America’s Top States for Business 2016

Despite much wringing of hands and awarding of tax breaks to various upper income and business folks, we Rhode Islanders are told our business climate IS still at the bottom. Thus I propose these seven modest suggestions for addressing this problem.

1. Ban any pro-union advocacy opinions in the state’s media. While talk radio mostly does this already, some pro-union opinions occasionally do slip into the Providence Journal, RI Future, and maybe other local papers. I’m sure business will appreciate it if we close this loophole.

2. Cut pay of public workers by 50%. Though public workers have already made concessions on pay, health care and pensions, some of them can still afford to drive. Halving their pay would not only lower the tax burden, but make more room on the roads for the important people.

3. Stop enforcing clean water laws. Not only will this too lower the tax burden, but as public water supply gets more polluted, investors will see opportunities here to sell more bottled water and also to make money in the health care system treating the people who persist in drinking public water and thus get sick.

4. Stop funding bike, pedestrian and transit programs. This will make the state more attractive to oil and auto companies. Also, by discouraging physical activity, this will also increase obesity, making Rhode Islanders less fit and thus less able to challenge pro-business programs. Those who persist in biking or walking can perhaps be made subject to a gasoline-avoidance fee that can generate revenue to subsidize business jets. But as there are proposals in the US House of Representatives to do something like this on a national level, we better do this quickly before we lose a competitive advantage over other states.

5. Sell all public beaches. Not only will this provide more shoreline for the rich to buy, but their view of the shore from their yachts will be improved if the hordes of riffraff on the public beaches are forced off.

6. End the sales tax on high-end cars. Though we already eliminated sales taxes on boats and private airplanes, the rich still have to pay sales taxes on BMWs, Cadillacs, Lexuses etc. It is not fair that their cars are not treated tax-wise the same way as their yachts and planes.

7. Require all low income folks to be servants to the business class for 3 days a year. After all, we know how hard it is to find good servants these days. The low income folks serving the rich could polish their cars or silver, cut the grass, mop the floors and such. Giving up only 3 days would not be too much of a burden, but think how much it could improve our business climate rankings as no other state does this. Indeed we can market this initiative by emphasizing the “Plantations” part of our official state name that we voted to keep. not that long ago.

Will these suggestions be seriously considered? Maybe.

From the headlines, you would think that CNBC is the gold standard economic authority. After the cable news network released its 10th annual “America’s Top States for Business 2016” listing, in which Rhode Island was ranked dead last, local corporate media raced to bring the bad news to readers and viewers. CNBC ranks R.I. worst state for business, CNBC: Rhode Island ranked ‘Bottom State for Business‘, and RI back to dead last in new CNBC rankings are typical examples from the Projo, Channel 10 and Channel 12 respectively.

Missing from the Cassandra-like coverage is any hint that the rankings are meaningless and based on metrics that rate our state on how well our policies kowtow to the whims of business, not on how well they benefit the poor and middle class. Only Ted Nesi even approaches this angle in his coverage, but he did so through the lens of competing political discourse. But what about the economics of the report? Does it hold up under scrutiny? I’ve tackled the subject of economic rankings before, here and here, trying to bring some sort of real economic analysis to bear.

I asked Doctor of Economics Douglas Hall, Director of Economic and Fiscal Policy at the Economic Progress Institute, for some insights. Hall said that many of CNBC’s economic indicators “have a lot of merit and point to the need to address matters via public policy, such as repairing the state’s crumbling infrastructure and the need to help Rhode Islanders improve their educational attainment. But when you deconstruct their aggregate groupings,” said Hall, “many of the categories are deeply flawed and point to policies that would severely undermine the well-being and quality of life of working families in Rhode Island.”

One indicator the report uses is “union membership and the states’ right to work laws.” Low union membership and strong anti-union right to work laws contribute to a higher economic ranking for a state in CNBC’s report, yet Hall says that “research clearly shows that as unionization rates have gone down, the well-being of the American middle class has gone down.” In Hall’s view, this metric “taints the entire aggregate measure.”

Another metric, the CNBC aggregate category for the cost of doing business, considers the cost of paying wages and presumably, says Hall, “a state in which every employee worked for sub-poverty wages would get a very high grade in this category, while those paying living wages that can sustain a family and support a viable business community through demand for goods and services, would get a low grade in this category.”

It seems clear that these rankings of states by various business interests, including corporate entities such as CNBC, puppet organizations such as ALEC and members of the State Policy Network (which includes the RI Center for Freedom and Prosperity) and various Chambers of Commerce are are not objective measures of a state’s economic well-being, but are tools crafted to shape public policy to the advantage of large business interests and to the detriment of the poor and middle class.

The most sensible tactic in dealing with such garbage is to file it accordingly.

Tag: America’s Top States for Business 2016

Some modest proposals to boost RI’s business climate

CNBC’s state rankings flawed and anti-middle class