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:

Here

Rhode Island Policy Reporter articles about runaway debt in our state, with particularly unkind words about Rhode Island's borrowing policies. (Especially DOT.) From:

• 2008
• 2006
• 2004
• 2004
• 2003

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]

Tue, 09 Mar 2010

The Opposite of Stimulus

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?

It is disappointing that the most effective ways to use the stimulus money to help working Rhode Islanders and our small business community seem to get no attention. For example, winter is almost over and the funds for weatherization of people's houses have barely been tapped. The state reported that just nine houses were weatherized in January with this program. That's money that should have employed contractors, and saved money for the very people who need it most.

To get our economy moving again we need more money in the pockets of people who will spend it. This will increase business at local grocery stores, restaurants, and shops. The activity there will create those missing investment opportunities as business people decide to hire, expand or open new small businesses.

Who are those people? There are over 300,000 tax returns filed every year in Rhode Island for people and families with less than $50,000 of income. With their dependents, this is almost half the state. If we want to get the economy moving again, we need policies to improve their lives and put money in their pockets. This should include, at minimum, meeting living wage standards in contracting, changing the laws to put teeth into utility and health care rate regulation, improving public transit, getting that weatherization program in gear, or just making sure there are enough computers in our libraries for people who need to use them to look for work. Yes, money is tight, but we must not balance the budget on the backs of working families yet again.

Want to help small businesses? Let's not fool ourselves with nice, but inadequate, loan programs and talk of investment. Let's find ways to give them more customers instead.

The treasurer's office can play a role in this by redirecting into our state's economy the money we currently pay to distant creditors, by using local financial expertise where possible, by reforming the way we do our financial business to avoid borrowing through the big investment banks on Wall Street, and through consumer protection reforms and financial literacy education to help people save money that might otherwise go to banks and credit card fees.

The economy and jobs in Rhode Island should be the focus of debate for all candidates who are asking the voters to put their trust in them -- whether they are running for Governor, General Treasurer, or state legislative seats. My opponent for General Treasurer has suggested that local investment of a few percent of the pension fund would be a "shot in the arm" for the local economy. But it would be a pinprick at best. I look forward to debating this over the course of the next six months on the campaign trail.

There is much that can be done before the elections in the fall. New leadership in the Assembly is a reason for hope, but Rhode Islanders should be clear with their elected leaders that easing the way for increased investment in the state's economy is only important after people have enough money to buy stuff. End the flat tax so we can restore funding to cities and towns, get the stimulus funds out the door and into the economy, and concentrate state policy on helping the vast majority of our citizens, rather than just those few at the very top.

Until we take these steps, state policy will remain the opposite of stimulus -- a drag on the economy and a guarantee that, once again, Rhode Island will be the last state to recover from the economic downturn.

16:20 - 09 Mar 2010 [/y10/ma]

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]

Ads and the like:

Rhode Island 101
(A funny book you should own)