Down Wind from the Fed

That it hits so close to home makes the omission that much more glaring, but Lynn Arditi's article in yesterday's Providence Journal about floundering Rhode Islanders leaves out a huge component of their plight:

The Federal Reserve's surprise rate cut yesterday came too late for Steven A. Bigelow.

His home remodeling and carpentry business, which once grossed six figures, is now off by at least 40 percent, he says. The bank last year foreclosed on his house. And his wife took a job as a school bus monitor so they could get health insurance for their family. ...

Just a few miles from Providence's shiny hotels and Starbucks coffee shops, in the land of variety stores, boarded-up houses and ruined credit, the hope offered by a rate cut seems at best an abstraction.

On Cranston Street, small shop owners are the neighborhood economy's lifeblood. And their condition is critical.

Santos Areas, owner of Appliance Service Sales & Repair, says sales are so slow that he now trades stoves and refrigerators to his landlord to cover his $1,800-a-month rent.

"Right now, I'm a month-and-a-half behind," says Areas, who is 38 and married with a baby daughter. "I'm not even covering my bills and I'm working for free."

He no longer hires anyone to clean the used stoves and refrigerators; he and his wife do it themselves.

"If things keep up like this for five more months," he said, "I'm going to have to shut down."

Back when business was good, Areas used to sell a lot of appliances to people who were buying houses for investments. He bought some properties of his own to rent, too.

Then, the market turned. Tenants couldn't pay the rent. He couldn't pay his mortgage and his houses fell into foreclosure.

Yup. It's all the Fed's fault. Rhode Island's tanking economy, special interest–focused government, and fleeing middle class have nothing to do with folks' difficulties.