It should come as no surprise to see former Governor Don Carcieri, the architect of the 38 Studios fiasco, yucking it up at the Republican Convention even though he has yet to answer questions about his role in state’s biggest economic blunder in a generation.
After all, Carcieri always represented conservatives first and then Rhode Islanders somewhere after that. We’re talking about a governor who gave more interviews to WPRO shock jocks than the rest of the local media combined!
But, like Scott MacKay of RIPR, we were surprised that Carcieri had the gall to be offering an economics lecture to President Obama. Here’s how MacKay put it:
Well, governor, what say you about a purported conservative Republican Rhode Island governor who gambled with the taxpayers money, made the most reckless crony capitalism economic development loan in the state’s history (38Studios, which is now bankrupt) and left the taxpayers hanging for $100 million in loan guarantees. Then this very same governor leaves office, goes into virtual hiding, refuses to answer to anybody to justify his actions and finally turns up in Tampa at the Republican National Convention to lecture the president on business.
The reality is many of Rhode Island’s economic sore spots are Carcieri’s fault. 38 Studios is only the most obvious example. Another is the state’s epidemic of failing cities. When Carcieri cut off state aid to the state’s poorest communities he virtually guaranteed at least some of them would have no other option than to go through an expensive reorganization.
As governor, he also focused his energies on cutting the state payroll instead of growing the state economy. And he fought really hard against obvious economic development winners like a casino and a port at Quonset.
One missed opportunity that few people recall is when Carcieri had the old Jamestown Bridge demolished instead of turning it into what would have been one of the most beautiful – and probably well-visited – bike paths in the world. Environmentalists and transportation advocates fought hard for the idea at the time, though the local media largely ignored the idea. Imagine how many additional people who visit and vacation in the Ocean State if they could ride their bikes from the South County beaches, through scenic Saunderstown over Narragansett Bay and right out to Beavertail and Fort Wetherill.
It’s well worth noting that Carcieri had a beach house in Saunderstown – it’s his legal address these days, though we get the feeling he spends more time at his place in Florida than in Rhode Island – and many of the uber-affluent residents on both sides of the bridge deplored the idea of sharing their slice of Rhode Island with the masses.
The best thing Carcieri probably did for Rhode Island is give us proof positive that business acumen doesn’t translate to political acumen.
And now here is campaigning for a businessman for president.
That should be all the evidence Rhode Island and the nation needs to know that Mitt Romney is the wrong guy to be president. After all, Carcieri has proven no more effective at picking winners in politics than he has in the video game business.
It was with some sadness that I read a sorta sneaky endorsement of Carcieri’s claim to political dignity in the latest P&J column in the Phoenix.
The Don was mentioned in the same sentence with Pell, Chafee, and Sundlin as a guy who took himself and his work in government seriously.
See for yourself. Wow.
Governor Carcieri had eight years to make his mark on this state. He could have changed the fabric of politics in RI by building his own party. Entrenchment typically leads to too much power in the hands of the few, followed by the inevitable corruption. Instead his legacy, his mark on the state, will be two blemishes.
The first was his endorsement of the current governor during the 2006 US Senate Primary, and his pandering to the National Republican big shots who showed up here for the race (Ken Mehlman of the NRSC and First Lady Laura Bush) to support Chafee. Chafee lost to Mr. Whitehouse in the general election and then left the Republican Party that had supported him at that time. The second is the $100M debacle with 38 Studios. Carcieri supported and endorsed this deal. Any kid who works on the family farm would tell you, “Don’t put all your eggs in one basket.” What was this man thinking?
This is precisely why RI is in last place.
“That should be all the evidence Rhode Island and the nation needs to know that Mitt Romney is the wrong guy to be president.”
Yeah, let’s hold up as example a former CEO governor that was the architect of the worse deal for the least business friendly state in the country as the reason not to vote a businessman into the White House. Cherry pick much? Would you really put Carcieri in the same class as Romney in business acumen?
As far as not answering for the 38 Studio debacle, unless he runs for public office again, I really don’t care what he has to say. He screwed up just like others on both sides of the aisle at our wonderful statehouse. What would expect him to say?
Cherry-picking? Au contraire, mon frere.
If anything, Romney is a double-down on the ‘government as business’ angle the GOP is running. Romney makes Carcieri look like Ben & Jerry!
Here’s how private equity (ie, Bain Capital) works:
1. Find a struggling company
2. If it has a core value, finance its gap at an outrageous rate, let it struggle to repay and sell at a juicy profit on top
3. If it doesn’t, do the same until you bust it out. (And spare me any stock Righty/Lefty BS; item 2 above describes my job.)
Romney never created anything. He bought and sold with money he inherited and other people’s money that his money attracted. This is not polemic; this is fact. (Staples being the single, true, VC play in Bain’s portfolio.)
These GOP “government as business” people straight up lie. They DON’T approach government as a business, unless in the purely predatory, worst-case, private equity way. Any player knows this from the way they talk about “debt”. They preach teh (not-sic) evils of debt, yet every business I’ve ever been part of has run up debt. Company debt to the private equity firm defines the essence of the relationship!
From a business (or household or national) perspective, debt itself is not the issue. The issue is what the debt is enabling. Is there ROI? Is is ’good money after bad’ or a smart investment. Care to speak to that? Seriously, please do.
But let’s leave business aside and get back to politics. The real issue here is not the R/L BS; it’s the economy (stupid). The pillars of ‘freshwater economics’ are crumbling beneath your feet. The discussions at Davos and just this week at Jackson Hole should terrify you. Marx is being proved more and more right every day. 1-percenters are turning on 1-percentism on a regular basis. Meg Freaking Whitman was on the Bloomberg yesterday talking about income inequality. Alice Rivlin tried to work with Paul Ryan on his budget before that broke down. (Neither wants to talk about why, but it’s pretty easy to guess…)
My cold, cynical side sometimes wants to see the US bite on the Romney/Ryan, Boehner/[insert GOP Senate pres. pro temp] deal. Go the whole hog, Joe the Plumber. What’ll that get you? (Answer: homelessness.)
Do we need massive turnover on Smith Street? Yes. Do we need state legislators that are in most cases vastly more competent than the incumbents? Yes. Do we need a strong leader, an outspoken advocate as Governor? Yes.
Do we need a ‘capitalist business mentality’ guiding our goverment at any level? Only if you can profit from ruination.
For clarity, Staples was much more of a mezzanine play (just like 38) and not a true venture capital play. VC takes a prototyped but non-commercial product to commercial status. Mezzanine finance takes a commercialized product ‘to scale’. Mezzanine finance exists between where VC leaves off and traditional bank loans pick up, hence the name.
For just a touch more clarity, private equity is the mafia of the legitimate economy. Hence the ‘bust out’ reference.
Welcome to my world…
How much debt is too much debt?
We are currently at $16 Trillion and heading up to $20 Trillion plus. And that does not include the future debt for MediCare/MedicAid or Social Security. When you add it all up ($200+ Trillion) we are in worse shape than Greece.
The only thing holding this economy up is our history, and that can only last so long.
The best word I can come up with for this situation is insanity.
What happens when a conservative Governor who is for small government and lower taxes gets taken at his word? He uses government in the form of the State Police to raid the Narragansett Tribal members and the folks who were on Tribal Lands in Charlestown buying tobacco products on a beautiful summer day in 2003. Instead of finding a non confrontational way to resolve this situation our Governor who was on vacation at the time ordered the infamous smoke shop raid which was executed by 50 armed State Police officers. One has to suppose that the Governor’s notion of who should and who should not pay taxes in RI was on display on that eventful day.
Jeebus, this makes me wanna puke. But…given this discussion, I have to put this on the table.
Carcieri did, perhaps in spite of himself, leave a legacy that only hardcore geeks appreciate: RI.gov. That is, a non-governmental, publicly traded entity (egov on the NASDAQ) the RI division of which is officially RI Interactive.
When you go to the DMV site to re-up your registration and the little app is teh awesome…that’s RI.gov. They really do tremendously fabulous work. I know some of the guys, and they’re not particularly political, nor is the company. It’s unique and worth checking out. It’s mission-constrained only to deliver front-end systems only for governments and to self-fund as a first choice. That is, cost to taxpayers = zero. (Users pay small fees for transactions.)
Lefty will be happy to know that their lead developer, Danny Chapman, is one of a dozen or so national fellows, working with the equally awesome IT group the Obama admin has going. And similarly, regardless of political alignment, geeks recognize that Obama’s IT approach is massively transformative, generating massive dollar savings and massive service improvements.
Okay, can I go back to being a partisan now?
Gee wiz, when was the last time we had a venture capitalist as president. We’ve had lawyers, peanut farmers, actors, and philanderers but I don’t recall a venture capitalist. So your gonna’ hold up Carcieri, who wasn’t a VC, as the reason why we shouldn’t? OK, I get it…
Yawn. Are you back-channeling with RTW or simply channeling RTW? Romney is not a VC, he’s in private equity. The link between the ex-gov and the GOP candidate is that the policies they believe in are total losers predicated on faulty assumptions about how things actually work. And, as I state at the outset, Romney is a double-down on the approach.
So to be perfectly clear, it’s not that he’s in private equity per se; it’s that the policies of a ‘business approach to governance’ are a disaster.