In a world where self-described “leaders” show their “leadership” largely by describing it in press releases, and politicians routinely praise their own bold choices, it is refreshing to see one who actually lives up to his own billing.
Anthony Gemma, on the other hand, has a jobs plan that is indeed as “innovative, strategic, and transparent” as he says. Unfortunately it’s also silly, misguided, and occasionally bizarre. (And hard to find. Go look on his home page and wait until you see “Enough is enough” and click on that.)
The centerpiece of his plan is to nurture the growth of the “wellness” industry in Rhode Island. This includes businesses who produce dietary supplements and organic foods, as well as “wellness jobs that include personal trainers, aerobics and pilates instructors, managers, researchers, Web site designers, wellness and fitness writers, and dietitians.”
Well all right, then. Maybe it sounds goofy, but could it work?
Sadly, probably not. Here’s a little economics lesson for you. What Rhode Island sorely needs is not goods and services to sell to other Rhode Islanders, but things to sell to the rest of the nation or the rest of the world. Do we currently suffer from a shortage of Pilates instructors? Are there aerobics classes that can’t run because no instructor can be hired? If we had more personal trainers could we sell them to people in Kentucky or India? These are services that are not in short supply, and are really no good for export, either.
Ok, how about the nutritional supplement part of the mix? This would presumably trade on our lack of strength in this sector. So far as I can tell, as far as nutrition companies go, Rhode Island is home only to Edesia Global Nutrition Solutions, an international effort aimed at distributing nutritional supplements to starving kids. Edesia is a very cool organization, and sells teddy bears to support its mission. Though I can imagine it could be the seed for a thriving food industry here, it’s not exactly what Gemma was talking about. (Read about them here.)
So in other words, Gemma is proposing to grow an industry where what we have can’t be exported and what can be exported, we don’t have. Leveraging assets we don’t have seems an interesting approach to economic development. So you have to award points for originality, in exactly the same way you’d praise the architect who envisions a fountain in the desert before anyone has dug the first well. Exactly like that.
Bettering that, Gemma proposes that we encourage the Mayo Clinic or Tufts Medical to open wellness clinics here. This, of course, would be the opposite of exporting goods. Instead of bringing money into the state, we’d be sending it away, to Minnesota or Massachusetts to provide services that we can get in-state. This, again, is why success in business means little or nothing about success in making policy to benefit a whole state.
Too late, too little
There’s a section in this plan talking about how higher education should be demand-driven and responsive to the needs of businesses and students. That’s a great idea. So great, it was pretty much incorporated into the “CCRI 21st Century Workforce Commission” report from a couple of years ago. (Gemma also suggests asking the state’s 7 biggest employers for $250,000 apiece to shore up education at CCRI. Which is a funny thought: we can’t raise taxes on businesses, but we can demand contributions from them?)
Along the same lines, there’s a four item list on page 9, that describes what the state should do to encourage the growth of the wellness industry. What’s funny about the list is that the first three items on it — tax credits, loans, assistance finding federal money — are all things the state already does. So yes, these are good ideas. So good that someone already implemented them.
And then there’s this:
“It is incumbent upon us to eliminate the over-regulation of the small businesses which are the engines that drive the Rhode Island economy. I will create a workgroup to review all federal and state regulations that hinder wellness and health-oriented businesses…” [p.8]
This, presumably, would join the Secretary of State’s workgroup, and the legislative commissions and the Governor’s initiatives of years past. Courtesy of the Secretary of State’s office, this work is under way, and it’s hard to find anyone to disagree with the claim.
Honestly, you don’t have to find disagreement to understand why these things — streamlining, increased efficiencies, and so on — often don’t get done. People who crave simple answers will blame unions and fear of change, but it’s pretty easy to find deeper reasons.
In my experience, you can walk around any town hall or state building and find people who agree that there are efficiencies available, but don’t have the resources to re-tool their department’s operations. “Doing more with less” year after year leaves little room for designing new procedures or implenting new systems. When you walk into a tax assessor’s office and find the assessor trying to finish reports that her staff used to prepare, you’ve found someone who can’t afford to research or entertain new possibilities about the conduct of her department’s business. For better and worse, that’s how we run things these days. Studies and commissions are all well and good, but change requires resources, even when the change makes things more efficient. You’ve got to put something in to get more out.
So that’s what I learned by reading the Gemma Jobs plan: he suggests concentrating on a new industry that has approximately zero potential to bring new money into the state, and offers a bunch of other suggestions that are already in place. What’s more, almost all of his plan consists of state policy suggestions, while the last time I checked, he is running for federal office.
There’s plenty more, but I’ve piled on enough. Ok, sorry, one thing more. I have to share my favorite part. It’s a tax incentive on page 9, for people who get hired in the wellness industry. Seriously. Gemma would offer a tax credit to new employees. Really? Does he imagine that unemployed people need a tax incentive to help them find jobs? That would be the sound of the fountain designer who has finally been persuaded to help dig a well and shows up to work with a butterfly net.
So sure. Gemma is a smart energetic guy who has done good things in the past, and doubtless will again in the future. I just don’t want a congressman with judgment like this. His jobs plan is certainly “innovative, strategic, and transparent” as he says. But is there no place for “practical,” “sensible,” or “realistic?”
I shudder at the thought of Gemma bringing his central planning to DC.
Hi Tom,
Basically, a big part of what you’re saying is that Gemma’s plan would increase Rhode Island’s trade deficit. Am I right in saying that? If so, that’s a pretty sophisticated critique, and it needs to be said.
You imply that we already have a current account deficit when you say, “What Rhode Island sorely needs is not goods and services to sell to other Rhode Islanders, but things to sell to the rest of the nation or the rest of the world.” I’ve long suspected this, but I can’t find any data to back this up, and I’ve looked pretty hard. Do you happen to know where to find these numbers?
My main problem with Gemma’s jobs plan is much simpler. It’s that his goal is to create only 10,000 over five years, which is actually monumentally terrible job growth.
–Sam
I’m saying that whatever our trade position is, the plan will push us toward deficit if we’re in surplus or make the deficit deeper if we’re in deficit. I’m not making a statement of where we are just now, more about what will improve conditions. I don’t know where to find state-level current account analyses, but I don’t think you need that in order to say that increasing exports will bring in more money, all else being equal.
And you’re right, all the economic parsing aside, I should have pointed out that the goal itself is a pretty low bar. I wouldn’t sneer at 10,000 new jobs, but I would be worried if that’s all we can get.