February 28, 2009
Everything Is Rosy, Now Obama's Found Rosy
So that two-trillion-dollar deficit? Turns out it might be the optimistic scenario:
The administration insists it isn't so, but some private economists are wondering if the Obama administration has brought "Rosy Scenario" back to town.In unveiling his budget, President Barack Obama pledged to bring "honesty and fairness" back to the budget process by getting rid of the gimmicks past administrations had used to hide the real costs of government programs and proposed tax cuts.
But many economists who examined the economic assumptions that undergird the spending plan believe that Obama may have resorted to one of the oldest gimmicks around — relying on overly optimistic economic assumptions to make it look like you are dealing with soaring budget deficits when in reality you are only closing the gap on paper.
I suppose nobody should have expected that the president would be able to change the world on the cheap, and as Mark Steyn reminds us, that is the project on which our nation has now embarked:
If you find it hard to keep track of these all these evolutions, the President in his address to Congress finally spilled the beans and unveiled our new hero in his final form: the Incredible Bulk, Statezilla, Governmentuan, a colossus bestriding the land like a, er, colossus. What superpowers does he have? All of them! He can save the economy, he can reform health care, he can prevent foreclosures, he can federalize daycare, he can cap the salary of his archenemies the sinister Fat Cats who "pad their pay checks and buy fancy drapes." No longer will the citizenry cower in fear of fancy drapes: Pay no attention to the man behind the curtain! With one solar panel on the roof of his underground headquarters, Governmentuan can transform the American energy sector and power his amazing Governmentmobile, the new environmentally friendly supercar that soon we’ll all be driving because we'll be given government car loans to buy the government cars! He'll have hundreds of thousands of boy sidekicks, none of whom will ever be allowed to drop out of high school because (in the words of his famous catchphrase) "that's no longer an option!" "Gee, thanks, Governmentuan!" says Diplomaboy the Boy Wonder, as he goes off to college to study Gender As A Social Construct until he's 34.
A truly hillarious article in today's NY Times. The most amusing part is the opening paragraph-"is in the midst of an especially grim economic meltdown, and no one can pinpoint exactly why.".
LOL. Now we see why leftist newspapers are rapidly heading toward oblivion. One of the most corrupt, highest taxed states with policies which repeatedly tell productive people to "screw" while telling leeches from all America and beyond to "come hither", with twice as many employees per capita making twice as much total compensation as the national per capitas and these geniuses just can't "pinpoint exactly why".
Here is the article-
Smallest State Faces Economy-Size Problems
Jodi Hilton for The New York Times
Laid-off Colibri workers rallying for pay and benefits.
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By ABBY GOODNOUGH and KATIE ZEZIMA
Published: February 28, 2009
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Jodi Hilton for The New York Times
A onetime office building in Providence represents Rhode Island’s past — it was built in 1740 — and present: it is vacant.
PROVIDENCE, R.I. — Rhode Island is in the midst of an especially grim economic meltdown, and no one can pinpoint exactly why.
The smallest state, it is saddled with some of the nation’s biggest problems: the second highest unemployment rate, at 10 percent, according to the latest federal figures; and among the highest foreclosure rates, widest budget gaps and most-vulnerable pension systems.
Rhode Island is arguably the most economically hobbled state after Michigan, whose troubles and 10.6 percent unemployment rate are far easier to explain as the auto industry collapses. Now, as Rhode Island contends with a foundering economy and a stagnant, aging population, its leaders are scrambling to determine how to make the state more resilient and put it on a par, finally, with its more prosperous neighbors.
In several dozen recent interviews, Rhode Islanders agreed on this much: Their state’s smallness has contributed to its problems, but could be its best asset if properly exploited. Saul Kaplan, who until December was executive director of the Rhode Island Economic Development Corporation, called the state’s size a “secret sauce” that could help businesses develop products or services quickly.
But many of those interviewed said that, instead, the smallness has trapped the state in parochialism, insecurity and outdated traditions that block change at every turn.
“The whole political system is based on back scratching and getting things for your friends,” said Robert Whitcomb, editorial page editor of The Providence Journal. “That’s true for every place, but more so here because of the intimacy — you keep bumping into people you know.”
As the lyrics of University of Rhode Island’s fight song suggest — “We’re Rhode Island born and we’re Rhode Island bred, and when we die we’ll be Rhode Island dead” — natives of the state, including lawmakers, rarely cast a curious eye outside it, Mr. Whitcomb and others said.
“They focus primarily, if not exclusively, on us and on the here and now,” said Leonard Lardaro, an economics professor at the university. “We need to be looking at a lot of other states — what they do and how we compare.”
One striking difference is that Rhode Islanders are less educated than much of the country. The state has the lowest high school graduation rate in the Northeast and ranks 38th nationally. Its average private-sector salary in 2007 was $39,827, compared with $55,819 in Massachusetts and $59,174 in Connecticut.
Unlike its neighbors, Rhode Island continues to rely heavily on blue-collar and service-industry jobs. Its largest employment sectors are health care, manufacturing and retail, which pay $27,000 to $46,000 a year on average.
“In that way, we look more like a rust belt state than Connecticut or Massachusetts,” said Laura Hart, a spokeswoman for the State Department of Labor and Training.
Rhode Islanders also tend to cling to old stereotypes about the state, like its mob culture and corrupt politicians, others said.
“A lot of Rhode Islanders overestimate how uniquely bad we are,” said Scott Wolf, executive director of Grow Smart Rhode Island, a nonprofit group, “and underestimate how uniquely good we are.”
Gov. Donald L. Carcieri, a Republican, and the overwhelmingly Democratic General Assembly have often found themselves at loggerheads, with the legislature more focused on supporting social programs and Mr. Carcieri on shrinking government since he took office in 2003. Organized labor remains a powerful force, and the state’s unfunded pension liability, $7 billion, is among the worst in the country.
Mr. Carcieri has proposed a minimum retirement age of 59 for government workers and eliminating 3 percent annual increases in their pensions. The proposals are part of his plan to close a $357 million gap in this year’s budget, one of the largest in the country as a percentage of state spending.
But several people said Mr. Carcieri should be more focused on the private sector, particularly on creating more high-paying jobs. More than a quarter of Rhode Islanders who earned more than $100,000 in 2006 claimed an out-of-state tax credit, indicating that they might work for companies based elsewhere.
Mr. Carcieri does want to change the tax structure, which is generally considered uncompetitive with those of neighboring states. State leaders cringed last fall when Jack Welch, the former chairman of General Electric, said on Fox News that Rhode Island’s tax structure made it “the 48th-most-acceptable state for business.”
In fact, a study last fall by the Tax Foundation, a nonpartisan group in Washington, ranked Rhode Island’s business climate the fifth-worst in the nation.
Notwithstanding its northern neighbor’s reputation as “Taxachusetts,” Rhode Island’s top personal income tax rate is higher, 9.9 percent. The top rate in Massachusetts is about 5.3 percent, and in Connecticut, 5 percent.
Mr. Carcieri, whose spokeswoman said he was too busy to be interviewed, wants to phase out Rhode Island’s corporate tax. The rate, 9 percent, will soon be higher than in Massachusetts, where it is 9.5 percent but will drop to 8.75 next year. Connecticut’s rate is 7.5 percent.
“People sell their businesses and leave because the taxes are so punitive,” said Dan Shedd, president of the Taylor Box Company in Warren, which has laid off more than half its employees since Thanksgiving and faces, he said, “a nonstop challenge to try to stay relevant.”
As in other New England states, manufacturing used to be the pillar of Rhode Island’s economy, but the state has lost jobs to lower-cost Southern states and other countries. Unlike some of its neighbors, however, Rhode Island has not found lucrative replacements.
Health care is Rhode Island’s largest employment sector and one of the few expected to grow in the short term, driven in large part by the state’s aging population. About 14 percent of Rhode Island’s one million residents are over 65, compared with 12.4 percent nationally.
Rhode Island Hospital is the state’s largest private employer, followed by the CVS drug store chain, which has its headquarters here; Citizens Financial Group; Bank of America; and Brown University.
A number of people interviewed said the state had focused on recruiting large corporations at the expense of the kind of small businesses that employ most Rhode Islanders. Two major corporations that Rhode Island courted with tax breaks, Bank of America and Fidelity Investments — which built the largest office complex in the state — recently announced layoffs.
Mr. Wolf, of Grow Smart, said the state should capitalize more on its 11 colleges and universities, including Brown and the Rhode Island School of Design, and give their graduates more incentives to stay.
“State government hasn’t been aggressive enough about saying to the universities, ‘What’s your research right now, and how can we make it easier to use it to grow businesses in Rhode Island?’ ” he said.
Mr. Kaplan, who now heads a nonprofit group in Providence that encourages entrepreneurs to exchange ideas, said he saw boundless energy in what he called the “geek community” — young, technology-savvy entrepreneurs who are quietly opening small companies.
Jack Templin, a consultant who founded Providence Geeks, a networking group for people in digital media and information technology, said the energetic group could help shape a new economic development model. Over dinner recently, several of its members echoed the view that the state is small enough for individuals to effect change.
“I don’t think there’s a lot of places where you can pick up the phone and talk to the governor or the mayor,” said Allan Tear, who moved to Providence from Atlanta after making a spreadsheet about the pros and cons of eight cities around the country.
Many of those interviewed said the innovative spirit that fueled the Industrial Revolution here must return if the state is to bounce back. Perhaps most crucially, many existing companies need to reinvent themselves to survive. Mr. Shedd’s company has done just that: it first provided boxes for the state’s once-dominant jewelry industry, then for the software industry, and most recently for gift cards.
He stays, he said, because he loves the state’s beauty and its quirkiness, both of which keep drawing people like Marjory Garrison, a 30-year-old consultant to nonprofit groups.
Ms. Garrison moved to Providence last summer from Brooklyn and became so captivated that she started her own recruitment campaign, plastering neighborhoods in Atlanta, Boston, Brooklyn and Seattle with posters that shout “Move to Providence!”
“It has so much going for it, and so much of that is still under the surface in a lot of ways,” she said. “I think people here believe that once you crack that open, anything is possible.”
Posted by: Mike at February 28, 2009 12:48 PMI missed it! When did the Obamaniacs sneak into Providence to get their revenue estimating training from our General Assembly leadership?
The lunacy makes ya wanna bust out in song.
Posted by: john at February 28, 2009 1:53 PMSteyn forgot to mention the upcoming iteration:
WEIMARMAN!
Printing money faster than a speeding bullet!
Taxation more powerful than a locomotive!
Able to establish socialism in a single bound!
Posted by: Tom W at February 28, 2009 3:20 PM