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31

RI Population: Starting Saturday on a Worrying Note

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

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

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

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

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

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

RI-childrenpoverty-2009-2013

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

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

32

Competing Paternalism and RI’s Death Spiral

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Kevin Williamson gives some interesting thought to getting people from welfare to work.  The contrarian hook is that he’s coming out in favor of more employer paternalism and perhaps even something resembling the old company-town model.  But the upshot is an encouragement to out-of-the-box thinking.

Why not, for example, change the structure of unemployment insurance?  Rather than have a possible total on which the person can draw down until it runs out, let the person get some percentage of any unused balance as a lump-sum check after he or she finds (and holds) a job.  Now, I can think of a number of potential pitfalls to such a policy, but it has some beneficial features.  For one, it could flip the natural human impulse to strive for the biggest nut one can get; whereas, now, the unemployed person can feel as if he or she is losing out on “free” benefits by finding a job too quickly, that person would, instead, feel as if he or she is losing a bonus with each week’s small check.

Williamson’s focus, though, is the possibilities of the large check.  A person could pay off a lot of debt with a big check, including debt that he or she accumulates while preparing for, easing into, or relocating in order to find new work.  This brings to mind a quick item I posted in 2007, titled “Go West, Young Welfare Recipient.”  At the time, employers in Montana (among other places) were raising low-end salaries quickly because they couldn’t secure enough workers, so I suggested that we should stop contributing to low-skilled workers’ inertia in our struggling Ocean State economy and instead direct them west.

Williamson likewise takes for granted the desirability of having people relocate for work.  That’s where I think he misses a big, important piece of the puzzle.

As I observed a few weeks ago, with reference to Lawrence, Massachusetts, governments and their economic satellites are deeply invested in the notion that nobody should move beyond the reach of their own paternalism.  This paternalism may be expressed in charitable terms — “People shouldn’t have to leave their homes in order to make a living!” — but it’s ultimately self serving.  If Rhode Island were to have fewer needy people for any reason, but especially because they moved to other states with jobs on offer, then Rhode Island’s government-and-service complex would have to shed jobs and power.

Once again, we come to the same ol’ prior problem.  We need government that responds to the real needs of the people who live within its boundaries, not the institutional needs of the government, itself.  Unfortunately, those who prioritize the latter have much more incentive to be politically active, and the system has therefore become rigged.  As a result, people who are unable to make Rhode Island work for them and who don’t want to become dependent on government become the ones to leave the state.

This is what people mean when they talk about “a death spiral.”

33

Government Built on the Principal-Agency Problem

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Writing on the quagmire of President Obama’s foreign policy, Richard Fernandez introduces a term that describes very well the challenge I observed on Friday, in Lawrence, Massachusetts, and in Rhode Island:

To understand how defeat can be winning  recall the old principal-agent problem. “The dilemma exists because sometimes the agent is motivated to act in his own best interests rather than those of the principal.” Even though the people might gain more by “winning” if the political class can do better by “losing” then they lose.

The Wikipedia entry to which Fernandez links for a quick explanation places at the core of the dilemma the fact that the agent (say, a corporate board) has an advantage in information over the principal (e.g., shareholders).  The board can better see the conditions of the investment and may find itself in a position in which recommending one path would pay off for the shareholders, but cost the board.

In the case of government, the asymmetry of information certainly exists, but the greater problem is the asymmetry of power.  In theory, of course, government agents must convince voters that public actions are in their best interest, which is an information issue, but the government has the advantage that direct consent is not immediately necessary, so its persuasion can be done post facto.  ObamaCare would never have won a national referendum, but imposing it and then manipulating asymmetrical information has kept it lumbering along.

The Greenhouse Compact failed in Rhode Island because it came to a vote of the people, while RhodeMap RI insinuated its way into law and now can continue based on the false information that it’s simply sitting on a shelf, or the even more obvious stratagem of changing its name.  Remember that Governor Raimondo used a refinancing gimmick to produce the $80 million needed for part of her plan without the requirement of public consent, and some of her wealthy backers are helping to fund some of the planning stage, perhaps with reinforcement from the Boston Fed.

Decisions are being made that will affect every part of your life in Rhode Island.  You still have time (theoretically) to change the people making the decisions or to take their authority away for specific actions.  Many have already concluded that the only way to escape their authority is to leave, although the disinclination to stand up against them does not bode well for the hope that their approach won’t spread around the country and the world.

34

A Lesson for the Fed’s Intended Involvement in Rhode Island

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The Boston Fed cites Lawrence, MA, as an example of success for the program that it would like to bring to Rhode Island. That struggling city is actually a great case study in why Rhode Islanders should resist the Fed and any other top-down program to save the state.

35

That Old Small-Minded Racial Thinking

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Reading Lawrence Proulx’s observations in yesterday’s Providence Journal, one can easily predict what sort of reaction he’d be apt to get:

In my work, I read one of the world’s great newspapers; in my leisure time I read other general-interest papers and magazines. And I have slowly gotten the impression that white people and men are treated in a particular, unenviable, way. They are, in reporting and commentary, what you might call fair game. Where writers are generally reluctant to call attention to the sex, ethnicity, religion or race of people when the result would be unflattering, they make an exception for whites and for men. There is something in the air that implicitly imparts the message that white people and men have it coming.

One comment to a related Facebook post from commentary editor Ed Achorn captures the flawed thinking of the racist worldview that lumps people together based on the color of their skin:

… complaining that white men are being treated unfairly is absurd. Take a look around this room and tell me what you see. Especially on the Republican half of things.

The appended picture appears to be from a state of the union address to Congress.  The reasoning is: It can’t be that white men are treated unfairly when there are so many of them in power.  The problem is that, while white men dominate in Congress, a vanishingly small percentage of white men are Congressmen or Senators.  By definition, most white men are not members of the elite.

What the American elite (which is overwhelming white) has done by permeating our society with the anti-white bias about which Proulx complains is to reduce opportunity for lower-class whites.  Those who are surrounded by privilege have opportunities no matter their sex or race; those whose families and associates are not so well positioned need to find opportunities where they can.  Dividing the playing board by race ensures that those who lack opportunities are the ones who pay the dues for their race.

If it’s true that white men of all classes have advantages over others in their own classes, then racialism impedes the greatest competition facing white men in upper classes.  I’m not so sure the racial assumption is true, though, which means racialism allows elites to help out their privileged peers of other races by way of denying opportunities to those whom they’ve demonized.

38

About

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The Ocean State Current In Fact The Ocean State Current is the independent, nonpartisan news and commentary bureau of the Rhode Island Center for Freedom & Prosperity. Its mission is to leverage online multimedia to ensure that a well-informed public has the breadth of information required for healthy self governance.  To further that mission, the […]

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