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The US is reinventing its economy; can Rhode Island do likewise?

July 18, 2012

Even with what often seems like a tepid recovery, the United States is working its way back toward a muscular economy — if you believe the Economist.

The sharp-eyed British newsmagazine points to a number of factors: under-valued homes, increasing exports, the growing “app economy,” and more. So if the nation can do it, what about the perennial sick man of the New England states?

The unveiling of JetBlue today as a new carrier out of T.F. Green offers a boost, even as the woes of the state Economic Development Corporation very much remain in the news. But perhaps if we’re lucky, the 38 Studios’ debacle will lead the state to drop its periodic pursuit of an imaginary magic bullet to juice the economy.

Governor Chafee campaigned on a theme of building on Rhode Island’s assets. That hasn’t helped the state, so far at least, to lower its high unemployment rate.

During an interview on a different subject this morning, I asked state Treasurer Gina Raimondo about the economic outlook, since she has a background as a venture capitalist. Specifically, how does she thinks Rhode Island should simultaneously pursue short-term and long-term economic development. Here’s part of what Raimondo said:

“I think the question we have to ask ourselves is, ‘what do we have to do to make Rhode Island competitive?’ You know, we live in an increasingly competitive world; what do we have to do to make our state competitive ?

And that means we have to have a strong public education system ; infrastructure — you know, I was very happy earlier this year to be part of an effort to extend the runway at T.F. Green Airport.  We need roads, bridges, and transportation. We need a regulatory environment and an openness on behalf of state officials to have a real sense of urgency around making Rhode Island a good place to do business . . . ” 

Rhode Island has struggled to reinvent its economy since the decline of the Industrial Age, and there hasn’t been much urgency attached to the issue any time recently, at least judging by the pronounements of public officials.

The state’s small size, rather than enabling it to be nimble, often seems like a barrier to overcoming inertia. So if Rhode Island can solve its biggest problem without outside help, it still has to prove the skeptics wrong.

4 Comments leave one →
  1. Mister Guy permalink
    July 19, 2012 12:59 am

    “‘And that means we have to have a strong public education system ; infrastructure — you know, I was very happy earlier this year to be part of an effort to extend the runway at T.F. Green Airport. We need roads, bridges, and transportation.'”

    All that takes money, and, as long as short-sighted RI pols refuse to raise taxes on the rich, RI will never be able to really excel in these basic areas.

  2. Really ? permalink
    July 19, 2012 12:26 pm

    We’d better eat the rich before they all get away! http://www.golocalprov.com/news/1.2-biil/

    • Mister Guy permalink
      July 19, 2012 7:39 pm

      …says the Right-wing “Rhode Island Center for Freedom and Prosperity”. From the very same article:
      “‘Evidence from surveys of migrating households, the existing economic literature, and new analysis in this paper all suggest that taxes do not play any notable role in causing people to leave Rhode Island,’ the report stated. ‘The most important factors in influencing household migration are economic and family-related reasons. If anything, higher state income taxes decrease the numbers of people leaving a state. Taxes do appear to influence the choice of which state to live in once a person has decided to move, but the impact is modest. If Rhode Island uses the revenues from higher taxes to create jobs, reduce unemployment, and reduce property crime, the small negative impacts from taxes can be easily overcome.’

      Kate Brewster, who heads up the Economic Progress Institute, also disputed the Center for Freedom and Prosperity’s findings.

      ‘This report is another ill-fated attempt to use migration data to draw far-reaching conclusions in support of a tax policy agenda, in this case, eliminating the sales tax, the state’s second largest source of revenue. Such a move would be financially devastating to the state and its ability to deliver public services like education, health care and recreation.'”

      Nice try, but it isn’t working…

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  1. AS News Roundup: July 19, 2012 | Advocacy Solutions

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