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Tue, 31 Aug 2010
We're coming down to the home stretch in the primary election season. As you consider the options in the race for Mayor of Providence, ask yourself not what you want the next mayor to be, but what you want the next mayor to do. Do you want a mayor who pretends that the budget is balanced through "tough choices", while the real condition of the city continues to deteriorate? Do you want someone who thinks that the only way to grow jobs is through lavish tax cuts to rich people? If so, you're in luck; Steve Costantino is your guy. He's done all of that -- and more.
23:53 - 31 Aug 2010 [/y10/au] link
Wed, 18 Aug 2010
Banks have been nationalized, manager bonuses limited and huge public debts accumulated. Indeed, about the only element of recent economic thought that remains taboo is blind faith in free trade. That might be a mistake.
Read more.
00:05 - 18 Aug 2010 [/y10/au] link
Fri, 06 Aug 2010
It is beyond question at this point that the US Senate will vote to decrease the number of votes required to pass a cloture motion from 60 to 55 or 50. The only real question is whether it will happen when Republicans next achieve a majority in the Senate or before.
10:49 - 06 Aug 2010 [/y10/au] link
Wed, 26 May 2010
Central Falls: Solving the Wrong Problem
Central Falls is broke, we read. Last week, the city council voted 4-1 to take the city into receivership. And now the commentary sweepstakes begin, with every editorialist and analyst rushing to offer their opinion. I guess I'm among them, but let me start by offering a little ridicule of my peers.
I read one "analysis" that said that Central Falls was too small to be independent, and it should join with Lincoln, Cumberland, or Pawtucket. This is your typical 30-second analysis: superficially plausible, but fundamentally ridiculous. With analysis like this, we'll all be broke soon. Central Falls is in a bind because their property tax revenue can't pay their expenses. Why should any other town want to accept that burden? None of its neighboring towns are exactly pillars of financial strength. Were Pawtucket to annex Central Falls, what would be the result except to bring Pawtucket a step closer to its own fiscal armageddon?
Perhaps it's interesting to ask how they got in this bind? Why, after all, is Central Falls so small? Who was it who thought such a small city was viable? Well, maybe it was all the rich people who used to live there.
15:39 - 26 May 2010 [/y10/cols] link
Fri, 21 May 2010
Is Richard Blumenthal trustworthy?
Is the New York Times?
From the Daily Howler:
...the Hartford Courant’s Colin McEnroe contacted a wide range of Connecticut political reporters about the Blumenthal matter (click here). McEnroe says he “asked reporters, anchors and columnists” to tell him “whether they could remember Blumenthal ever claiming to have served in Vietnam” and “whether they had been under the impression...that Blumenthal had served in Vietnam.” Again and again, these experienced reporters told McEnroe that they had never seen Blumenthal misstate his record, and that they never believed that he had served in Nam. This tracks the earlier statement by Christopher Keating, the Courant’s Hartford bureau chief. On Tuesday evening’s NewsHour, Keating told Judy Woodruff that he had attended many veterans events at which Blumenthal spoke, but he never heard him misstate his record (see THE DAILY HOWLER, 5/20/10).
The original story about Blumenthal increasingly seems to me to be nothing more than an opposition hatchet job, parroted by a credulous Times reporter, who doesn't seem to have realized that working for that paper demands a high level of responsibility and care. Stories there set the agenda for millions of people and thousands of other reporters and professional chatterers, all of whom will use the Times's reputation as a shield for the most insulting and unjustified speculation. I hope Raymond Hernandez is ok with what he's done to Richard Blumenthal and the state of Connecticut (and the US Senate).
The Daily Howler goes on:
This is precisely how it was done to Gore. The bogus claims get their start at the Times, then get repeated, embellished. (At Morning Joe, “eight” turns into “hundreds.”)
Over here, we call this a journalistic disgrace.
19:11 - 21 May 2010 [/y10/my] link
Wed, 12 May 2010
James Galbraith opines:
The idea that funding difficulties are driven by deficits is an argument backed by a very powerful metaphor, but not much in the way of fact, theory or current experience.
Read the rest.
21:00 - 12 May 2010 [/y10/my] link
Thu, 29 Apr 2010
One of the exasperating aspects of American politics is how often elections seem to be decided by something besides the issues at hand. A candidate is deemed to be a nice guy, or someone you'd like to have a beer with, and that seems enough for a lot of people. Scott Brown won election to the US Senate in Massachusetts in January, despite holding policy views at odds with the electorate that voted for him. But he is a more personable guy than the notoriously stiff Martha Coakley, and that and some shrewd marketing was apparently enough for the voters of that fair state.
The truth is that elections must be about more than personalities and ambition. They are how we decide what our government is to do -- for us and to us. When we choose badly, we get terrible results. Voters chose the avuncular and charming Don Carcieri over Myrth York eight years ago, and our state is a wreck because of it -- we have doubled the state debt, forced almost a thousand employees into an early retirement we're paying for now, devastated the budgets of our cities and towns, the economy is worse here than when he began, and he's not done yet.
Certainly the legislature played its part in these disasters, but the same dynamic is in play there. Do you vote for your state representative because he or she advocates policies you agree with, or just because you're neighbors or relatives? Or because he throws nice parties? The substance is what matters -- to all of our lives.
16:38 - 29 Apr 2010 [/y10/ap] link
Wed, 21 Apr 2010
An article at the Huffington Post (by me).
At a recent campaign event, a member of the audience identified himself as a VP for mortgage origination at a national bank with a big presence in Rhode Island. He asked, in horrified tones, whether I was proposing to force his bank to participate in a "social program."
Well... Yup. And the name of that program is "community."
14:56 - 21 Apr 2010 [/y10/ap] link
Mon, 19 Apr 2010
I have a great investment to offer you: you give me $100, and I will give you a cool new cell phone costing $180 in the year 2029. Would you take that deal?
Would you change your mind if I pointed out that you'll save $80 by paying me now instead of later?
The proposition is ridiculous, isn't it? But something very similar is what Senator Dan DaPonte (D-East Providence), the chair of the Senate Finance Committee, is saying when he claims that reamortizing the state's unfunded pension liability would cost us $2.2 billion.
11:41 - 19 Apr 2010 [/y10/ap] link
Wed, 14 Apr 2010
J.K. Rowling on life as a single mom
A second reason, however, was that I am indebted to the British welfare state; the very one that Mr Cameron would like to replace with charity handouts. When my life hit rock bottom, that safety net, threadbare though it had become under John Major's Government, was there to break the fall. I cannot help feeling, therefore, that it would have been contemptible to scarper for the West Indies at the first sniff of a seven-figure royalty cheque. This, if you like, is my notion of patriotism. On the available evidence, I suspect that it is Lord Ashcroft's idea of being a mug.Read more.
18:08 - 14 Apr 2010 [/y10/ap] link
Tue, 13 Apr 2010
In a stage show I toured with for several years, I did a version of the cups and balls magic trick. The object is to make the ball disappear from under one cup and reappear under another. But, I'm sorry to say there is no magic, and the way to do it is just to hide what you're doing and make the audience look somewhere else while you make the switch. This makes for great fun and intrigue as a magic trick. But when such a trick is beneath our state's fiscal crisis, it's problematic.
The New York Times ran an article a couple of weeks ago called "Payback Time" describing how the borrowing practices of states have created perfectly avoidable fiscal crises. Rhode Island was — of course — singled out for special mention. We borrow a lot, more than we ought to, and more than we need to.
The article overstates Rhode Island's problem somewhat by quoting an economist from the conservative American Enterprise Institute, but he's not far off and the truth is that a substantial part of our current fiscal crisis actually is due to unwise borrowing, particularly at the Department of Transportation.
DOT is in hard shape these days. It is spending hundreds of millions of dollars a year, but it can't seem to fix the bridge near my house, and it can't seem to fix the I-95 bridge in Pawtucket, either. How did it get that way? By hiding the problem and getting people to look somewhere else.
12:29 - 13 Apr 2010 [/y10/ap] link
Wed, 07 Apr 2010
Mark Twain wrote that everyone complains about the weather, but nobody does anything about it. But that's not true.
The catastrophic floods last week have closed businesses and ruined many people's homes. We can be grateful there was no loss of life, but it was an epic tragedy in lost property, time, and wages.
This past week I heard a lot of people say the disaster was a "hundred-year" flood. We only hope that's correct. The rain was certainly intense, but we've been busy over the years, preparing the ground to make floods worse.
The fact is that Rhode Island does not value its open space, and that is simply asking for trouble when it rains. Some of the trouble is obvious: building on a swamp or right to the edge of a river bank is risky because that's where the water goes when it rains. Some is more subtle: rain that might be absorbed by dirt runs right off asphalt, or a roof. Every swamp we replace with a parking lot, every woodlot we raze for a strip mall or big-box store, and every farm we convert to suburban housing just makes water run down to the rivers faster than it used to. The entirely predictable result: when it rains, rivers run faster and higher today than ever before.
00:08 - 07 Apr 2010 [/y10/ap] link
Tue, 30 Mar 2010
Anticipating a problem before it's a problem is a good idea
New York Times Article about runaway debt in the states, with particularly unkind words about Rhode Island's borrowing policies:
Rhode Island Policy Reporter articles about runaway debt in our state, with particularly unkind words about Rhode Island's borrowing policies. (Especially DOT.) From:
It's nice to be right, and anticipating a problem before it happens is good, but it's nicer to have been able to prevent a problem. Did I mention I'm running for general treasurer in order to prevent the next problem?
17:44 - 30 Mar 2010 [/y10/ma] link
Tue, 09 Mar 2010
Much has been made nationally of the Obama administration's stimulus package and efforts to turn around one of the weakest economies we have seen in decades. But in Rhode Island, our politicians have enacted counterproductive measures that have only harmed Rhode Island families and small businesses and continue to hold us back. It is not too late to turn around these policy decisions and take decisive action to put working Rhode Islanders first, but it will require stronger voices than we have seen at the Statehouse in recent years.
The problem is that state leaders have seen only one path to economic development: increase investment. This has led them to promote tax cuts for the rich, among them the "flat" tax. In order to pay for those tax cuts, the state government has absorbed some of the Obama stimulus money that should have gone to cities and towns, and to schools. Property taxes have been increased, leaving thousands of working families with even less money to spend. We've laid off municipal workers and teachers, and made cuts in education, Medicaid, and other services used by ordinary Rhode Islanders.
These policies send a clear signal that our leaders in the statehouse, notwithstanding rhetoric to the contrary, have not really been helping working families in Rhode Island. Rather, they've used the stimulus money to make up for foolhardy tax cuts for the wealthy -- tax cuts that will not in any way help our economy but will certainly help the corporate and monied interests who unduly influence too many elected officials.
But won't investment help? The idea that a lack of investment is limiting our state's economy is just not supportable. If anything, our state suffers from too much investment. We are still feeling the effects of a collapse of a speculative bubble in housing. How do you have a speculative bubble without investment? Rhode Island's problem is not a lack of funds to invest, but a shortage of productive places to invest them in.
What's more, a strategy of investment is inadequate given the scale of the problem. In its most recent annual report, the Economic Development Corporation boasts their $1.6 million loan fund has created 63 jobs and protected 396. That's great, but there are over 70,000 unemployed people in our state. What do we tell the rest?
16:20 - 09 Mar 2010 [/y10/ma] link
Tue, 02 Mar 2010
Strong consumer protection needed
Congress is choosing now between a wishy-washy do-nothing bill that pretends to do financial reform and consumer protection on financial matters, and a much stronger bill that actually has teeth and an independent Consumer Financial Protection Agency (CFPA). Read my letter to Jack Reed about the choice here.
17:04 - 02 Mar 2010 [/y10/ma] link
Wed, 03 Feb 2010
Readers here might be interested to know that Tom Sgouros, the editor of this site, is running for the Democratic nomination for General Treasurer in 2010. See a story or the official website: tomfortreasurer.com.
10:35 - 03 Feb 2010 [/y9/de] link
Fri, 11 Dec 2009
Banks are in the news again, and not really for the best of reasons. Congress is just getting rolling on debating the reform of financial regulation, and we're hearing a lot about, well, unhelpful banking practices.
"Overdraft protection" for example. This is a system where the bank will honor a check that might overdraw your account, but charge you a stiff fee for the privilege. You can appreciate the beauty of this scheme with an account holding $300 and two checks, one for $400, and one for $15. Without overdraft protection, one would bounce and you'd be dinged for that one, but the other would clear no problem. With overdraft protection, the bank can charge you for both checks, because the first one makes the account balance negative, and the second makes it worse. In essence the bank is giving you a small loan, at potentially astronomical rates. Peter Wasylyk, a Rhode Island attorney, is currently trying to organize a class-action suit against big banks for this practice. (He's also a state representative from Providence.)
What else? It was reported in the Providence Journal a couple of weeks back that local banks are not participating in a part of the federal stimulus package meant for them. This provision was meant to provide very low interest loans or credit lines to area small businesses. As of the end of November, only 13 Rhode Island businesses had received loans, from only four banks. Most of the other banks complained of too much paperwork, or simply ignored the program.
And, of course, we can't forget the enormous executive bonuses paid by the big banks (including BankAmerica) straight out of federal bailout money.
But why are they doing these things? It's not because they're evil, but because they feel pushed into it. Banks are an essential part of our market economy. We can't do without them. Ben Bernanke (and many others) call credit the lifeblood of the American economy. But banks are also economic actors. They have to attract good talent, they have to have their loans repaid, and they have to earn money. The problem we all face is that there are lots of ways to do these things, and only some of them are good for the rest of us. For example, a bank could make money by getting its branch security guards to confiscate the wallets of its customers. Presumably a bank that did this would start losing customers -- unless all the other banks were doing the same thing.
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