Rhode Island Should Fear a National Recovery, and Get Moving
At least since October, I have been suggesting that Rhode Island’s status as a business-unfriendly economic pit will make it more difficult for our economy to recover along with the nation’s. Current policies have been driving out the “productive class” for years, and not only is this the critical demographic for economic recovery, but it consists of people who are able and willing (perhaps reluctantly) to move in search of opportunity. If Rhode Island lags the nation in supplying that opportunity, it will be attempting to gain its economic footing from the bottom of a landslide.
Benjamin Gedan’s article on the front page of yesterday’s Providence Journal provides the first hint that the mainstream of Rhode Island society is beginning to catch on:
… the bible-length list of boarded-up storefronts is arguably more alarming. Vanishing companies increase unemployment, reduce corporate spending that supports suppliers and vendors, and deprive government of desperately needed tax revenue in a state struggling to erase a $357-million budget deficit.
Perhaps more worryingly, the exodus [of small businesses] jeopardizes the state’s prospects for a quick recovery when economic activity elsewhere in the country finally picks up. Starting a new business requires financing, planning and building that delay job creation.
“The longer the recession lasts, the more businesses go under and the longer the recovery will take afterwards,” Andres Carbacho-Burgos, an economist for Moody’s Economy.com, said. “The recovery will be slower and more tentative.”
In a static world, government leaders could approach that conclusion with tentative policies, but we live in a dynamic society. Consequently, one must adjust this factor…
Some economists, meanwhile, say there is reason to believe many businesses could be reborn as swiftly as they toppled.
“You’re going to get new businesses forming,” Robert Tannenwald, vice president at the Federal Reserve Bank of Boston, said in an interview. “Capital is a lot more mobile than it used to be. Entrepreneurship is at a much greater level than it was 20, 30 or 40 years ago.”
… to account for human agency. Capital and markets will appear beyond our state borders before they are sighted within, and few entrepreneurs will care to wait for opportunity to break through the Bristol Wall.
What Rhode Island must do is move quickly to realign policies to make our state the first to see investment and the creation of new businesses. This means (as I’ve been repeating like a mantra), slashing government spending and taxes, combing (like lice) all excessive and annoying regulations and licensing out of state law, and redirecting all available funds to infrastructure.
Considering that the General Assembly seems mired in a delusional hope that residents will just forget that there’s currently a supplemental budget sitting around awaiting approval, while the state spends more than a million dollars per day that it doesn’t have, the possibility is slim that our legislators have the guts and brainpower to position Rhode Island to lead the nation out of recession, as we led it into recession. But the governor, the GOP, and all like-minded independents and moderates should take up the call now and declare it unwaveringly to ensure that the Democrats and progressives bear the consequences of their stupidity and cowardice.