the Governor spending her time and energy on matters very much OTHER than the best interest of the state and its residents.

Rhode Island needs the Governor to adjust her focus. If simply doing the right thing isn’t sufficient motive, then how about for the more pragmatic one of improving job approval numbers?

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Letter: Don’t Add Superman Subsidies to the Taxpayers’ Tab

Well said by Catherine Orloff in a letter to yesterday’s Providence Journal. She uses the word that occurred to me: bailout.

Sure, a rehabbed “Superman” building would be great. But whose job is it: the owner’s or the public’s? …

No way should all Rhode Islanders be forced into yet another bailout.

Indeed, the public – a.k.a., the taxpayers – already has far too many costly problems on its hands, the vast majority inflicted on us by bad decisions and poor policies on the part of our elected officials. We don’t need to add yet another in the form of a bailout for the out-of-state owner of the Superman Building.

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One-Trick Pony Commerce Corp Continues To Hand Out Tax Dollars in Lieu of Real Reform

The Providence Journal today has not one but two articles about more money handed out last night by the state E.D.C. … er, Commerce Corporation: $1.9 million in tax credits to A.T. Cross, purportedly to prevent them from leaving the state, and $750,000 in grants to seven (it looks like) entities – some of them for pretty quizzical uses, by the way.

What Rhode Island needs to bring businesses and jobs here is real reform to its business climate by easing up the regulatory and tax burden on businesses. But neither the Commerce Corporation nor its boss, Governor Gina Raimondo, are undertaking this critical work. They choose instead to pretend they are accomplishing economic development by handing out hard earned tax dollars.

No one who pays even a little attention is fooled. The Governor’s robotic mantra of “I’m focused on creating jobs jobs jobs” is completely hollow until she and her agency take concrete actions to back it up.

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“YouGottaBeKiddingMe” about Former Chief Marketing Officer’s Severance Pay

Thanks to the Providence Journal’s Ed Fitzpatrick for making the severance pay of Governor Raimondo’s former Chief Marketing Officer the subject of his “YouGottaBeKiddingMe” today.

… Betsy Wall, who stepped down amid the state’s “Cooler & Warmer” slogan fiasco and who didn’t know Gaspee Days from “Happy Days,” is going to get $67,500 in hard-earned taxpayer dollars as severance after a little more than three months on the job? You’re telling me that an “at-will” employee with no contract will receive that much money on top of the $39,173 she was paid through April Fool’s Day?

Nice! At Governor Raimondo’s direction, Betsy Wall will receive more in severance pay than she earned while she was employed by the state.

Note that rather than a blanket omerta, Wall’s termination agreement includes the cleverly phrased stipulation that all parties will refrain from making any “disparaging comments”. As much of the tourism campaign was a “hot mess”, to use one of Fitzpatrick’s terms, and clearly worthy of many disparaging remarks on all sides, this will prevent any uncomfortable truths – i.e., accountability – from coming out about the failed, $5 million campaign – at least from Wall or Raimondo’s staff. Fitzpatrick correctly alludes to the fact that the rest of us are not party to the agreement, however, and are certainly free to make disparaging remarks – as we have done and will continue to do about this and many other instances of tax dollars squandered by the Raimondo administration.

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Smith Hill Leaders Backtracking on Even Partial Toll Relief for Truckers

Well, well, what a shock. Governor Raimondo and Speaker Mattiello are backing away from even partial relief for in-state trucks from the onerous burden of tolls.

“I don’t know if there will be assistance for truckers per se, but certainly in the process of doing [truck tolls] we heard from a lot of truckers,” Governor Raimondo said Tuesday in a lunch briefing with reporters. “They have unbelievable turnover in the industry. It is expensive to train people. We are listening to people and if there is something we can do we are open to it.”

Pressed about whether direct financial assistance is still the focus of efforts to help the industry, Raimondo said, “I am not sure.”