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RIPR is a (paper) newsletter that looks at local, state and federal policy issues that affect life here in the Ocean State. Each issue focuses on particular policy areas of interest. Future issues will examine controversial aspects of environmental policy, health care, state tax reform, and education spending. The intention is to look at action rather than talk. RIPR also issues a weekly column about public policy, carried by ten of Rhode Island's finer newspapers. See here for an archive of recent columns. If you'd like to help, please contribute an item, suggest an issue topic, or buy a subscription. If you can, buy two or three (subscribe here). Search this siteAvailable Back Issues:
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Links:Links pageRSSRIPR is primarily a print publication (yikes! how 20th century!), and the work it represents is supported by its subscribers. Feel free to use this link to an RSS feed for the blog, but the real meat is in the newsletter, so come back and subscribe when you have a chance. Responsibility: Tom Sgouros
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Sun, 04 May 2008
The House of Representatives last week approved the Governor's supplemental budget for this current year. They approved of the plan to take back $12.5 million from all the cities and towns before the end of June, throwing 39 municipal budgets into chaos. This plan also cuts 2700 immigrant children from RIte Care -- including more than a thousand who are here legally -- and forces state employees to take six furlough days. There are some minor deviations from the Governor's original proposal, but they are nothing compared to the agreement.
My favorite: cutting $26 million from Rhode Island Housing. This agency gets its money from federal housing grants and from borrowing. Using their money to balance the budget means we are using either borrowed money or federal housing grants. I report, you decide which is worse.
The sad truth is that the Governor and the leadership of both houses of the Assembly are reading from the same script. The Assembly leadership team call themselves Democrats, but so what? They are for slashing pensions and health care for state and municipal workers and ending important (and cost-saving) social programs. All the while, they are cutting taxes for rich people, while the upward pressure on local property taxes remains as bad as ever. In what meaningful way is this a Democratic agenda? Maybe they mean that the program cuts cause them more pain than they cause Republicans.
02:37 - 04 May 2008 [/y8/cols] link
Sat, 26 Apr 2008
Lenny Bruce used to say he didn't believe the stories about dolphins pushing drowning sailors to shore. He said dolphins just like to push people around -- and you never hear from the people who get pushed away from land.
As a nation of immigrants, we hear a familiar line whenever immigration comes up: "My grandparents came here and they worked hard and they did fine." And whenever I hear it, I think of a Greek uncle of mine, Niko, who I knew when I was little. He wasn't strictly related, but he was married to Georgia, my aunt's best friend, and frequently showed up at family holidays where I played with his daughter Photini. Niko never really mastered English, and I remember him sitting quietly by himself somewhere to the side of the action during those holiday gatherings. Sometime around when I was 16, Georgia died and he decided that America just wasn't for him, and moved back to Athens.
18:44 - 26 Apr 2008 [/y8/cols] link
Sun, 20 Apr 2008
Every time you see a TV ad with shaky camera work, think that you're seeing the commercial use of what was once a hallmark of the non-commercial, and marvel at the free market's ability to co-opt pretty much everything — including economic policies originally meant as a critique of business-as-usual market capitalism.
Communist revolutionary Che Guevara rapidly became an inspirational figure for revolutionary socialist change after his execution in Bolivia in 1967. Forty years later, Che lives on but his image now adorns t-shirts that have become popular fashion statements. This transformation reflects the extraordinary power of markets to capture and transform, turning an avowed enemy of the market system into a profit opportunity.Read more here.The process of capture also holds for economic policy, which has witnessed the conservative capture of Keynesianism. This capture is now on display as U.S. policymakers struggle to contain the effects of a collapsing house price bubble that was recklessly funded by Wall Street. The sting is that the full powers of Keynesian policies are being invoked to save an economy that no longer generates Keynesian outcomes of full employment and shared prosperity.
18:04 - 20 Apr 2008 [/y8/ap] link
Fri, 18 Apr 2008
What? There's actual data to inform the discussion of illegal immigration and its effect on the state budget? Huh.
Here's the Congressional Budget Office's review of 29 reports about the fiscal impact on state and local budgets.
What does it say? It says that illegal immigrants pay more in taxes than the services they receive, but that they pay most of it in federal taxes, and the services they use are state and local services. Federal services typically deny assistance to illegal immigrants, but federal laws and court rulings deny that possibility to states and towns.
Immigration is, of course, largely a federal problem. It's the federal government that turned a blind eye to employers who came to depend on cheap labor from the south. So immigration is, again, a case of the powerful shifting the cost for their bad decisions onto someone else, simply because they can. The real mystery is why everyone gets mad at the immigrants and not at Congress or the President.
Here is a page of research from Federation for American Immigration Reform (FAIR). They would seem to be the source of a lot of the data used in debates about illegal immigration here. I couldn't help but notice that they are on the high side of all the relevant estimates, though perhaps within the margins of error.
16:02 - 18 Apr 2008 [/y8/ap] link
Thu, 17 Apr 2008
Is at the printer.
- Eric Hirsch on homelessness and the housing market. How income polarization has affected homelessness in more ways than you think.
- What car imports in the 1980's and the housing market of the past few years have in common. See here.
- Review of Dan Ariely's book "Predictably Irrational", a behavioral economic account of irrational behavior.
Didn't you mean to subscribe today?
17:52 - 17 Apr 2008 [/y8/ap] link
Tue, 15 Apr 2008
It's now quite clear that nothing is going to happen to the President who has openly admitted that he authorized torture, and that, far from being the acts of a few bad apples, our appalling descent from at least a pretense to the moral high ground was engineered by decisions made at the very top.
It's hard to find words to express the astonishment at how quickly our country could descend to barbarism. Not to mention the sadness.
Here's someone who tried.
Background summarized well here.
09:56 - 15 Apr 2008 [/y8/ap] link
Sun, 13 Apr 2008
A historic blunder on tax credits
We got a taste last week of how House Finance intends to deal with the fiscal crisislast week. What did we learn? We learned that the distance between the House leadership and the Governor can be measured in small fractions of a millimeter. Challenged to do something about the burgeoning cost of the Historic Structure tax credit, they decided not to limit it to affordable housing developments, or to cap it, but to deep-six it altogether.
To understand this story, you need to understand how tax credits like this work. It's not that hard. Suppose you want to rehabilitate some historic building. If it meets the criteria, you are eligible for a 30% credit against your taxes. But suppose you don't ever owe that much, or suppose you're a non-profit who doesn't pay taxes? In that case you can sell your credit to someone who wants a break. If you have a credit for $100,000, and you sell it to your friend for $80,000, then you're $80,000 ahead, and your buddy gets to use your credit to pay his taxes, so he's ahead $20,000. Sweet, no?
12:16 - 13 Apr 2008 [/y8/cols] link
Thu, 10 Apr 2008
Another corner turned in the war on drugs. Apparently poppy production in Afghanistan is down. Why? It's more profitable to grow wheat this year.
Isn't that great? And it comes in bags of white powder, too.
11:03 - 10 Apr 2008 [/y8/ap] link
Sun, 06 Apr 2008
Handy/Moura hearing: special tax breaks and the general good
Last week, there was a State House hearing about the "Economic Growth and Fairness Act," a complex tax reform bill sponsored by Representative Art Handy (D-Cranston) and Senator Paul Moura (D-East Providence). (First, the full disclosure: I did research to support this bill, and testified for it. I've never claimed to be an objective journalist, only an honest one.)
Before the hearing, there was a rally in the rotunda protesting cuts to Head Start, the early-childhood education program. "Great," you say, "yet another interest group, trying to protect its special program that's costing us money." I watched the rally, then went downstairs to the hearing.
And do you know what I saw there? Lots of other interest groups trying to protect their special programs, mostly tax breaks. The difference? These people were wearing nice suits. (So was I. As I said: full disclosure.)
12:19 - 06 Apr 2008 [/y8/cols] link
Sun, 30 Mar 2008
What do you think about the Electoral College?
What was the most outrageous thing about the election of 2000? You might think it was the conduct of Florida's election, or the way the Supreme Court ruled that counting votes wasn't as important as preserving George Bush's presumption of victory. I think it was the fact that the loser got half a million more votes than the winner. Is this how we want to run a democracy?
As most of us realized in 2000, we don't have a national election for president. We have 50 elections to choose "electors" who go off and meet as the Electoral College and choose the president. The College is one of those undemocratic vestiges of a time when the founding fathers were willing to endorse democracy in principle, but not so much in practice. This year, there's a bill in 44 state legislatures, including ours, that could spell the end of the Electoral College. It has an uphill battle here, though, and needs your support to get through the Assembly.
23:00 - 30 Mar 2008 [/y8/cols] link
Sat, 22 Mar 2008
Evading the rules and learning from experience
Last week, the news was about the RI Resource Recovery Corporation, and it was enough to give anyone pause. A state audit uncovered land deals that seem pointless to the agency's charge, charitable contributions that seem to have been made at the pleasure of various RRC board members, and legal work awarded to friends and relatives.
There was some related news, too, though maybe it didn't seem that way to you. The House is considering a move by Governor Carcieri to merge the state's three environmental agencies, CRMC, DEM and the Water Resources Board. CRMC fired a salvo in that battle by pointing out that DEM workers had violated some wetlands rules by clearing land at Fishermen's park. (This was apparently not news at DEM and seemed mostly an attempt by CRMC to embarrass people into dropping the idea of the merger.)
What's related about these? Just this: both agencies were created to get around what were perceived as overly restrictive state rules, and both have lived up to their founders' intentions by becoming havens for, well, let's call it something less than the professionalism I expect from my government.
17:41 - 22 Mar 2008 [/y8/cols] link
Sun, 16 Mar 2008
It sometimes seems I spend too much of my time writing about taxes on the rich and the poor. It's uncomfortable territory on which to stake one's tent. People accuse you of socialism, and make sneering remarks about not getting the memo about the fall of the Soviet Union. This gets dull, to be honest, but the truth is I occupy this uncomfortable (and fairly lonely) little outpost not for ideology, but because the arithmetic drove me there. A transfer of taxes from rich people and corporations to the poor and middle is what we've experienced at both the state and national level over the past 25 years. There's simply no way to get around it, because that's what happened.
17:21 - 16 Mar 2008 [/y8/cols] link
Sat, 08 Mar 2008
One of the persistent myths about the conduct of our state government is that the Governor and Assembly are two poles of a struggle. The idea is somehow that the Governor is engaged in a titanic battle for control over our government, pushing to cut expenses and hold the line on taxes, and Democrats in the Assembly are thwarting him at every turn.
This is, however, absurd in almost every particular, a fairy tale that bears almost no relation to what really goes on under that big white dome.
00:23 - 08 Mar 2008 [/y8/cols] link
Tue, 04 Mar 2008
Via here, I read that US corporations are apparently flush with cash. From the New York Times:
The increase over the last decade in the amount of cash, as a percent of total assets, for the companies in the Standard & Poor's 500-stock index has been steep....According to S.& P., the total cash held by companies in its industrial index exceeded $600 billion in February, up from about $203 billion in 1998.
This is not at all surprising. As was noted last year in RIPR 25, declining investment opportunities may have already become the most significant untold economic story of the 21st century. During the Depression, economists clearly saw that this was a problem to be addressed, and academic disputes raged about why opportunities were in decline. (Joseph Schumpeter and Alvin Hansen representing two of the important antagonists.) But after WWII, there was plenty to invest in, and the topic faded from importance.
But just because a topic isn't trendy doesn't mean that it isn't relevant, and that appears to be what's happening here. Ask yourself: if $40,000 dropped in your lap tomorrow, what productive investment would you make with it? Can't think of anything? You're not alone, and that's a problem.
09:57 - 04 Mar 2008 [/y8/ma] link
Thu, 28 Feb 2008
The Roberts plan: Taking on health care?
Apart from the foolish tax cuts I write about so often, most of the budget ills afflicting our state and municipal budgets can be traced to exploding health care costs of one kind or another, whether it be health benefits for employees or Medicaid expenses. It's been fairly pleasant, therefore, to hear the noise that Lt. Governor Elizabeth Roberts has been making about health care reform over the past several months.
During the fall and winter, amid a fair amount of publicity, Roberts convened a "working group" of people to speak and brainstorm about what health care reform in Rhode Island should look like. A couple of weeks ago, we saw the fruits of the effort, and she announced the introduction of the "Healthy Rhode Island Reform Act of 2008."
The plan consists of several parts. There is a requirement that people who earn more than four times the poverty line buy health insurance. There is another provision that creates a "Hub", a non-profit organization to offer health plans to individuals and small businesses, with a modest subsidy provided by assessing a fee on businesses that don't provide health care for their employees ($1,000 per uncovered employee). The plan also proposes to increase competition among health insurance companies by allowing insurers licensed in Massachusetts or Connecticut to do business in Rhode Island, and there are some attempts to gather cost information about health care and insurance, too.
So, what will the Roberts plan do for a small business owner who already buys his own insurance? (I'm thinking of me here.) Pretty much nothing. Mandates in the plan only require that I do what I already do. I'm not looking for a handout, but there's a lot to fix. The Roberts plan doesn't even promise that costs will be kept under control, only that mechanisms will be established that some future government might use as a small part of a scheme to control costs. Pardon me for not jumping with joy.
21:03 - 28 Feb 2008 [/y8/cols] link
Mon, 25 Feb 2008
Did you know that health insurance in Rhode Island is a bargain for some people? And quite expensive for some others. Check out tables VIII.C.1 and VIII.D.1 in the 2005 federal HHS Medical Expenditure Panel Survey. Compare Rhode Island's average expenditures in various wage classes with other states that have more competition, and then tell me again how increasing competition among insurers in Rhode Island will help lower our costs.
Why is this relevant? Well, Elizabeth Roberts health plan is really mostly about increasing competition among insurers to lower costs. There aren't any other controls envisioned, even though there are provisions made that might make it easier to establish controls at some future date. But I think the evidence that a lack of competition is what ails us is pretty thin, making it pretty unlikely that enhancing competition is going to be very effective "reform."
13:05 - 25 Feb 2008 [/y8/fe] link
Mon, 18 Feb 2008
Took a long time, but it's at the printer. Watch your mailbox:
- Did you know the IRS publishes migration data? Did you know it has something to say about who's leaving and who's arriving and how much they earn?
- Medicaid: what are the components. Probably not what you think.
- Judith Reilly: Confusing the state's two historic tax credit programs. Please don't.
- A Wall Street Sub-primer.
Plus a special bonus on the battle flag of the First Rhode Island Regiment.
Didn't you mean to subscribe?
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