Economic Development on the cheap

Rhode Island EDC has committed $75 million of RI Tax payer money to bring 38 Studio, a video game developer, to Rhode Island. In return 38 Studios is supposed to create 400 jobs for RI. The rationale is that the video game industry  is the next growth industry.  RI  needs the jobs and taxes these will generate. The video game industry needs a well educated, highly trained and skilled workforce made up of artists, musicians, artistically oriented engineers and technicians.

Yet, the educational resources we will need to train these worker are being cut back. Congress is cutting federal support for arts education, while Providence, the home of RISD and soon to be 38 Studios, is cutting its arts programs in the school system. So once again our big economic development ideas are in conflict. We are attracting an arts based business with a tax payer investment to a private enterprise while under-investing in the children of the same tax payers and underfunding the education system that is supposed to train a generation of students to staff the graphic arts,  musicians positions these companies will need. . Makes sense -- Rhode Island sense that is.

Meanwhile Borders books has filed for Chapter 11 bankruptcy, Borders has 3 stores in Rhode Island in Garden City, Providence Place mall and T.F. Green Airport –– were on the list to close. Today, it was announced that the Cranston (Garden City) store will not be closing. The jobs will be saved, the customers will still have access to their bookstore. A small gain in a sea of closures, bankruptcies and job losses. How did this happen? Did EDC jump in? Did Governor Chafee or Speaker Fox intervene?

No, it was done because the owners of Garden City, the Los Angeles County Employees Retirement Association, was willing to make a deal that satisfied everyone. These seems like a win, win situation. RI keeps the jobs and collects the taxes, Garden City keeps earning money with an occupied building and the L A County Employees Retirement Fund continues to get a return for its members. And Borders gets a break on its lease while continuing to earn money from the store..

Maybe more business to business cooperation is what we need. Note that with all the anti-public union talk from the Tea Party and its allies, it was a county employee retirement fund that help save the day, not a too big to fail Bank.. Maybe when cooler minds get together to solve a problem, small changes are possible. .

Maybe enough small steps can save enough jobs and businesses to compensate for one big gamble. Maybe by sharing the pain, these individual efforts will rebuild a sense of community to solve the problems. Economic development on the cheap -- just maybe it will trump the grand plans, big bets and the "if it wasn't my idea, it ain't worth doing" mentality that seems to dominate economic development thinking in Rhode Island.

Another perspective: Teacher and Public Employee Pensions

A major debate has been and continues to go on about the role of public service workers (government employee) pensions and the rebellion by taxpayers exemplified by the position taken by such groups as the Tea Party and RISC (Rhode Island Statewide Coalition). The underfunding (or legislative stealing) of the state and local pension funds by legislative and community governing bodies and poor (or blatant) mismanagement of such funds by the trustees of these funds  (such as West Warwick) has certainly added to the current and future fiscal problems facing the citizens of Rhode Island at all levels. These issues have been discussed here over the past year and more.

At times, the blame game become more the focus for debate, than any substantive discussion of solutions. Ideological battles between Unions verses taxpayers, legislatures vs taxpayers, citizens verses public employees, reactionary conservatives (know nothings) verses reactionary liberals (progressives) generate a lot of entertainment and media noise. But just as the BP oil well in the Gulf of Mexico continues to waste millions of gallons of crude oil and natural gas and pollute the environment, the public treasury is still leaking and the state's fiscal future and public trust is being polluted by incompetent and greedy management.

Despite the debate and rancor at the State and community levels, we need to step back a little. The misbehavior which lead to the problem can be traced back to its source. That source is the general public, you and me, that is US, who through our uncritical support of our local elected officials have created a calcified legislature incapable of making the hard choices the times demand. We condemn the General Assembly but keep our own representatives who, when "they go along to get along," are not acting in our or the state's best interest.

Instead we elect representatives who can only make the easy choices, such as fireworks, cashing in the future earning from the tobacco settlement, approving budgets based on speculation about a federal bailout. The General Assemble has made short sighted and short term decisions over the past two decades that are today having real negative consequences, often unintended self inflicted ones.  Even those who promote such short sighted and selfish behavior are feeling the consequences today.

What are these consequences?

Every once in a while you run across an article, or posting, on the web that is worth sharing, especially in light of the issues confronting Rhode Islanders these days.  An article appearing on the Money and Market Website, entitled  State Pension Woes Only Worsening  by Nilus Mattive describes the significance of the public pension situation on the individual public employee who is, or has been "planning," for his or her retirement and expecting that the government will be able to keep its promise. After describing the sad state of affairs facing this public employee, he concludes with this warning.

I’ll Say It Again: Do NOT Count on Any
Government to Pay for Your Retirement!

As we go into this election year, it will be important that each citizen, each of us, consider the promises we made to state and local public employees through the actions of the legislators, council persons, and board members we elected to represent us. And especially those of you who are public employees, consider what the real consequences of your actions as a union member and as a taxpaying citizen have been. Consider where does your true enlightened self interest  rest. Consider what you have done to plan for your future and what you will do now. Consider what your chances are to retire with those rich pension deals negotiated at another time when we were all in a better place. 

The secret to life is change. The secret to success in life is the ability to change in response to a changing environment. Today, is the first day of the rest of your life, are you prepared to change?