October 29, 2008
An Incorrect Mitigation of RI's Gloom
This statement, from an article describing the abysmal state of RI's economy, is incorrect in a very important way:
Six months ago, those who gathered in the State House basement for the semiannual Revenue & Caseload Estimating Conference learned that Rhode Island was the only New England state "in recession," and just one of nine states nationally with that unwelcome distinction."You could say Rhode Island has sort of set the trend for the United States," said Andres Carbacho-Burgos, an economist with Moody's Economy.com and one of a handful of independent analysts who shared a dismal economic forecast with state budget officials yesterday. "Misery loves company. And Rhode Island has plenty of it."
No, you can't really say that Rhode Island has set a trend, because it is incorrect to see us generally as a leading edge. I've heard excuse-making murmurs that Rhode Island's size makes it quick to reveal changes, but there is absolutely no reason to believe that we'll precede the country in getting out of recession.
"We know that this goes far beyond housing. We're losing jobs in every category," said Gary Ciminero, executive director of the House Policy Office.The state earlier in the month learned it had edged out Michigan for the highest unemployment rate in the country, 8.8 percent, the highest in 16 years. The ranks of the jobless last month swelled to 50,200, the most on record, according to the state Department of Labor and Training.
Job losses affected most sectors: manufacturing (down 6.5 percent since last September), retail (down 3.7 percent), construction (down 3.3 percent), financial activities (down 4.1 percent), professional and business services (down 2.2 percent) and state government (down 7 percent).
Rhode Island is expected to continue to lose jobs through the end of 2010, according to the Moody's analysis.
If Rhode Island doesn't act quickly, we may actually see an acceleration of taxpayer and business flight when other states begin to recover. And if RI doesn't even follow the nation on an up-trend, we're in more trouble than most of us care to consider.
I guess we should be happy to see that the state government is the sector leading in job losses. Hopefully, they won't be the leader in job gains when the recession is ending.
I'm not confident that such will be the case while we keep electing the same GA.
Posted by: John at October 29, 2008 6:29 AM"If Rhode Island doesn't act quickly, we may actually see an acceleration of taxpayer and business flight when other states begin to recover. And if RI doesn't even follow the nation on an up-trend, we're in more trouble than most of us care to consider."
speed
Oh, make no mistake about it-RI will not "act quickly". The changes will come at the pulling teeth speed level.
When the history books are written, 2008 will have turned out to have been the "collapse" we have all anticipated. The year where, despite a "crazy taxation system" and "the highest taxes in America" state revenues peaked and headed into freefall and $2.5 billion of taxpayer money evaporated in the Caprio pension debacle.
Everything from here on in is just life-support. Look for the annual tax anticpation notes to creep upward from this year's $350 million until the bond market calls "game over".
Since at least the 1970's it is well established that RI has always been one of the first states to enter recession, and the last out.
And in-between our growth rate lags national averages, much less the southern / Sunbelt states.
The Democrat General Assembly and its special interest puppet-masters have been slowly impoverishing Rhode Island for years.
I wouldn't count on them changing their ways - from their perspective, better to "keep my mouth shut, do whatever the leadership wants, and cash in my chips with a magistrate appointment someday."
Posted by: Tom W at October 29, 2008 10:16 AM“I guess we should be happy to see that the state government is the sector leading in job losses. Hopefully, they won't be the leader in job gains when the recession is ending.”
In essence what happened to the State of RI employees retiring like lemmings to protect 30-35 years of benefits and some were working in their 40th year of service will weight heavily on State of RI operations and ability to provide for state residents for a long time.
The State of RI does not have the 21st information technology infrastructure like other states have so a lot of what happened on Smith Hill was due in part to the “Industrial Knowledge” gained through years of service which has been lost in the exodus. To my knowledge one whole department (Director on down) retired. State lost computer programmers and program analyst that were authors of Department programs.
A vast number of the management and employees that left took with them knowledge base how to accomplish tasks before information technology was introduced and after it has partially been integrated into RI state government workplace.
It would have been better to have had staggered retirements.
You will not be able to replace the “Industrial Knowledge” with newly hired outside consultants.
Cut your nose off in spite of your face!