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31

Trump Administration Gives Hope to Property Rights Advocates

Paul Mirengoff, of PowerLine, notes that Secretary Ben Carson’s Housing and Urban Development department (HUD) is moving in a direction that should please anybody who was concerned about the implications of RhodeMap RI:

Here’s a reminder of why [even Trump critics on the Right should be happy that he beat Hillary Clinton]. Yesterday, Housing and Urban Development Secretary Ben Carson announced that his agency will “reinterpret” the ultra-instrusive Obama housing rule known as Affirmatively Furthering Fair Housing (AFFH). The rule was designed by the Obama administration to seize federal control over local zoning for the purpose of creating neighborhoods that comply with the left’s race-based vision of where people should live. We discussed it here, among other places.

Secretary Carson didn’t say exactly how he plans to “reinterpret” AFFH. However, he told the Washington Examiner that he doesn’t believe in the “manipulation” associated with the rule or with the burdens it imposes on local communities. As a candidate for president, he called it “a doomed-to-fail attempt to “legislate racial equality.”

Mirengoff is right to subsequently warn that “reinterpreting” a rule is a softer protection than simply canceling it, but a step in the right direction is clearly better than a jump in the wrong one, which a different administration might have brought about.

That point, however, brings us back to an inexhaustible theme that conservatives must wake up reminding ourselves:  Our real work is cultural and in education.  As long as we continue to allow the Left to pervert the minds of younger generations as if they are invading aliens, the assaults on our liberty will return like a plague every decade or so, when the politic mood shifts.

32

Eminent Domain as a Stadium Negotiating Tactic

Ethan Shorey presents, in a Valley Breeze article, another wrinkle in the PawSox stadium issue that gives the whole thing a “not at this point, thanks” kind of feel:

There is now increasing likelihood that the city would need to pursue buying the property through the eminent domain process, where officials would have to make a convincing argument that the property is needed for the public’s good. …

Officials are seeking to “reach a fair, negotiated purchase with the owner of the Apex property without the necessity of a taking through eminent domain, but all options will remain on the table in order to ensure that the people of Rhode Island are not denied this important public venue,” said Grebien.

So, the property owner has offered a price that represents the value of the sale to him, and the city government is using its power to simply seize property as a negotiating tactic.  The mayor’s amplifying the idea that placing a stadium on this specific property is an “important public” good should make warning flags go up.

People who own any property that might conceivably be attractive to politicians for their investment ventures are on notice that the government ultimately believes the property to be its own.  Recall that the RhodeMap RI plan included maps that made no distinction between public and private property — simply putting down the planners’ vision with the assumption that the government would end up owning anything they chose.

One misconception that the government is conveniently promoting is that the value of the property is its assessment… by the government.  The value of a property is the point at which the seller’s desire to give up the property meets the buyer’s desire to own it.  If a particular piece of land is critical to a government project, the fact that the owner is negotiating with “the people” does not change this dynamic.

To the extent that eminent domain is sparingly reasonable, it’s to prevent abuse around real necessities.  A person who owns the last acre of land to complete an important roadway, for example, would have unreasonable leverage.  A baseball stadium simply doesn’t reach that level.

33

There are Better Solutions Than Rhode Island’s Status Quo Public Policy Environment

Does anyone trust that an elite cabal of political cronies should centrally engineer our economy? Or do we place more trust in the great people of Rhode Island to be able to unleash their suppressed capacity in a fair and free-market economy, via major tax and regulatory reductions across the board? The top down ideas being presented in the upcoming election would be harmful to our state. It is up to voters to decide for themselves if Rhode Island will be a place where our families can prosper.

There are many examples. We have proven in our Freedom Index that the status quo is moving our state in the wrong direction. Led by Rep. Patricia Morgan and Sen. Elaine Morgan, only 11 of 113 lawmakers earned positive scores on our 2016 Freedom Index. The Sheeple Index, released in partnership with WatchdogRI, shows that there is a dangerous pattern of lawmakers blindly following the leader.

34

Testimony: DEM Must Consider Economics Before Buying Farmland

In this video, I speak out against a new scheme by the Rhode Island Dept. of Environmental Management to acquire farmland at a public comment forum held at the URI Graduate School of Oceanography on September 7, 2016.

With government increasingly influencing and controlling the means of production through myriad tax-credit, loan, and direct-subsidy schemes in a multitude of industries, the DEM farmland acquisition scheme, which will actually acquire and resell private property, is not based on any legitimate economic analysis — or any economic consideration at all.

Despite the fact that the state’s own Commerce Corporation demanded a RhodeMap RI–related mandate be inserted into the DEM plan, no economic justification was provided. The Rhode Island Center for Freedom & Prosperity warned you about the dangers of RhodeMap RI; here is one place where the planners’ vision seems to be marching forward.

35

Funding the Fundamental Transformation of America

Periodically, I’ve noted ways in which the seemingly out-of-nowhere madness sweeping our nation has actually been funded from the top-down, largely with our own money.  My favorite example — because it was my own discovery, my first hint of the mechanism, and so clear a one — is PolicyLink, an activist organization largely funded through the federal government, sometimes indirectly (as when the state of Rhode Island was forced to hire the group as part of federally funded RhodeMap RI activities), that has used its resources in the past to fund research into transforming U.S. capitalism into far-left socialism.

Yes, there are billionaires funding the Left’s astroturf, such as Tom Steyer on environmentalism and the infamous George Soros, but a whole lot of the money comes from us, largely through debt that we’ll have to pay.  No billionaire can beat the U.S. government for spending.

I mention this today, because I’m going through bookmarks of links on which I never managed to post and came across this, from the Sean Higgins in the Washington Examiner:

Bank of America has been able to reduce a multi-billion dollar mortgage fraud penalty imposed by the Justice Department by giving millions of dollars to liberal groups approved by the Obama administration.

The bank has wiped about $194 million off its record $16.6 billion 2014 mortgage settlement by donating to nonprofits and legal groups. Thanks to little-known provisions in the settlement, the bank only had to make $84 million in donations to do that. …

Among the groups receiving the money were Hispanic civil rights group the National Council of La Raza ($1.5 million), the National Urban League ($1.1 million) and the Neighborhood Assistance Corporation of America ($750,000).

Our government does not represent us.  It is abusing us, and there’s no end in sight.

36

RI Foundation’s Sneak-Attack on Free-Speech

Should Rhode Islanders silently accept the corrupt political climate that has failed so many of us? Or should we, as free citizens in our uniquely American democracy, be encouraged to freely speak-out and engage in a battle of ideas so as to help make our state a safer and more prosperous place to live, to raise a family, and to build a career?

It is the Center’s primary mission to stimulate such rigorous public debate about important policy issues. However, the most powerful and wealthy nonprofit organization in our state is asking you to shut up.

As part of its own 100th year celebration, the Rhode Island Foundation this week published and promoted a video, which, in essence, encourages people to remain silent and to accept that the political elite know best about what’s in your and my best interests.

In what initially seems to be a video for kids, it is shameful that the Foundation hides its adult message behind children. With the frequent backdrop of our State House, it is obvious that the video is intended to be political. Under the pretense of “be nice or be quiet”, the Foundation is clear in its message that is directed to all of us – that we should just “stop complaining”.

Stop complaining about Rhode Island’s 48th place ranking on the national Family Prosperity Index?
Stop complaining that so many of our neighbors cannot find or have given up looking for meaningful work?
Stop complaining about the political corruption that continues to embarrass our state?
Stop complaining about the lack of bold and decisive action to do anything significant about it?

I don’t think so.

It is also despicable that the Foundation forces these children to read text that has to be bleeped.

37

Happy 240th Birthday To America!

Happy Independence Day from everyone at the Rhode Island Center for Freedom & Prosperity! As we celebrate the Fourth with our family and friends, it is important to reflect the principles that led to the American revolution. On this anniversary of the original Brexit, we must remember that “US-Away” happened because free people stood up to an imperial power and demand that their rights be respected. In our own time, people are standing up against the elites here in Rhode Island that want to micromanage our lives.

We should all be proud of our fellow citizens working to advance freedom here in the Ocean State. The recent opposition to the Brookings agenda is a good example. Because Rhode Islanders spoke out against RhodeMap RI and central planning, many of the crony corporate welfare deals were squashed before they could begin. The stadium deal and the superman building are two more examples of stopping corporate welfare in Rhode Island. There are reasons to hope. However, we must remain vigilant and continue to speak out. The political elites will continue to try to give special deals to their cronies.

When will the insiders learn? We are warning the status quo against seeking to devolve Rhode Island into a dependent appendage to the Boston economy, or to some other form of regional governance. The citizens of our state demand local control. Centralized plans are not the answer for the Ocean State. We urge lawmakers to reject the concept of a centrally controlled, regional bureaucracy that will infringe on the authority of locally elected officials. Rhode Islanders do not want intrusions into their own lives.

There are better solutions than the central planning of economies and the loss of local control. It is time to end the insider culture where the little guy suffers. As we saw in the recent Brexit vote, citizens are demanding more from their leaders. How many of us would say that the status quo public policy culture in Rhode Island is making anything easier on the average family? For too long, the political elites have thought they’ve known how to better run your life than you do. I encourage you to speak out against the status quo and remember that things can change here in the Ocean State.

And once again, Happy Fourth of July.

[Mike Stenhouse is CEO of the Rhode Island Center for Freedom and Prosperity.]

38

A Status Quo of Elitism


In this short video, I sit down for State of the State with John Carlevale to discuss the elitist attitude of the status quo in Rhode Island. When will the political class listen to the people of our state? For too long, the public policy debate has been one sided, and denied Rhode Islanders opportunity. The insiders want to keep increasing their big government policy, and refuse to hear other ideas. During the RhodeMap RI battle, the insiders refused to listen to citizens and put our homes at risk. Policy should be decided with many voices giving their input into the process. When many opinions are considered, we are able to craft more effective public policy. Rhode Island will have to change if our state is ever to become a place where people are free to achieve their dreams.

39

A Question of Leadership in the Governor’s Office

Is it me, or does it seem as if Democrat Governor Gina Raimondo and her collection of well-paid communications and public relations personnel have been sticking with the “stay positive and move forward” line a bit too much?  Whether the subject of controversy is tolls or a botched marketing campaign roll-out, it seems the line is, “We’re excited to be doing what our talking points say we’re doing, and we’re not going to hold back the state by responding to people with legitimate concerns now that we’ve won the political fight.”  In this case, spokeswoman Marie Aberger put it this way:

The Governor is excited we are moving forward with a coordinated, statewide, marketing effort to get our state in the game, drive tourism, attract business, and grow our economy.

She then goes on to suggest that all of the attention the mess-ups have brought to Rhode Island is a “bright side.”  After a year of having this face turned to it, the Rhode Island public would be justified in feeling as if the governor doesn’t quite subscribe to the “the people are the bosses” philosophy of representative democracy.

In fact, the public’s impression should go a bit farther.  Addressing the marketing controversy with Dan Jaehnig, Raimondo’s response about the outright error of using Icelandic video in the Rhode Island advertisement was inadvertently telling:

Look, [the production firm] made a mistake.  People make mistakes.  We’re going to hold them accountable.  It was a local firm.

As if it would be unreasonable to expect a local Rhode Island firm to do its job.  That’s the sort of redirection of blame one would give to investment bigwigs outside of the state, who might be sympathetic that the governor had to use some small local businesses for political reasons, and that some sacrifice of quality was to be expected.

That’s not leadership.  Leadership is not blaming the firm for failing to follow “explicit instructions.”  Leadership would be stating that mistakes happen and acknowledging that the bigger responsibility falls on the managers within the governor’s administration who didn’t check that their “explicit instructions” were followed by requiring the production company to explain from where in the state each and every clip originated.

But that sort of leadership might draw even more attention to Raimondo’s out-of-state hires, and it’s beginning to appear that Rhode Island’s governor is more invested in the competence of the national and international elite that puts her on a top-50 world leaders list than the competence of the people of her state.

This perspective permeates not only her public relations approach, but also her attitude toward policy.  The economic development vision of the Brookings Institution/RhodeMap central planners, for example, is for state, national, and international “experts” to design our communities for us and then push us toward careers that suit their peers in the private sector.  It starts with them, their beliefs, and their visions, forcing us to fit as best we can rather than starting with our dreams and capabilities.

40

Teppco Closure… Government Incompetence or Corruption?

On GoLocalProv, Russ Moore is reporting that the Teppco propane terminal in Providence is taking its 36 jobs and skipping town:

Nearly one year after being hit with a $1 million tax hike by the City of Providence, Teppco, a propane terminal located at ProvPort, has officially closed its doors. The company will cease doing business in Providence this week — a move that will cause its 36 employees to look for new jobs.

According to sources with the company and at the Port, the City’s tax increase was the major cause of the closure of the facility that has been operating since 1971. Moreover, the failure by city officials to respond and work to resolve the issues caused Teppco to lose a potential buyer that would have allowed the facility to continue to operate and retain jobs.

One doubts the fallout from this controversy is so narrowly limited.  Any business considering opening or expanding in Providence or all of Rhode Island must take into account the reality that the municipal and state governments are so poorly run and are not above changing the rules of the economic game when it suits their personal purposes.  After all, the business environment isn’t just the set of taxes and regulations that the government imposes within its jurisdiction — which are utterly obnoxious in their own right — but also tendency of officials to add more and then cut special deals only with those who play ball.

As with the Citizens Financial Group development, the message is clear that businesses should look anywhere else than Rhode Island first, unless they’re big and influential enough to have the rules bent in their favor.

But aside from all that, I’m not sure why everybody assumes that this egregious example of tax grabbing and non-communication is some kind of error.  Here’s a bit of waterfront property that the owners no longer want and that can’t be sold for its current use.  Keep an eye out for new proposals to utilize the abandoned land for something that powerful people inside Providence government want more.   After all, what are jobs, taxes, and local energy/fuel sources in comparison with things that insiders want?

43

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.

Continue reading on RIFreedom.org.

44

RI Foundation Becoming Hub for Top-Down Progressive Shadow Government

In the Daily Signal, Kevin Mooney, who used to write for the Ocean State Current, takes a look at the private Rhode Island Foundation’s role in advancing left-wing causes and exploiting legal loopholes to move sensitive government activities beyond the reach of voters and transparency laws:

With almost $1 billion in assets, the foundation bills itself as Rhode Island’s largest grant-maker, awarding more than $30 million a year, according to annual reports. Tax records show that the foundation concentrated its most recent donations on left-of-center organizations, with a particular emphasis on environmental causes.

These organizations include Earthjustice, EcoRI News, the Climate Action Network, the Environmental Justice League of Rhode Island, and Grow Smart Rhode Island. Each has received tens of thousands in donations from the Rhode Island Foundation, according to the most recent tax forms.

Other left-leaning recipients of the foundation’s largess include Planned Parenthood branches in Rhode Island and Massachusetts; Direct Action for Rights and Equality, an anti-capitalist “social justice” group; the Economic Progress Institute, a Rhode Island-based progressive research group; and the Rhode Island Coalition Against Gun Violence, which seeks new gun controls.

Rhode Islanders who express concern over the Rhode Island Foundation’s penchant for funding liberal causes have been particularly critical of the nonprofit’s support for environmental groups standing behind a project called RhodeMap Rhode Island.

The RI Foundation’s left-wing involvement spans just about every area of progressive social activism, and as Mooney notes, the organization has received hundreds of thousands of dollars from the state in the area of healthcare. (Cash is fungible, of course, so revenue is revenue.) In the past year, though, the Foundation has really taken additional steps toward helping to create and play a role in a shadow government.

As a tangential note, Stephen Hopkins Center for Civil Rights Giovanni Cicione tells Mooney that some of this growing private-sector cabal should be registering as lobbyists. I’d argue that includes the state’s new chief innovation officer Richard Culatta, whom Democrat Governor Gina Raimondo helped hire through the Rhode Island College Foundation. He’s going to be part of the governor’s cabinet of advisers, but he’s not a government employee and will be giving suggestions and promoting them not only to the governor, but to agencies and bodies throughout government. As of this morning, he was not listed on the Secretary of State’s lobbyist tracker, and it’s reasonable to expect he never will be, becoming instead just another example of how there’s no rule of law in Rhode Island.

46

Quick Takes on Parenting

A Pew survey on children and parenting reinforces what we’ve always known: Parents should stay together and work to move their families to neighborhoods where over-involvement is a bigger danger than street violence.

47

Taking Us Over with Created Money

Those who wish to re-engineer our society to better fit their tastes (and usually their own personal financial interests) have been staying quiet about RhodeMap RI and its related plans.  The juggernaut keeps moving, though, with the persistence of the Obama Administration; the money never runs out, largely because it’s not real money.

As Ken Blackwell and Rick Manning mention, Congress is in the process of removing funding for enforcement of a rule propagated by the Dept. of Housing and Urban Development (HUD) called Affirmatively Furthering Fair Housing (AFFH).  Basically, federal bureaucrats use their limitless resources as a bribe for states, cities, and towns to commit their neighborhoods to social experimentation.  (One suspects that we’ll be able to tell who’s really rich and/or influential by the fact that their own neighborhoods will remain untouched.)

This method raises an interesting point:

Refusal to comply with these invasive, unfunded mandates would empower the U.S. Department of Housing and Urban Development (HUD) to withhold millions of dollars in community development block grants from the area – effectively turning this $3.5 billion annual program into a political redistricting tool.

Like a drug dealer, the federal government has worked, over the years, to hook more-local governments on federal funds, which allows them to skirt mechanisms in the U.S. Constitution designed to prevent an overly powerful national government.  The HUD bureaucrats aren’t specifically mandating local zoning rules, but they’re dangling a pretty big lure on that hook.

Some of us find it difficult to understand why it’s so difficult just to refuse the money, but our political system has come to be built for invidious incentives.  Doing things with money that comes from a higher tier of government gets elected officials credit for spreading money around and getting things done without their having to suffer the consequences of taking that money away from somebody.  The feds take that heat.

But then, they really don’t.  Until the early-to-mid 1900s, the federal government ran surpluses more often than it ran deficits.  Since then, surpluses have been very rare, and the deficits have been massive.  Since Obama took office, the average annual deficit has been nearly a trillion dollars, and the government expects them to continue at around a half-trillion dollars for the foreseeable future.

That is, our local governments are being bought off with money that nobody currently in office has to take responsibility for collecting at any level.  That’s not how our government is supposed to function; rather, it’s a recipe for lost rights, followed by disaster.

48

The Dreaded Window into Government Activity

Ethan Barton writes on The Daily Caller that the U.S. Dept. of Housing and Urban Development (HUD) — which played a large role in bringing us RhodeMap RI and every other push to trample property rights in the name of progressive social re-engineering — doesn’t follow the most (let’s say) transparent financial practices:

“Multiple deficiencies existed in HUD’s internal controls over financial reporting, resulting in misstatements on the financial statements and noncompliance with laws and regulations,” the report [from a government watchdog] says. “We have reported on HUD’s administrative control of funds in our audit reports and management letters since fiscal year 2005. HUD continued to not have a fully implemented and complete administrative control of funds system that provided oversight of both obligations and disbursements.”

This is the sort of thing that leads more and more of us on the right side of the political spectrum to conclude that the federal government is tantamount to a criminal enterprise, at this point.  I’ve started to think, too, that the very extremity of the mismanagement makes it more difficult to persuade people to change their political beliefs and actions.

A major challenge in the absolutely critical process of persuading people to think differently about government is that they quickly reach a point at which further consideration would push them to some unthinkable conclusion.  If you admit that the government has essentially become a giant crime syndicate, a vast field of truisms that must be challenged presents itself.  Most people, I’d say, don’t even want to go so far as articulating the problem.  They sense it is there, and they don’t want to open the door because they realize they’d have an obligation to work toward repairs.

The problem transcends individual policies.  HUD, for example, benefits from this reluctance even among people who have no personal or emotional investment in HUD’s activities.  When once the growth of government comes under scrutiny and the fact becomes undeniable that it cannot be trusted to operate without careful citizen oversight, there’s no telling what might fall.  Entitlements?  Abortion?  Scientific subsidies?  Handouts for the arts?  To admit that government is not some magical machine to which we can give instructions and money and receive some vague social benefit with little personal involvement is to face our own negligence not only in failing to supervise government, but also to really think through our political philosophies.

In short, rethinking the auditing practices of HUD inexorably means rethinking one’s relation to the government.  Then, the only thing worse than cynically stoking the conspiracy theorists on the right is realizing that they are correct.  The problem with opening yourself to agreement with the proposition that government is behaving like a criminal enterprise is that you open yourself to becoming the sort of person who thinks that government is behaving like a criminal enterprise, and that means a lot of effort not just to do the right thing, but also to push back against the (conspicuously government-reliant) people who’ll start calling you crazy.

49

The Tip of the Public Manipulation Iceberg

Katherine Gregg has more on Rhode Island state government’s spending to promote itself and spin its programs to the public in today’s Providence Journal:

Rhode Island taxpayers paid upward of $6,234,093 last year to private companies that do “communications and marketing” for state government in Rhode Island. The “quasi-public(s)” paid another $617,555 to consultants, and expect to pay $987,216 for salaries for their in-house public-relations staff.

That’s on top of the $4.3 million for in-house public relations people.  But this is all just the tip of the iceberg when it comes to the government’s efforts to get the public to accept its expansion.  After all, if you’re going to include the payment for the Raimondo administration to design its RhodeWorks logo, why not also include the $50,000 the state paid for a predictably positive economic projection from REMI?  For that matter, part of the $1.3 million study the Brookings Institution is currently conducting in Rhode Island will be instructions for how the Raimondo administration can bring agencies, private organizations, and private companies into line with the government’s agenda.

If we opened the net wide enough not just to catch people with the phrase “public relations” in their job description, but all of those activities that have as their goal the persuasion or manipulation of the public, you’d catch not only REMI and Brookings, but GrowSmart, the RI Foundation, and many other organizations known and unknown.  The bill wouldn’t be a few million dollars per year, but tens of millions or more.

This is an inevitable consequence of an expansive government that has its fingers in every activity and massive, indecipherable budgets.  The worst part is that we’ve all fallen asleep on the job when it comes to tracing and pushing back against the manipulation.

50

When Government Has “Affordability” to Sell

A journalist once asked me what “other side” there could possibly be to the unmitigated blessing of government’s buying up open space.  I responded with the basic point that economist Thomas Sowell makes here:

Housing prices in San Francisco, and in many other communities for miles around, were once no higher than in the rest of the United States.

But, beginning in the 1970s, housing prices in these communities skyrocketed to three or four times the national average.

Why? Because local government laws and policies severely restricted, or banned outright, the building of anything on vast areas of land. This is called preserving “open space,” and “open space” has become almost a cult obsession among self-righteous environmental activists, many of whom are sufficiently affluent that they don’t have to worry about housing prices.

From progressives’ point of view, this is all to the better.  They get to preserve pretty nature for their own enjoyment when they have a moment to pause and look at it or to make their morning commutes more pleasant, and they drive up the price of housing, so they can then turn around and buy votes with subsidies to those who can no longer afford their homes while also increasing their power to tell people how they have to live.

Remember RhodMap RI?  It came before RhodeWorks, which (we’ll no doubt find) precedes RhodeKill.  Well, RhodeMap is an excellent example of the plan in action.

A poor economy, tight regulations and zoning, and a growing portfolio of unavailable land are making it difficult for lower-income Rhode Islanders to find suitable housing.  The solution, according to government planners, is to force social engineering by pushing “affordable housing” into every corner of the state, which has the happy side effect for progressives of pushing people who tend to vote for their preferred candidates and policies into those corners, so no contrary perspective can gain a solid footing.

When implemented, RhodeMap-like plans will drive up the prices (and taxes) in areas that aren’t in the designated subsidy zones.  The subsidized areas will fill up, first, with politically preferred groups.  This combination of circumstances will create many opportunities for strife, among them being an increase in the sense of inequality and unaffordability, which will — surprise! — increase the calls for government to step in and solve the problems with new taxes and diktats.

It’s a fine machine, don’t you think?

51

Government Built on the Principal-Agency Problem

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.

52

So Much Study of a Top-Down Economic Program Already Under Way

There sure are a lot of folks who want to offer Rhode Islanders helpful advice on how they should give government, non-profit, and business leaders expanded resources and authority to make decisions for all of us.  First came a group of wealthy Gina Raimondo backers and their hired think-tankers at Brookings, and now, according to Kate Bramson in the Providence Journal, the Fed wants to get in on the action:

The Boston Fed’s team will collaborate with an unspecified number of Rhode Island cities and towns to use national research it conducted to help struggling communities recover economically, said Tamar Kotelchuck, director of the Boston Fed’s Working Cities Initiatives.  The program in Massachusetts has tackled workforce development, community development and education initiatives in six cities, but it’s too soon to say exactly what the focus might be in Rhode Island. Kotelchuck said it’s likely that workforce development will be one area of focus here, but others may emerge after more study.

Funny how everybody’s got the same basic blueprint:

Working Cities research has shown several factors help cities maintain or recover their economic stability — including collaborative leadership, the role of anchor institutions, investment in infrastructure and the extension of benefits to the entire community. But “collaborative leadership” — the ability to work together across sectors over a sustained period of time with a comprehensive vision — was found to be most crucial.

That passive voice — “was found to be” — is instructive.  “Found to be” by whom?  A quick look through some of the materials on the Boston Fed’s Web site for this initiative reveals that “collaborative leadership” is actually one of the goals of the project.  It isn’t surprising, therefore, that the organization would find it to be crucial.  This report, in particular, brings around some familiar verbiage:

Most importantly, [in the comparatively few places that have succeeded in making the transition from distressed to revitalized,] public officials, private sector employers, and nonprofit institutions need to coalesce around a long-term vision and collaborate for a sustained period of time in implementing broad-based revitalization strategies.

Translation: Insiders agree on a vision for the whole community and use the levers of government, non-profits, and business to make sure the people don’t disrupt the plan.  This is precisely the vision that Brookings has articulated, and the mechanisms that the Fed suggests read like the menu of the programs that Governor Raimondo and the General Assembly have empowered the state’s new Commerce Secretary to implement, using $80 million of our money claimed through a fancy refinancing deal.

In addition to the similarity of all of these plans note something else:  Raimondo began implementing it before the all this high-profile studying had begun.  Anybody who thinks this initiative begins with the actual people of Rhode Island, our needs, and our hopes and dreams is being profoundly misled.

 

54

Gina’s Gleichschaltung

Ed Driscoll recalls a Jonah Goldberg column from 2010, and it makes me think of Rhode Island Governor Gina Raimondo and the Brookings Institution:

Now, contemporary liberalism is not an evil ideology. Its intentions aren’t evil or even fruitfully comparable to Hitlerism. But there is a liberal Gleichschaltung all the same. Every institution must be on the same page. Every agency must advance the liberal agenda.

And this is where the Catch-22 catches. The dream of a nimble, focused, problem-solving government is undone by the reality of hyper-mission creep. When every institution is yoked to an overarching philosophy or mission, its actual purpose can become an afterthought.

Here’s Bruce Katz, of Brookings, talking about the study on which his institution is currently working for the benefit of the Raimondo Administration:

“I think in most parts of the U.S. it’s still, the government does this, the corporations do that, the universities are somewhere else,” [Bruce Katz, the nationally-known head of the Metropolitan Policy Program] said. “In the successful places around the world there’s a seamless interaction between all these different sectors, and if they’re all on the same page – then that’s when you get the bigger returns. So it’s not just the policy … it’s this foundation of collaboration.”

Unfortunately for the central planners, this is a pipe dream.  Just look at Stephen Beale’s article on GoLocalProv, today:

The Rhode Island Department of Children, Youth, and Families is riddled with severe financial problems and shoddy record keeping, leading to running deficits, a potential misuse of funds, and violation of state purchasing regulations, according to a state audit.

The problem isn’t only that a government in which unity of purpose is paramount hinders each organization or agency from fulfilling its own unique purpose, but also that the purpose of the whole collective stops being to solve problems and starts being to support the collective.  As I suggest in Beale’s article, the people who do the stuff of government know that the folks at the top, including those who are elected, are on their side and reluctant to raise questions about the whole big-government enterprise; they also know that like-minded people have a lock on those offices.

Under such circumstances, belief in the principle of central planning becomes the first requirement for employees, and the first objective of any process to catch and stop bad management becomes not catching and stopping bad management, but preventing incidents from making people think society might have other ways to solve its problems.

56

Building Cities for Urban Planners

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

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

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

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

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

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

57

Brookings Backers Backed Raimondo, Too

As a quick follow-up to my post on Ted Nesi’s look at the meager details available on the forthcoming Brookings Institution plan to turn Rhode Island toward the radically new direction of socialism,* I checked out the campaign donations of the folks providing funding for the study, whom Nesi lists in this paragraph:

The $1.3 million is coming from a small group of backers: the Rhode Island Foundation; another local nonprofit that has yet to be publicly identified; The Fascitelli Foundation, a nonprofit endowed by the wealthy real-estate executive Michael D. Fascitelli, a Rhode Island native; Mark Gallogly, a Rhode Island native and hedge fund executive, and his wife, Lise Strickler; Stephen Mugford, an executive with Capitol One Financial Corp. in Boston, and his wife, Kristin; and Thomas R. Wall, another private equity executive, and his wife.

Including Rhode Island Foundation President Neil Steinberg’s $1,000 gift to her last year, the five listed families have given Governor Gina Raimondo $8,249 in political donations, $6,000 of it in 2014.  Fascitelli leads the way, with three $1,000 contributions, with Thomas Wall and Stephen and Kristin Mugford in for $2,000.  Mark Gallogly’s $249 in 2010 is the only non-$1,000 amount.  Although they all seem to have Rhode Island ties (mostly in Westerly), Steinberg is the only one with a Rhode Island address on his donation.

Raimondo’s policies and, we can assume, the plan that Brookings will lay out, are what we get when very wealthy people decide they need to step in and do society better than society does.  That their political philosophy is the core of the problem, in Rhode Island, whether it’s done poorly or with all of the study and structure that can be bought with the money of the 1%, doesn’t matter.  Their policies serve their interests and their egos, and at the end of the day, they won’t do the suffering if they fail; in fact, they’ll probably profit.

* Yes, there’s a touch of sarcasm, here.

58

Slipping Totalitarianism Quietly Through the Back Door

At the RI Center for Freedom & Prosperity, we spent quite a while — more than a year, anyway — looking into the the plans behind RhodeMap RI and related planning documents like Land Use 2025.  The better part of the challenge was that the whole thing was designed to look like benign “we’re just talking, here” activity.  It was like a friendly community game of croquet, but with intimidating guards standing around ready to unleash such powerful weapons as accusations of racism and conspiracy theorizing.

It’s beyond dispute, now, that the movement is national (if not international) and is at the very least incidentally (if not deliberately) concerned with eliminating vast swaths of our freedom, particularly those having to do with property rights.  And it was always obvious that the intent was to keep the real import of the plan from being widely known until the trap was pretty well set.

This, too, appears to be national in scope:

The key exchange comes between 1:21:08 and 1:23:59 on the video. In response to a question from [Brookings Fellow Richard] Reeves about what “getting serious” about housing policy would mean, [Urban Institute VP Margery Austin] Turner cites [Affirmatively Furthering Fair Housing (AFFH)], arguing that the rule could bring “incredibly important” changes to America. Slyly, she acknowledges that AFFH isn’t so much enforcing the original legal obligation to “affirmatively further fair housing,” as it is changing our understanding of what that obligation means. (In other words, AFFH is stretching a directive to prevent discrimination into a mandate for social engineering.) Turner then says that it would take decades for AFFH to fully transform society along the lines she desires. (I’d add that the rule won’t take nearly that long to gut local government in America.)

What’s interesting is that when Turner finishes her discussion of AFFH by saying that the rule “sounds very obscure, but I think it could be hugely important,” Reeves breaks in and says: “Perhaps it’s important to keep [the AFFH rule] sounding obscure in order to get it through.” (In other words, to get the AFFH rule enacted before public opposition and congressional Republicans can block it, we’ve got to keep its existence and importance quiet.) At this point, the audience laughs sympathetically. Then Reeves adds: “Sometimes obscurity is the best political strategy, particularly in this area.”

As the infamous Jonathan Gruber put it, with regard to enacting ObamaCare, “the stupidity of the American voter… was really, really critical for the thing to pass.”

59

Has Left-Wing Activism Been “Stimulated”?

Russ Moore’s article highlighting how little stimulus money seems to have been spent on infrastructure comes at a good time:

Yet that fact has led many talking heads and casual political observers alike wondering why, after the enactment of The American Recovery and Reinvestment Act in 2009, otherwise known as “the Obama stimulus package” that saw almost $787 billion spent on a national level with just under $1.1 billion sent to Rhode Island, the state still has roads and bridges that can only be described as woeful.

The answer is probably as frustrating as it is simple: it’s because a relatively small amount of money was actually allocated to roads and bridges. According to a GoLocalProv review of federal data on the American Recovery and Reinvestment Act stimulus spending, just under 9 percent ($95,493,854) of the $1.096 billion that Rhode Island received was given to the Rhode Department of Transportation and used to fix the state’s crumbling roads and bridges.

As I state in the article, it’s pretty clear that Obama’s stimulus wasn’t meant to actually get anything done for the people of America. It was intended to insulate government at every level from the effects of the recession, to help reinflate the stock market bubble, and to direct taxpayer dollars (rather, taxpayer debt) to the activists with whom Obama is aligned.

For an example on that last point, I’ve noted before that the PolicyLink group that provided the equity piece of the RhodeMap RI puzzle is largely funded through the Dept. of Housing and Urban development, as well as the government entities that receive grants from HUD.  Stimulus didn’t fix our roads, but it did build infrastructure for Obama’s “fundamental transformation” of our country.

It would require more investigative reporting than I have the time to pursue, but one has to wonder how much of the stunning activism we’ve seen in the past few years — to radically change our society and promote a far-left worldview out of keeping with the principles of our constitutional republic — was directly bankrolled by us.

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