38 Studios sucks, but we need to pay the bill


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MoodysLet me ad some very insightful commentary on the whole 38 Studios saga: it sucks.

It sucks that much of the legislature feels they were conned into providing the cash for the deal. It sucks that Don Carcieri would recruit Schilling to bring his company here. It sucks that anyone in the then-EDC would believe it was a worthwhile deal. It sucks that we’d invest so much money in a long-shot product. It sucks that 38 Studios collapsed, mainly due to sucky management. It sucks that there was little oversight from the state on 38 Studios, despite being a major investor. It sucks that we’re repaying the investors who were already insured in case of 38 Studios’ failure. It sucks that the state used a “moral obligation” bond rather than a “general obligation” bond to provide the money, and to circumvent voters. It sucks that all of Rhode Island’s credit is being threatened by ratings agencies if the General Assembly chooses to default on the repayment. It sucks that the ratings agencies are ignoring the law that’s very clear that we don’t have to repay.

But with all that out of the way, let me tell you that it doesn’t matter how much it sucks. What matters is that it’s happened. Commentators and politicians can cry and moan about the unreasonableness of this all; about how the ratings agencies are being unnecessarily punitive, about how the bond yields took into account the chance of default, about how the investors will get all their money back through insurance, etc., etc. All of that is crying over spilt milk. Now it’s up to us to act like adults and clean it up.

In the complaints against repayment, you can see a lot of how people wish things were. Unfortunately, Rhode Island doesn’t exist in a land of make believe. It exists in the here and now. At the end of the day S&P, Moody’s, and Fitch (the big three credit ratings agencies) don’t play by the rules Rhode Island sets. These are the same agencies that were vital in enabling the existence of toxic assets that fueled the Great Recession and got away scott free. These are agencies that determine the borrowing ability of sovereign nations. Rhode Island, which lacks many of the tools sovereign nations have to blunt the damage from traumatic downgrades of our bonds, cannot go up against them and win.

Were we perhaps the state of New York, and could make life miserable for the ratings agencies, I would be more bullish about our chances of taking them on. If RI was the United States of America, which is impervious to ratings agencies at the moment, I would say go ahead and ignore them.

But we’re not. The very same people calling for us to default are the same people who go around decrying our flaws. They’re the ones ignoring that the ratings agencies can make or break us. It’s awful that we have to kowtow to the whims of these idiots, and the idiot investors who put money into the 38 Studios bonds. But these are the idiots that set the rules for Rhode Island, not the other way around.

To those of you looking to right this injury, I say “forget it, Rhode Island. It’s Wall Street.” The best we can do is bow to circumstance, lick our wounds, and ensure that this can never, ever, happen again.

Teacher group says no to NECAP as grad requirement


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necapThe Rhode Island Teachers Advisory Council has recommended to the Board of Education that it halt its high stakes test graduation requirement policy.

“Assessments, such as NECAP, should not be used as a graduation requirement because such assessments have not been proven valid and reliable for high stakes purposes such as promotion and graduation decisions,” the Council said in a new report. “Research has also shown that these tests may narrow curriculum, and limit future educational opportunities, particularly for poor and minority students as well as English Language Learners and students with disabilities.”

The report says the NECAP test should not be used as a graduation requirement, and that its replacement – the PARCC – not be used either.

Standardized tests are designed to inform decision-making at the district level. For example, the NECAP scores from a fourth grade class in Pawtucket show that 80% of the students are either partially proficient or substantially below proficient in mathematics. The administration should be able to use the results as a “red flag” to show the need for a change in mathematic instruction for the next school year; i.e. an additional mathematics specialist/coach for the teaching team, smaller mathematic class sizes, longer mathematic classes, a change in curriculum or additional mathematic classes. When the needs are addressed at the district level our students will have access to the proper interventions leading to academic success later on.

The group was created by the legislature last year to improve communications between public school teachers and the state Board of Education.

The NECAPS and high stakes testing have been a scorching political hot potato in Rhode Island for more than a year. Teachers have long been opposed and last year Tom Sgouros wrote a blistering critique of the NECAP tests ability to measure individual performance. The Providence Student Union gave voice to student concerns and their Take the Test action showed a wide swath of politically-engaged adults how difficult the test can be. The legislature is considering weighing in on high stakes testing this session.

Through it all the Board of Education has declined to address the issue, even being chided by a judge for deliberating a request by the ACLU to discuss the matter in public.

The Board meets tonight and is not expected to have a formal debate on NECAPs in particular or high stakes tests in general.

The candidates weigh in on women’s issues


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womens fund forumSix months before the general election, the six candidates for governor came together for the first time last week. And they did so to answer questions about gender equality. The Women’s Fund of Rhode Island hosted a forum Thursday to query the candidates on “so-called women’s issues,” as Gina Raimondo, the only female candidate, labelled them in her opening remarks.

Steve Ahlquist filmed the entire event and broke it down question-by-question, starting with each candidate’s opening remarks:

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Question 1: What can you do to address unequal pay in our state?

Ken Block said there is “no place for wage discrimination” and that there are already laws in place to deal with it. Clay Pell called it a question of fundamental justice and of economic growth and “I think we have to do a lot more than just enforce the laws that are on the books.” Allan Fung said there are more barriers in the public sector than the private sector to equal pay in pay equity and promotions. Todd Giroux spoke about more generic economic reforms that don’t speak directly to equal pay.

Several of the Democrats said raising the minimum wage will have positive impacts on pay equity.

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Question 2: Do you support policies, like family leave, that benefit working women?

The Republican candidates tacked to different directions on this question. Fung said, “I absolutely do support a lot of those policies that [provide] flexibility for people into the workforce.” Block said he allows for family leave at his business, but then railed against the temporary disability insurance program in Rhode Island, calling it among the most expensive in the nation.

The Democrats were more united. “I absolutely think we need to a better job pr providing more flexible work places,” said Raimondo. Taveras agreed and Pell went furthest saying overall Rhode Island has been moving in the wrong direction when it comes to making women more equal in the workplace. He cited state childcare assistance being been cut by 80 percent since 2007 as evidence.

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Question 3: What will you do as governor to proactively affect gender inequality?

Pell committed to appointing an equal mix of men and women to boards and commissions while Block said he would “strive” to have an equal mix in his administration. Raimondo, said there are no laws in Rhode Island to protect pregnant women in the workplace, said she’s the only candidate to have been pregnant in the workplace. Taveras said he knows it from a father’s perspective.

Todd Giroux said he has used the family leave act to take care of his father. He said as the “openly-gay candidate in the race, I am all about equality.”  Raimondo . Taveras said he understands some of the challenges from a father’s perspective. As governor he said he will consider “what is best for the working families.”

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Question 4: Reproductive justice. Will you veto bill that limits a women’s right to make their own health care decisions?

Pell, Raimondo and Taveras were clear on this question: each began their statements by saying yes, they would. Fung said he supports a women’s right to choose.

Block said, “The question of abortion is settled federal law. The Supreme Court has weighed in and I have no interest in challenging or changing that law here in the state.” Giroux, too, said he does not wish to weigh in on this issue as governor, but said he is opposed to abortion. He said a college girlfriend had an abortion without telling him. “In America today, you have a right to choose and your baby has a right to life.”

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Question 5: How will you ensure women can get out of poverty?

Pell called this the critical question of the election.  Raimondo said, “It’s time that we take a different approach to the way we deliver social services and we focus more on results. We re spending money but it often isn’t effective. My approach would be break down the silos, fund what works.” Taveras said he has a three-pronged approach: raising the minimum wage, ensuring affordable childcare and investing in “cradle to career” education.

Block, also talked about education, saying he is “dedicated to education reform.” He and Fung both said fostering private sector growth will help raise people out of poverty.

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Question 6: What are you plans to ensure recent college grads can find good jobs?

Instead of answering the question, Taveras and Block really get to the heart of the political difference between conservatives and progressives in Rhode Island.

Taveras said Rhode Island needs a climate that tells young people this is a place to be, this is a place to start a business and to live. But Block countered, “We won’t get the new jobs we need if it makes much more sense for businesses to set up in Massachusetts than it does in Rhode Island. It’s a brutal fact.”

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Question 7: Sexual assault on campus

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Question 8: How will you make expansion of women-owned businesses a reality?

Fung and Block spoke of focusing on the larger economy. Block said, “we need to increase the ease with which individuals can start businesses in this state, whether they are male or whether they are female.”

Raimondo said access to capital programs for women and minorities matter. “It’s time we face the reality that women have been left behind in the business world and address it.” Taveras said he wants to work with the Center for Women and Enterprise and the SBA to “open the doors and create opportunities.”

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…And their closing remarks: