October 16, 2009

The End Not in Sight

Justin Katz

Maybe there's something about an article that begins by saying that the now-13% unemployment rate in Rhode Island "fulfill[s] experts' predictions that the state's job market will get worse before it gets any better" and then proceeds to quote experts who keep adjusting their predictions to chase the dark reality, with the latest being as follows:

[Edinaldo Tebaldi, assistant professor of economics at Bryant University] and Edward Mazze, distinguished university professor of business administration at the University of Rhode Island, will give a somewhat gloomier forecast for the state at a conference next month in Boston organized by the New England Economic Partnership. They predict the jobless rate to rise to at least 13.5 percent and hover there next year. By 2011, it will fall, but only to around 12 percent, their preliminary calculations show.

My unscientific gut assessment, based on general understanding of the problem and the signals of people who could fix it were they not simultaneously clueless and corrupt, remains that we're going to 14% indefinitely — although I'm tempted to put Rhode Island's new status quo at 15%. Take, for example, a companion article about a RIPEC event at which neither of Rhode Island's legislative leaders appeared willing to do more than offer empty phrases in the dialect of their audience. At least Governor Carcieri called for abolishing the corporate income tax, but that's only a start.

Take, also, the latest tidbit related to the foolish illusion of the stimulus program:

The federal government reports that at least 30,383 jobs have been created or saved across the United States as a direct result of federal contracts made possible by the stimulus package signed by President Obama in February.

Rhode Island, however, received just 6 of those jobs, according to federal data reported this week on the Obama administration's stimulus Web site, recovery.gov.

The Ocean State ranked dead last, even behind Puerto Rico (126 jobs) and the District of Columbia (370 jobs), in the national rankings.

To the extent that the "stimulus" has "created or saved" jobs, they are temporary — based on the continued provision of taxpayer dollars. And I'd hypothesize that Rhode Island's poor showing is evidence of the fact that our system is so constrictive that there aren't jobs waiting to be created, merely lacking investment. Rather, Rhode Island doesn't even have the machinery for job creation.

Sure, the article goes on as follows:

The numbers do not include, however, the number of jobs saved or created by stimulus dollars funneled through the state, which the state's congressional delegation said would exceed $1.1 billion and produce at least 12,000 jobs through transportation projects, green energy initiatives and job training programs.

Those figures -- which will likely show many more jobs created -- will be released Friday, according to the Carcieri administration.

But consider one component of that effort:

The state Office of Energy Resources, which has received tens of millions of dollars in federal stimulus funds in recent months for energy projects, announced Wednesday that it is finally distributing about $15 million, largely to help weatherize homes for low-income people.

Most of the money ($12.2 million) is going through local "community action agencies" as a sort of income redistribution to low-income households in the form of home improvements. In other words, it's being processed through Rhode Island's corrupt system in perfect harmony with the entrenched poverty industry and union constituencies that latch onto this state as a sixty-pound tumor. At the very minimum, one can infer that the effect of the money will be greatly diluted by the imbalanced pay that union workers will receive to do the public work.

This project from the energy office, although relatively small, is even more indicative of the deadly thinking in state government:

$250,000 to the state building commissioner to develop new building codes that would require more energy-efficient houses. The money may also be spent on training building officials and contractors.

Apparently, it is now "economic stimulus" to contrive ways to make it more expensive to build homes. That's not stimulus — it's asphyxiation. And it's the way Rhode Island operates and will continue to operate for the foreseeable future.

Maybe 15% isn't a high enough prediction.

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And 1 of the 6 jobs went to a Boston Architectural Firm to manage a roof job at the US courthouse. Purely pathetic.

Posted by: dave at October 16, 2009 8:23 AM

One must always be concerned, perhaps alarmed, by the creation of new phrases such as "jobs saved or created", Discussion of such matters must always begin with "shall we define our terms".

The "stimulus bill" does have every indicia of a program designed to prop up failing governmental units. To "double the trouble" it is regularly combined with the desire to be "green". Since everything "green" is experimental, failure is easily excused as a search for "new technologies".

Posted by: Warrington Faust at October 16, 2009 8:39 AM

"$250,000 to the state building commissioner to develop new building codes that would require more energy-efficient houses."

Incredible. Like it's not already expensive enough to live in this state, they want to pile on more regulations and expenses??

"To the extent that the "stimulus" has "created or saved" jobs, they are temporary — based on the continued provision of taxpayer dollars"

Isn't that kind of like eating yourself? Minimally, it's not a sustainable way to run an economy.

Posted by: Monique at October 16, 2009 8:42 AM

>>Isn't that kind of like eating yourself? Minimally, it's not a sustainable way to run an economy.

Not according to communists.

And that, folks, is who is running the show in D.C. right now.

Just check out this site, particularly the "Obama Files."


Posted by: Ragin' Rhode Islander at October 16, 2009 9:48 AM

"Jobs saved"

I always get a good laugh when I hear that assertion thrown about.

How could one possibly measure how many "jobs were saved" by the stimulus?

As a student of economics, I know that the answer is "0", but the idea that you can point to this job or that job as having been saved without a job lost somewhere else or some other horrible externality is ludicrous. Government cannot "save" a job, jobs are determined by supply and demand.

Sure government can hire a bunch of people to sweep the steps of city hall or rake leaves in forests, the "progressive" model of stimulus, but where does that money come from? Do they think the private sector can just absorb that cost and lack of productivity without consequences? Without layoffs?

Posted by: Dan at October 16, 2009 9:53 AM

The Federal District Court of Rhode Island hired students from Worcester Polytech to redesign the court's website. Rhode Island college students, all native Rhode Islanders educated in the Rhode Island public school system, were first given the job. However, these students were found not to be up to the task. Evidently, their constant drooling onto the keyboard caused repeated short-circuiting of the electronic system. Judge Mary Lisi finally gave up and had to go out of state...

Posted by: InsiderOnBreak at October 16, 2009 12:00 PM

The idea that government can "make jobs" seems like an idea left over from the FDR euphoria.

Sure, through tax policies and other governmental functions, government can make job creation in the private sector easy, or difficult. But, it can only "make jobs" by expanding itself.

Posted by: Warrington Faust at October 16, 2009 1:26 PM
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