February 15, 2010

RI's Rut Is Intellectual as Well as Economic

Justin Katz

In a general sense, the front-page, top-of-the-fold story in the Sunday Providence Journal isn't really news at all. Rhode Island led the region in job losses, over the last decade, and its 3.85% drop compared with a national average of 2.2%. The message to readers: get used to the pain.

Of particular concern is that the economic brain trust of the state, mostly academic economists, are offering advice that is both too sweeping and too targeted. Bryant professor Raymond Fogarty laments that "we didn't put enough money into business development," but also (rightly) notes that our "regulatory system is out of control." As we're hearing in the vague proposals that legislators have been floating, money isn't going to come without more government strings. URI professor Edward Mazze asserts (correctly) that government doesn't create jobs, but goes on to say that government should pursue a particular type of economy — the much-cited "knowledge economy" — by (naturally) investing more money in Mazze's employer.

Then, there's this common argument:

[Economic Development Corp. Director Keith] Stokes said Rhode Islanders need to realize the state is part of a regional economy, and people can move seamlessly across state borders. That means Rhode Island's workforce training and tax structure need to be competitive with neighboring states. Unless the state has a trained workforce, Stokes said, even areas of relative success for Rhode Island in the past decade — life science, defense, finance — don't benefit the state as much as they could.

Education is a long-term matter. Even a complete turnaround, today, would take years to change the general workforce and years more to attract businesses to employ it. With teachers' unions that would rather risk their members' jobs and tie up districts in court than allow their members to agree to additional support for students, it will take years of draining battle just to begin to implement a turnaround. And then, if the state doesn't have jobs on offer, the newly competent young adults will simply cross those seamless borders.

In the short-term, who cares if Rhode Island runs that scenario in reverse — attracting well-educated employees from other states? Over time, they'll move here, invest in the state, and help (or force) its natives to figure out how to change things for the better.

As I've noted before, I don't have a fancy title, and I certainly don't receive my paycheck from the public sector, but the answer seems simple, to me: Cut taxes. Eliminate mandates. Erase regulations. No targeted sectors or industries. No additional strings. Just a major overhaul and a big sign at the border that reads, "Open for Business."

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China has a similar sign on their border.

Posted by: michael at February 15, 2010 9:36 AM


Joe Trillo, in Hawaii, on the Daily Show with Jon Stewart


Posted by: Jeff at February 15, 2010 10:34 AM

I see, just throw more money into public education and everything will be fine. That's credible...

I offer the example of Michigan's state law school, one of the finest law schools in the country. Something like 9 out of 10 students leave the state right after graduation, including even the students who grew up in Michigan.

To think that people will stay in RI just because they happened to go to school here is idiotic. If I think of my 9-10 closest friends from college, none of them are currently working in that state, they all moved to where jobs were right after graduation. Unless we change the regulatory environment of RI and get big government's grubby hands out, we'll just be further subsidizing the work-forces of our more competitive neighbor states.

Posted by: Dan at February 15, 2010 10:46 AM

The Michigan scenario has been playing out there for decades.

That state, like Rhode Island, is still living in a 1930's industrial fantasy mindset of labor vs. capital, and so union dominance of the political and cultural landscape.

And that state continues to slide into the economic abyss, even though the examples of how to turn it around exist in, e.g., Texas.

Rhode Island will be no different and will choose to continue to decline!

The voting population is still living in the industrial age, and in its gut is hostile to business, doesn't particularly value education and is resentful of any success outside of "real work," i.e., a blue-collar job (preferably union).

This isn't slamming those who work in the trades, for any person that is self-supporting and making an honest living is to be honored.

This is merely an observation that Rhode Island hasn't left its textile mill beginnings, and from an "economic culture" standpoint hasn't even entered the latter half of the 20th century, much less the 21st century.

Posted by: Ragin' Rhode Islander at February 15, 2010 11:07 AM
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