How Economic Development Should Work

Brian Bishop takes up the appropriate call to government when it comes to economic development: just get out of the way.

The last thing we need is a government-run Chamber of Commerce, a retread bureaucracy of fortune tellers picking winning businesses or sectors that will be offered state loans and regulatory absolutions. Rather, we should attract new businesses and nourish existing businesses with the level playing field of a better business environment.
You might think this is a time when we need an economic development agency more than ever. It’s not a military secret that Rhode Island is among the nation’s leaders in unemployment, a key indicator of a low-performing economy.
But it is also not a secret why. Corporate and personal income taxes are high, estate taxes are repulsive, energy costs are high, our education system produces a labor force with below-average skills, our legislature has empowered unions over management, our roads and bridges are in worse shape than other states’ at higher costs, our regulatory environment is stifling, and this all takes place in a good-ole-boy environment that breeds, at minimum, a perception of corruption.
In other words, our policies make us unattractive to business, and when you look at these problems you realize they are not to be addressed by the EDC. This systemic hostility to economic growth is brought about by the legislature and all the other departments of state government. These are the arenas where change must take place.

Of course, Jim Beale raises salient questions as we move toward implementation of necessary changes:

Does anyone believe that the Rhode Island General Assembly will enact the major structural reforms necessary to put this state on a new course — a path to prosperity for everyone instead of just their favored special interests: the public-employee unions, their relatives’ state jobs, and the Poverty Institute constituency?
Does anyone believe that absent such reforms — and therefore regime change in the General Assembly — that Rhode Island will not continue its decades-long economic decline?

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Tom W
Tom W
12 years ago

An EDC marketing Rhode Island to business is about as laughable as Michigan hiring Jeff Daniels to appear in television commercials saying what a great place Michigan is to set up shop. You know Michigan, and state with an unemployment rate just ahead of Rhode Island’s, the one also characterized by union dominance?
As Mr. Bishop correctly points out, marketing Rhode Island without addressing the myriad issues which make this state unattractive for business / employers is an exercise in futility. The pooh-bahs in the General Assembly know this – there is another agenda.
At the risk of sounding cynical (and how could anyone be cynical about Rhode Island?), entities like the EDC exist for two purposes.
First, to make it appear to the citizens that Rhode Island government is actually doing something to promote economic growth. The public charade.
Second, to provide an avenue to sucker some companies into the state with special deals, often entailing some remuneration for the leadership in the General Assembly (if not cash, then contracts for their personal businesses / practices, or jobs for relatives, or future lobbying opportunities). The private agenda.
This is the real “public-private partnership.”
(And from the unions’ standpoint, they want businesses to come in via some EDC program instead of organically, for that then requires facility construction to be subject to “project labor agreements” – i.e., union only labor / higher costs for the taxpayers who subsidize the project; and “neutrality” or “labor peace” agreements, i.e., the new company agrees to submit to unionization of its new workforce.)

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