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A Lesson on Public Policy and Economics in Tolls

It occurs to me that some people might respond to my example of the $40 round trip for me to drive from my house to Woonsocket under the RhodeWorks toll scheme with two points:

  1. You don’t drive a large commercial truck.
  2. Almost no large commercial trucks are likely ever to have a reason to drive from Tiverton to Woonsocket and back.

Let’s put aside the correction that my calculation would apply for anybody in any town to the east of the Seekonk River who wouldn’t go over the Newport Bridge. A more important principle depends on not getting bogged down in specifics because it has to do with opportunity costs.

So, yes, it’s difficult to think of a reason a large truck would have to do a lot of traversing of Rhode Island from Tiverton, although there are such industries as stone and soil delivery, lumber delivery, boat building, and seafood. By implementing a toll, the state government makes it that much less likely that any business needing to make such a trip would set up shop in Tiverton, even if this were otherwise an attractive location. That’s almost $15,000 per year if one truck makes the trip each day, and with the constant threat that the state will just ratchet up the toll. After all, the gas tax now adjusts for inflation, and the governor’s budget calls for school funding from local taxes to adjust for inflation, as well. How likely is it that the $15,000 won’t adjust, as well?

Perhaps businesses that are already in operation won’t find it worth their while to up and leave the state or just change their behavior over tolls (although we’ll see), but most of planning for the future involves creating space for new activities and new innovations. When it comes to making new decisions, whether for an existing business or a new one, that map of tolls will certainly come into play. Back when the Sakonnet River Bridge was in the crosshairs for tolls, local state representative John “Jay” Edwards (D, Portsmouth, Tiverton) repeatedly declared that “a toll is a barrier.” Apparently, he and his peers are not so convinced that 14 tolls are a barrier.

The references to other states are significant, here. In general, tolls are applied to one road on a long stretch. Governor Raimondo’s web of tolls designed to capture all movement around Providence are a peculiarly Rhode Islandish and ugly image.

Now take the idea of that toll and add it to every other thing that Rhode Island does to make itself less friendly for businesses and innovative economic activity. Governor Gina Raimondo has led the way declaring that the state needs to spend taxpayer money on innovation, but what she means is that we must tax everybody and give government a slush fund so it can help chosen companies overcome our unnatural barriers.

If we really want Rhode Island to find sure economic footing for the future, what we have to do is stop creating barriers for those investments and innovations that we can’t predict.


Mapping Out the Tolls

Just for fun, I took the proposed toll amounts that Ted Nesi tweeted out earlier and put them on a Google Map. If I did this right, you should be able to click the toll locations and see the amount highlighted.

The RI Dept. of Transportation and toll supporters (most of whom represent interests that will benefit directly from the money or are otherwise entangled with state government spending) want it all ways on this matter. On the one hand, they argue that the state must have this new revenue or there is no way to repair roads and bridges. On the other hand, they point out (as at the House Finance hearing) that even if the tolls produced no revenue, it would “only” reduce the amount of money available for repairs (as in, no big deal). This applies on the individual level, implying that nobody will have to shoulder too much burden, but then emphasizing all the money they’ll collect for infrastructure.

Review the map and think like a trucker on routes with which you’re familiar. For example, traveling from my house to Woonsocket would cost a trucker $40 round trip. Taking an alternate route of routes 24, 495, and 126 — which I’ve done anyway, particularly during certain times of day — would cost $0. Zoom out on the map, and one can see just how easy it would be to avoid Rhode Island, or to only enter it where necessary.

In contrast, depending where trucks start out within Rhode Island, a round trip, say up 295 and down 95 would amount to less than an hour of driving yet cost around $30 in tolls. And that’s before RIDOT decides to start ratcheting up the tolls for more and more money.


Testimony on Avoiding Tolls and Debt with a P3 PayGo Plan


Good evening. My name is Justin Katz. I’m the research director for the Rhode Island Center for Freedom & Prosperity.

The amazing thing about infrastructure, and this whole issue, is that we’ve got roads that need repair, we’ve got workers who want to repair them, we’ve got a public that wants to pay to fix the roads — the problem is we’ve got special interests who already have the money we’re already paying to fix the roads that won’t let us do it. They’re holding that money hostage; they’re holding our roads hostage and holding the jobs hostage, saying, “You can’t do this unless you come up with new money somehow in your economy to fix this problem.

It brings to mind, actually, something a former chairman of this committee said recently, Steven Costantino, when somebody had suggested that he was in on the scandal of 38 Studios, and he said, “Well, look, I was just doing what I was tasked to do by my superiors,” meaning legislative leadership. That’s not how representative democracy works. The people upstairs are not your superiors; the people in Rhode Island are.

So, I’m basically here to give you the message that you have options. Don’t expect that you’ll be able to go out and say, “We had to fix the roads.” A lot of the benefits everybody agrees on: We need new infrastructure; we need repairs; we need maintenance. Don’t expect you’re going to be able to go out and say, “Well, we had to do it, and this was the only option,” because there are other options.

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On Businesses’ Tilting Leftward

Aaron Clarey suggests brainwashed GenXers and their lack of new ideas are to blame for the seemingly inexplicable imbibing of leftism among a new generation of corporate leaders:

… the strategy here is something very simple and one politicians have been using for years – divide and conquer. Of course corporations and their newest generation of “leaders” don’t really want to “conquer” anything. They just want to sell their wares. But reliably and predictably, despite all claiming to be “independent minded,” the brainwashing in school and college worked. Today’s business leaders really do think taking political positions on race, sex, privilege, the environment, etc., is a genuine and effective business strategy. They think bragging about how they hire “minorities” but not “the best” is a long term managerial strategy. They think donating 5% of their pre-tax profit (because a corporate tax rate of 40% just wasn’t enough) will win people over.

Alas, this is the newest generation of business leaders. People who use “fads,” “political correctness” and “leftism” to sell their products. And if you thought the Baby Boomers were bad business managers, just wait for these over-educated, political-correct-crusaderist Gen X’ers to fully be at the helm.

Ed Driscoll broadens that view (without the generational dynamic) suggesting something more like a cultural feedback loop. I’d argue it’s more an all-of-the-above phenomenon. Corporate executives and boards who take truly inexplicable left-wing stands are like weaker predators imitating their alphas without knowing why.

The actual strategy behind it all derives from the reality that it’s a better bet to be on the side of an elite that’s inexorably building an anti-democratic machine with the purpose of bringing all of society under government and limiting the ability to change government itself than on the side of a disorganized population that’s too distracted and apathetic to put an end to the usurpation. The progressive movement filters this central objective through the various lenses of “green” fads, identity politics, and anti-traditionalism to distract, divide, and disrupt the public, and naturally corporate types aren’t immune.

The less-savvy among them pick up the virtue signaling (that is, the practice of taking supposedly virtuous stands in order to be seen taking them) without understanding the underlying motivation. They sense that leftism is to their benefit, but they haven’t quite figured out why, in the crass terms of cronyism.

Those who move on to bigger and better things in the corporate world will figure it out soon enough, though. And those who don’t, or who resist it on principle, will be held back by their wasteful progressivism and unable to compete.


Raimondo’s Putting It Right in Your Faces, Rhode Islanders; React to It

Every day, it seems, we get more evidence that Rhode Island’s ruling elite are done with pretenses about how they believe our system of government should work. It could just be, of course, that they aren’t sufficiently self aware — or sufficiently inclined to think about the consequences of their own demonstrated political philosophy. In that case, though, I wonder why the news media and activists aren’t calling them on something to which we all obviously need to be attuned.

Here it is, with everything short of a highlighting, slipping right by in Ted Nesi’s summary of Governor Gina Raimondo’s appearance on Newsmakers, this week:

As for all those companies howling [about truck tolls], Raimondo said state leaders “are very open to the possibility of coming up with an economic package that would take these concerns into account.” Keep an eye out for that.

This is nothing more nor less than admission that state government is more than happy to create loopholes and buyoffs for companies that are able to bring enough political heat. This is exactly Rhode Island’s core problem, politically and economically. If you can’t get a special deal from the state, you’re out of luck. (And, by the way, special deals can come in the form of hindering competition.)

Since this apparently isn’t obvious to everybody, let’s think it through: The state imposes tolls on large trucks. Either collectively or individually, businesses that are particularly hard hit appeal to the politicians, who craft specific carve-outs elsewhere in the budget — money taken from one pocket is simply placed in another. In order to place money in the second pocket, the government either has to redirect funds from other purposes (mainly by draining down the general fund) or come up with yet another source of revenue.

Why would politicians want to operate this way? Because they get to be the check point. The businesses are now reliant on the politicians to keep the special deal in place, and everybody else sees quite clearly that bowing to the politicians is a necessary part of operating in the Ocean State.

Postscript: For some reason I don’t understand, WPRI reporters Ted Nesi and Tim White let Raimondo repeatedly get away with the untruth that the tolls are capped at $20. Unless I’m missing something, the legislation is quite clear on this point: The $20 cap is on one truck going one way across the state, all on Route 95. These are truly the out-of-state trucks that everybody claims they want to target. The actual cap is double that — $40 during a full day.

It’s especially rich that Raimondo repeats this untruth so frequently, considering that she accuses truckers of lying about their likelihood of rerouting.


Experts Who Miss the Obvious

A Sunday Providence Journal article by Kate Bramson is worth a quick look by way of raising the question of why experts seem to miss the obvious. A few quick hits, starting with this, from “labor economist” Paul Harrington:

“Older workers are going to retire at some point or other, and it’s going to be followed by a generation with less labor-force participation and less work experience” than earlier generations had, Harrington said. “To me, figuring out, ‘How do I get work experience for young people in urban areas?’ — that would be a top priority.”

This isn’t a difficult problem. Eliminate the minimum wage, lighten up mandatory benefits for employees (including both those imposed as regulations and those imposed as entitlement taxes), and end policies that attract low-skilled workers from other countries. Rather than non-living-wages for legal and illegal immigrants, you’d have additional spending money for lower-income households and young adults with work experience.

Then there’s this, from University of Rhode Island Economics Professor Leonard Lardaro:

“We’re much more about the here and now, and we never allocate enough resources for investment,” Lardaro said. “The result? Our physical infrastructure — roads and bridges — are among the worst in the country. The skills of our labor force are nowhere near what we need…. We have to be much more of a society that allocates toward investment, and we’re avoiding it.”

Various data points make this hypothesis suspect. We already spend a great deal on education, for example, which is ostensibly done as an investment. Meanwhile, younger “productive class” Rhode Islanders are leaving the state, which indicates a willingness to risk a little short-term discomfort for a long-term improvement. Even if we look at insiders, we see long-term thinking: The labor unions fight for things like longevity, and pensions are a central focus of their activism, while insiders put in some years of long hours and relatively low (or even no) pay on various boards and councils or in the legislature, with the expectation that they’ll be able to cash out with a cushy patronage job or benefit in some other way.

The people who set Rhode Island policy do plenty of long-term thinking. The problem is that we allow them to use government to serve their own interests. Fix the general mindset that such systemic corruption is acceptable, and the state’s seemingly intractable problems will begin to clear up. Unfortunately, the Raimondo-Mattiello Era is proving to represent a mad dash in the opposite direction, leaving us only the hope that the dash indicates a sense that we’re almost to the point of collapse.


AAA Southern New England Becomes a Political Action Committee

As a AAA member since 1992, when my late mother insisted that I join, I was disappointed (to say the least) to see WPRI’s Ted Nesi tweet, during a long RI Senate hearing on Democrat Governor Gina Raimondo’s toll-and-borrow infrastructure plan, that AAA Southern New England is officially in favor of bringing widespread tolling to Rhode Island.

When the roadside-assistance organization released a poll, recently, showing that a relatively narrow majority of its members support Raimondo’s RhodeWorks plan, I was willing to let it slide as purely an information activity, even though people with whom I agree on the issue suggested that it had essentially been a push poll that obscured the difference between supporting road repairs and supporting tolls. (N.B., I was not polled.) Sending a lobbyist to actually put the organization on a particular side of the issue is an entirely different matter.

According to the Secretary of State’s Lobby Tracker, Lloyd Albert, the Senior Vice President of Public & Government Affairs for AAA Northeast whom Nesi had named as offering testimony, collects $100 per hour to lobby in Rhode Island. Another lobbyist for the company, Mark Shaw, collects $150 per hour. Some portion of my most recent membership check, in other words, went toward paying Mr. Albert to argue for a major government revenue grab that I believe will be terrible for the state.

Of course, even if my money all went to Albert, it wouldn’t have covered a full hour of hanging out at the State House. The state government, by contrast, gives AAA enough money to have covered its entire $21,000 lobbying bill last year. According to RIOpenGov, the state Dept. of Administration paid AAA an average of $21,222 per year from 2010 through 2014. According to the state’s transparency site, the Governor’s Workforce Board began giving AAA Southern New England thousands of dollars a year, as well, in 2014 — $18,100 in fiscal year 2014, $500 in fiscal 2015, and $8,523 so far in fiscal 2016.

Yesterday, I noted that the private-sector groups that should offer some counter-force to the agents of big government are next to useless in Rhode Island, perhaps because they’ve simply been bought off. It’s more important to the people at the top of these organizations to preserve their network with government insiders than to assert the interests of their members when they conflict with the government’s interests. Members and potential members should take this reality under advisement.


UPDATED: Frias Shows Raimondo Doubletalk on Taxes

One really has to go out of one’s way not to see evidence that Democrat Governor Gina Raimondo and the rest of Rhode Island’s political establishment is not interested in coming to correct answers so much as saying anything to get their insider deals over the (ostensibly) legal finish line. In today’s Providence Journal, Steven Frias notes that Raimondo’s friends at the Brookings Institution proclaim that “Massachusetts and New Hampshire show the way forward,” but gloss over the degree to which cutting taxes made a difference:

In 1979, the Massachusetts High Technology Council (MHTC), a trade association of high-tech companies, declared that the “single most important step to stimulate the growth of the high technology industry in Massachusetts is real tax relief.” MHTC explained that the “higher cost of living and doing business in Massachusetts can no longer be offset by the proximity of MIT or Boston’s active venture capital market, or the cultural and environmental amenities.” Instead, MHTC insisted “Massachusetts must reduce the tax burden,” particularly for property taxes and income taxes.

MHTC and Citizens for Limited Taxation, an anti-tax grass roots organization led by Barbara Anderson, joined forces to support a voter initiative known as Proposition 2½. Proposition 2½ was designed to reduce property taxes and limit future property tax increases to 2.5 percent per year. To control spending, Proposition 2½ also repealed state laws that gave school committees fiscal autonomy and mandated binding arbitration for police and firefighter unions.

In passing, we should observe that Frias has hit on another of Rhode Island’s problems. Whether because of the state’s size or its long history of corruption, the “business backed” groups that should offer a counterweight to state government as the MHTC did in Massachusetts — think chambers of commerce, business associations, and RIPEC — have simply been bought into the insider system. In RI, they are now almost completely controlled by people with high (often six-figure) salaries who are more worried about losing access to the political font than losing ground for their members.

More relevant to the governor’s budget, though, is the tax-limiting reform: “Proposition 2½ was designed to reduce property taxes and limit future property tax increases to 2.5 percent per year.” Raimondo is headed in the opposite direction.

As I noted last week, her Funding Formula Working Group suggested getting rid of the legal requirement that local taxpayers must pay at least as much toward education each year as they did the prior year, instead requiring them to increase taxes every year for inflation and/or for enrollment increases. (The report did not suggest that this ratchet should go in reverse in times of deflation or dropping enrollment.)

I didn’t see confirmation in the governor’s budget documents that this provision made it in, and the budget legislation isn’t available, yet, but Lynn Arditi has reported that it is, presumably as part of the governor’s effort to make the districts’ complaints about charter funding go away by throwing more money at them.

Bottom line: The Raimondo-Brookings plan is an attempt to work around the problems we all know are destroying the state.

UPDATE (2/3/16 7:58 p.m.):

Well, there it is on page 167. Local taxpayer funding of schools must go up by the greater of inflation or the increase in student enrollment. Municipalities can still calculate the increase per student (to account for decreased enrollment), but inflation must still be included. (Of course, this per-student approach is tricky, because it’s not clear what number counts. If the district projects an increase, for example, even after years of decreases, does that mean the budget must go with the district’s estimate? In RI, the safe bet is that the answer is “yes,” if the district challenges the number.)


With Raimondo Budget 2.0, Welcome to Second Class Status, Rhode Islanders

Anyone who thought Rhode Island had reached its peak for governing in favor of special interests learned from Governor Gina Raimondo’s budget, released last night, that a whole new level exists. The overarching assumption is now that a few connected insiders in the state government, in nonprofit groups, from private companies and investment firms, and from Washington, D.C., think tanks and agencies can and should map a course for our shared future and spend our money to make us get in line.

“Nearly every item is directly targeted toward a particular narrow group of recipients,” said Justin Katz, research director for the Center. “It’s the kind of budget a chief executive puts forward when she doesn’t trust the people of her state to make their own decisions.”

In ways small and large, the vision of the budget is what one might expect to be crafted in the halls of the progressive Brookings Institution, with its recent report funded by private interests (mainly Raimondo donors), and the federal Department of Housing and Urban Development, which got its hooks into the Ocean State through the RhodeMap RI plan.

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When Government Messes Up, It’s Nobody’s Fault

Imagine additional tests find that the HPV vaccine leads to some major long-term side effect that was somehow not discovered during trials. The manufacturer would be targeted for lawsuits, to be sure, but what about the state government in Rhode Island, which has made it mandatory? I think affected Rhode Islanders would get a nice big “oops” from their appointed rulers, if that.

As Shikha Dalmia writes in The Week, families in Flint, Michigan, had the similar misfortune of being harmed by a government entity, rather than a private company:

GM had to pony up $35 million to NHTSA (National Highway Traffic and Safety Administration) and $900 million to the Justice Department in penalties for the faulty switch in its 2005 Cobalt that was linked to 125 deaths and 250 injuries. What’s more, despite the totally deplorable liability shield or immunity from personal injury lawsuits the automaker received from the Obama administration as part of its 2009 bankruptcy restructuring, it still paid $625 million in compensation to the victims. And of course it recalled and fixed all the 2.6 million affected vehicles. All in all, it was down $1.5 billion.

But Toyota coughed up more than double that amount for its suddenly accelerating vehicles that resulted in 12 deaths and 31 accidents. It paid $1.2 billion in fines to Justice and $35 million to NHTSA and fixed all the vehicles, of course. In addition, it made an out-of-court settlement for an undisclosed amount that was likely more than what GM paid to each victim. But the real kicker is that, because it did not have GM’s liability shield, it also paid $1.6 billion to all Toyota owners for the loss of the resale value of their cars.

Compare all of that to the $115 million or so that Flint victims will receive!

The main reason that they don’t have a prayer of collecting much more is something called the doctrine of sovereign immunity. Under this doctrine, citizens are barred from suing their government for screw-ups that it has caused in the course of discharging a core function unless the government itself consents. Some very narrow exceptions exist but it is very difficult to make them stick.

The longer one pays attention, the more difficult one finds it to understand why people would want government to be involved in more and more aspects of our lives. Why those who want to do things might look to do them through government is easy to understand. They merely have to convince a small group of politicians rather than a large number of customers, they gain access to government’s ability to regulate burdens on their competition, and they offload risk, whether that means financial risk (as with 38 Studios) or liability risk.

But everybody else loses out on the deal when government’s involved.


Airlines Another Specific Industry from Which to Learn

A literature professor of mine used to suggest that everybody (a group including at least the sorts of people taking college literature courses) should make one book their own — that is, study it in every particular, to the point that one can be confident about what the author brought into the work and hoped readers would take out of it and how he or she went about constructing it for that purpose. Back then, I gave Moby Dick that level of attention, and as I’m sure my professor expected, I’ve found that the effort has made it easier to repeat the process with other novels.

I recalled that literary advice while reading Josh Gelernter’s rumination on “How the Left Ruined Air Travel,” in which he concludes:

Air travel is bad because there’s no competition, because there are too few airlines, because there are too few airports, because the feds and city governments make big construction projects nigh-on impossible. So how do we fix air travel? We have either got to start building airports far enough outside of metro areas that labor-environmentalism is a non-issue, or conservatives have to start winning mayorships.

Until then, every commercial flight is going to be a little worse than the last. Buckle up.

As I wade through every bill submitted to the General Assembly so far this session, it occurs to me that every person who intends to engage in public policy in some way, even if only by voting, should make a point of picking some issue and making it their own. As with novels, it doesn’t count to come to a superficial conclusion and then stop digging when it appears to be affirmed. I suspect honest sleuths will tend to find that big government has played a substantial role in just about every modern problem… before that problem falls into the universal category of imperfect nature (and human nature).

Ultimately a pretty simple two-step error wreaks a great deal of havoc:

  1. The conclusion that complicated natural problems are solvable at a broad level leads people to grant power to a central authority empowered to do what is necessary to resolve challenges and balance interests.
  2. The existence of that authority acts as a magnet to parties that are especially interested in the subject at hand for reasons of personal interest, and they proceed to leverage it to improve their own circumstances.

If Non-Freedom Economic Development Doesn’t Work… Try, Try Again

Those who find Rhode Island’s governance maddeningly self serving, obtuse, and inept might have difficulty getting past the opening portion of this Sunday column by Providence Journal Assistant Managing Editor John Kostrzewa:

The difficulty of matching unemployed workers with available jobs, a problem called “closing the skills gap,” has bedeviled Rhode Island governors for decades.

Despite spending millions of dollars, the state still has tens of thousands of out-of-work or underemployed people and thousands of employers who complain they can’t find the help they need.

Now, Governor Raimondo is trying again.

She and Scott Jensen, her hand-picked Department of Labor and Training director, have started a new effort, called Real Jobs Rhode Island, that puts the design of skills-training programs in the hands of business managers who know what they need, not state bureaucrats. They already have handed out $5 million in grants to 26 teams of private companies, nonprofits, educational institutions and industrial associations.

In other words, to the list of now-discarded pretenses that used to allow us to pretend that we lived under a representative democracy, we can add the idea that government can take economic development on as one of its core responsibilities without undermining our free marketplace of rights and opportunities. No longer is the State of Rhode Island pretending that it’s confiscating our money in order to improve our neighbors’ capabilities. No, having failed to educate the public and having restricted our ability to make the economy work, the state is now simply confiscating our money to let businesses shape the population to their own needs.

Of course, the businesses aren’t alone in this. Kostrzewa also cites some progressives studies in support of the idea that the state should shift even more of its emphasis toward catering to the immigrant population that it has been luring here in order to justify its many social service programs:

“We need more resources focused on helping adults learn English so they can gain skills they need to support their children’s education and so they can get better jobs,” said Mario Bueno, executive director of Progreso Latino, in the report.

The referenced report is by the Economic Progress Institute, which Kostrzewa strangely characterizes as simply a “nonpartisan research and policy organization based in Providence.” He could have added that the institute is housed with a sweetheart rental agreement at the public Rhode Island College, after having been birthed (if I’m not mistaken) with funding from the private nonprofit Rhode Island College Foundation, which is currently under scrutiny for helping Governor Gina Raimondo hire a cabinet member outside the reach of the state’s transparency and ethics laws. The institute has also received funding from the state government and, as Kevin Mooney reports, is among the left-wing organizations supported by the Rhode Island Foundation.

Incidentally, Progreso Latino is also on the Rhode Island Foundation’s list of grant recipients, but its funding comes mainly from state and local government, having received over $600,000 from the state last year and almost $900,000 from the federal government.


Underlying the Brookings Economic Development Philosophy

One paragraph, in particular, is worth examination in an op-ed that Brookings Institution scholars Mark Muro and Bruce Katz published in the Sunday Providence Journal, yesterday:

[Rhode Island] needs to improve its ability to act. Currently, Rhode Island frequently undercuts itself with self-destructive turf squabbles and fragmentation. One response: Rhode Island leaders should create a formal Partnership for Rhode Island. Composed of top business and civic leaders, it would rebuild a collaborative ethos and channel private and civic capital and expertise into critical initiatives. State governments do not rebuild economies — people, as part of networks of public, private, civic and university institutions, do.

As my own recent Providence Journal op-ed suggested, the language the Brookings crew uses seems like it could dovetail nicely with the free-market view, but that’s a trickery of the language; the differences are massive and fundamental. Note, in particular, that they don’t write that people “rebuild economies” without limiting the term to those people who are “part of networks of public, private, civic and university institutions.” Sure, people in such networks grow the economy, but so do people out of them. Whereas a free marketer would suggest that people should be free to experiment and find the most efficient ways to accomplish what they want to accomplish, Brookings and the state government of Rhode Island are only comfortable allowing that to happen with the oversight of an established “network,” which they (or at least Bruce Katz) believe ought to put government at the forefront, leading on “what matters.”

The Brookings talk about “self-destructive turf squabbles and fragmentation” might also sound similar to principles espoused by some conservatives, but when conservatives use such phrases, they typically mean to indict the inefficiencies of government. Outside of government, in the private marketplace, “turf squabbles and fragmentation” are better known as freedom and competition. That’s what drives the economy forward, inspiring dedication and innovation.

All that stuff about “a collaborative ethos” that “channel[s] private and civic capital and expertise into critical initiatives” sounds good, but it glosses over the implicit necessity that somebody has to decide which initiatives are critical before directing “decisive” resources to it. (“Decisive” is the term used in the Brookings report.) One might call that a cartel.

In this context, Rhode Island isn’t an “it.” It’s an “us.” Our governor and her Washington, D.C., and Wall Street pals want Rhode Island to be an it, rather than an us, because they know they’ll be at the top of an it, making decisions for all of us.

Rhode Islanders and their representatives should decline to go along.


James Cournoyer: Tolls – Resist the Urge to Create a Big Bang Wrapped in the Worn Flag of “Economic Growth” and “Creating Jobs”

Dear Members of the General Assembly,

Please vote against Governor Raimondo’s and Speaker Mattiello’s Rhodeworks plan that calls for Tolls and more Debt.

RI may have the worse roads and bridges, but we are also saddled with one of the highest Debt burdens in the nation – both on a per capita basis and as a percentage of Gross State Product. We simply do not need more debt.

The Governor explained to us in October that the RIDOT, which has a stunning $450+ million budget this year, was “dysfunctional” and that they “never produced start-to-finish budgets and schedules”. That is precisely the reason our roads are in such disrepair. It is NOT due to a lack of funding; rather, it is due to a lack of planning and oversight, and gross mismanagement.

Tolls will simply add to RI’s already notorious national reputation of being “anti-business”.


Minimum Wage and the New Progressives

My first thought upon reading in today’s Providence Journal of Democrat Governor Gina Raimondo’s intention to continue Rhode Island government’s relentless push to redistribute money and make business more difficult by increasing the minimum wage and the earned income tax credit was that she has decisively proven that one can know how to make money appear from thin air and still not understand business or the economy. But then I followed a link in Jonah Goldberg’s weekly “newsletter” to a book review by Malcom Harris in the progressive New Republic. The book Harris reviews is by Princeton historian Thomas Leonard, mainly concerning the explicit racism and belief in eugenics of progressives a century ago.

Note these lines from Harris, with the interior quote from Leonard’s book (emphases in original):

Among his revelations: The minimum wage was created to destroy jobs; progressives (including the founders of this magazine) really did hate small businesses and they were all way too enthusiastic about Germany’s social structure. …

The minimum wage, in addition to providing some workers with a better standard of living, would guard white men from competition. Leonard is worth reading at length:

A legal minimum wage, applied to immigrants and those already working in America, ensured that only the productive workers were employed. The economically unproductive, those whose labor was worth less than the legal minimum, would be denied entry, or, if already employed, would be idled. For economic reformers who regarded inferior workers as a threat, the minimum wage provided an invaluable service. It identified inferior workers by idling them. So identified, they could be dealt with. The unemployable would be removed to institutions, or to celibate labor colonies. The inferior immigrant would be removed back to the old country or to retirement. The woman would be removed to the home, where she could meet her obligations to family and race.

As Goldberg points out, one could take modern progressives at their word that an impenetrable wall now exists between them and their ideological forebears when it comes to the racist motivation and still wonder whether they should consider that their erstwhile heroes might have been correct about the effects of a minimum wage.

I’d argue that the answer, as regular readers will no doubt recognize, is that progressives have not changed as much as they, themselves, would like to think. They still believe that, as Harris puts it, they are the ones who should lead all of society. They still want to identify and sort people into that inferior class. But they’ve realized that they can make use of the underclass as a weapon against the more-traditionalist, -motivated, and -individualistic middle, which is ultimately the threat against their elitist designs.


Whatever the Townspeople Think of Development, Subsidies Are Another Matter

Writing in the Sakonnet Times, Tom Killin Dalglish previews a meeting between the Tiverton Town Council and Legacy Venture West Development on Monday (January 25) to discuss details of its interest in a large shopping center on the largely vacant Tiverton Industrial Park land owned by the town government:

The idea of an outlet center was first broached publicly at a council meeting in late November, when Legacy Venture West Development (Legacy Development) of Kansas City and the Town announced they had reached a “stand still” agreement on Nov. 23.

That agreement allows each side an exploratory period of 90 days to study the possibility — to do due diligence — without the risk of intervention by other potential purchasers.

If the whole deal goes through, Legacy and the Town of Tiverton have agreed to a purchase price for the acreage of $8.25 million.

Likely at the top of the list to be discussed by the Council and Legacy at the upcoming Jan. 25 meeting will be the level of public financing that Tiverton and the State of Rhode Island might be prepared to offer, and that Legacy might seek.

The first question that the town will have to answer is whether the proposed Tiverton Glen development on the other side of Route 24 ultimately met such opposition because Tiverton residents want to use town government to stop all large-scale development or because the specific location presented unusual problems, particularly traffic on Main Road. Additional subsidies that the developer might seek from town and/or state taxpayers will complicate matters.

Continue reading on Tiverton Fact Check.


Government’s Unsurprising Preferred Demographic

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.


Somebody Bites in I-195 District (Looking for Subsidies)

John Bender and Ian Donnis are reporting on RIPR that Wexford Science & Technology has signed a purchase and sale agreement for a couple of I-195 parcels:

Baltimore-based Wexford Science and Technology and real estate developer CV Properties have signed a purchase and sale agreement for two parcels of land and plan to develop a three-phase project on the vacant former highway land with research and development space, offices, hotel and residential space and other attractions. …

The cost for the parcels of land, (numbers 22 and 25) was about $6.6 million, according to Dyana Koelsch, spokeswoman for the I-195 Commission, the agency tasked with developing the land.

The company intends to request subsidies from the Commerce Corp.’s huge slush fund, created through a refinancing gimmick in Governor Gina Raimondo’s 2016 budget proposal. That detail, along with any tax deals from the city and state, as well as other details, will be important for evaluating whether the deal puts most of the cost and risk on the company or on Rhode Islanders. With construction initially expected to begin next year, it will also be awhile before the success of the business model is known.

With Wexford’s two lots gone, 14 of the original 18 parcels available on the land remain available. In total, Wexford’s purchase covers 27% of the land freed up by the highway rerouting, not counting that which is set aside for parks.


Getting a Sense of Rhode Island First

Brookings Institution scholars Bruce Katz and Mark Muro are on Newsmakers this week, talking about their new report giving tips to Rhode Island’s upper crust how to reinvent the state in their image.

That opening sentence is definitely contentious, but some of the things that the Brookings guys flew in from Washington, D.C., to say suggest that they believe the real fundamental questions that should be the right of every Rhode Islander to answer should actually be off the table.

For instance, Katz in particular attacks Rhode Island’s preference for smaller-level organizations, saying, “You’ve got a lot of parochialism here. It’s like 18th century government in the 21st century.” Stated without the insult, though, I think most Rhode Islanders would say that’s a good thing. The local-area distinctions are part of the state’s charm and ought to allow for more creativity in governance and economic activity.

Our problem is that insiders and special interests have sought to impose the 20th century progressive notion of the primacy of government, organized labor, and activists. That’s what’s killing our state. It prevents real diversity while locking in a sort of aesthetic parochialism. In other words, we can’t change the character of villages that the ruling elite like or take nest eggs away from established interests, and we can’t truly innovate in our lives… at least without persuading government to let us.

Such centralized social restrictions relate to Brookings’s repeated suggestion that Rhode Island (by which they mean the insiders and special interests) has to figure out “what we’re good at.” Even without access to its underlying research, it appears that the report should have concluded that Rhode Island government isn’t really allowing its people to be good at anything. Rather, they found a few very small niches that aren’t completely stultified — perhaps because of a localized connection to the insider system or simply based on the strength of a few individual personalities — and lumped them together so they’d fit in boxes that could conceivably be called “industry sectors.”

That’s not identifying unique capacities of the state; it’s reinforcing the principle that the very things that are actually holding Rhode Island back are the basic qualities that can’t be changed, leaving them only to be worked around. Indeed, mechanisms such as insider contests to hand out awards and grants for innovation are custom designed to ensure that nothing can happen without special interests’ say so.

Reading through the report, one can’t help but wonder if the progressives at Brookings looked at Rhode Island, saw the unavoidable consequences of their political philosophy, and layered on nearly 200 pages of analysis and proposals seeking some fancy policy maneuver that will escape the trap of reality.


Something Like a Conspiracy of the 1%

In one of those coincidences that I would call suspicious if I were absolutely sure nobody would take me seriously, my hard drive crossed the line to bad on the very day the Brookings Institution released its $1.3 million study of Rhode Island’s economic condition and prospects (via WPRI’s Ted Nesi).  These days, an unexpected computer failure is not unlike returning to my office to discover that corrupt and thuggish secret agents gave the room and files a quick-and-dirty look-through for some information they mistakenly believe I have implicating the Commander in Chief in a scandal that even the mainstream media couldn’t ignore, which is to say that I’m still putting things back together.

That said, I’m overdue for a post, and I’ve wanted to note a theme to which I’ll return in more detail in the Brookings report.  It initially appears on the very first page of text and pops up amid all of the analysis and jargon throughout:

Which is to say that Rhode Island—a small state in a large nation in a fiercely competitive world—is facing an existential choice about its future. Are the state’s business, civic, university, and government leaders prepared to think deeply and act decisively as their predecessors did in order to meet profound uncertainty with innovation and ingenuity? Or will they merely make the best of slow decline?

The italicized text tells Rhode Islanders who Brookings’s real audience is, and the audience determines the recommendations.  Unless I’ve missed it as I’ve read the report while waiting for the bars to reach 100% on computer diagnostics programs, the report’s authors do not once ask, or advise their audience to consider, what Rhode Islanders want their state to be.  We are irrelevant.  Worse, we’re widgets.  We need to be repackaged and reprogrammed for the benefit of the right kind of companies.  Our neighborhoods have to be redesigned in order to attract the “coveted millennials” whom the authors see as the spring blossoms of “coolness” and “hipness” (not to say “grooviness”).

As I said, once I’ve lifted all of my virtual filing cabinets off the floor and hung the digital pictures back on the walls, I’ll go into more detail, but there may be no better evidence that the next step in the progressive plan is intended to bring government and the industrialists back into alignment, coming full circle since the days of the robber barons, in order to assert their authority over us all and to protect their own power and interests.