True enough. Under Governor Carcieri’s helmsmanship, its last director, Saul Kaplan, spouted fashionable buzzwords while the state’s economy collapsed.
The panel recommended recruiting a new director (through a nationwide search) and creating a new private-public partnership to lure business to the state. These are good ideas. The EDC could perform a valuable role spreading the word about Rhode Island and making it easier for people to do business here, such as by speeding permit approvals when possible.
But, as many experts have pointed out, the big problem with Rhode Island’s economy is not something even a perfectly re-engineered EDC could fix. The Ocean State is a great place in many ways, with a superb location between Boston and New York, a strong quality of life (if you have a good job and/or a private income) and a hard-working private sector. But the state faces more than a marketing challenge, and until it solves some basic problems, the best economic development team in the world will not find much luck turning things around.
Rhode Island needs progress quickly in three areas:
• Competitive taxes. The state will be hamstrung in attracting business while its taxes on businesses and executives remain higher than those in its neighboring states, never mind most of the rest of America. Federal taxes will have to rise to pay for new programs; indeed, fiscal prudence dictates that. But tiny Rhode Island is too small to go its own way. Businesses can fairly easily move to neighboring states. Making the state more competitive in taxes will require getting a handle on out-of-control public pensions, among other things.
• Education reform. Rhode Island’s public schools are more expensive and perform worse than those of most states. For too long, they have been run too much for the benefit of such groups as teachers unions, and students have gotten short shrift. To attract businesses looking for a well-educated workforce, the Ocean State must reform its schools, encouraging innovation, accountability, management freedom to pursue best practices and greater choice for parents. The state’s public higher education has also gotten short shrift, even as administrative duplication among its three public colleges raises its inefficiencies and costs.
• Exploiting the state’s natural advantages. Rhode Island should be working vigorously to develop its maritime ports, which would create jobs and help businesses thrive by making it cheaper to transport goods. In addition, it should stop its foot-dragging on expanding the runway at T.F. Green Airport to permit European and West Coast flights. Politicians must develop the backbone to challenge the NIMBY forces that oppose job development and improved infrastructure.
Ultimately, these changes would make the state dramatically more attractive to job creators and even turn Rhode Island into a regional powerhouse. For too long politicians and their appointees have concluded that phrasemaking is enough — combined with tax and other incentives for favored industries, to be paid for by unfavored industries and individuals.
In truth, the economy is far too complex and innovation too quick for politicians to effectively choose winners and losers in the world marketplace. What a reformed EDC could do best is to show the rest of the world the Ocean State’s comparative advantages and urge policymakers to adopt programs that improve the state’s overall economic attractiveness.
Our "lively experiment" has run its course economically. It is time for a new Green House Compact Summit.
Our business model, as a state, is built on the haydays of manufacturing and the labor movement with cheap labor and water power. Today this is no longer the reality.
Our defense industries were build on the WWII and the Cold War need for (submarines and ship building). These have changed to meet new conditions that require higher levels of skills and not just brut labor and craftmanship.
Our fishing industry was built on the abundance of fish stocks -- today they aren't there. Environmental and susrtainability issues are drawing in the net that fishermen find themselves in.
We need this debate, but we need to also move beyond it to find a new business model for the state built upon our true strengths and cutting our loses now, no matter how painful. It is only fair to the next generation.
The current adult generation(s) created this problem. Let's take responsibility and clean it up. It is in all our interests.