Rhode Island’s foundering economic is again the top Statehouse topic. Political analyst Scott MacKay has some thoughts as we at Rhode Island Public Radio kickoff our series on our state’s slow recession recovery.
If Rhode Island was a lake, we’d all be drowning under the weight of decades of reports and high falutin expert commissions charged with dissecting our state’s economic doldrums. Wonks, business leaders, academics and consultants have produced turgid chronicles – with scant results – on how to heal the sickest economy in New England.
It wasn’t always this way. At the turn of the 20th Century, Providence was the most prosperous of American cities and Rhode Island was the Silicon Valley of the era. The Ocean State’s factories thrummed with activity, churning our textiles, jewelry, heavy machinery, machine tools and steam engines.
Rhode Island is a watery sliver of New England, a place with few natural resources save fish. So the Yankee tinkerers and inventors forged an economy grounded on making things for people around the nation, and indeed, the globe.
Slowly, but steadily, the bottom fell out, as manufacturers left for places with cheaper labor and lower energy costs. Textiles moved to the American South and then the Third World, followed by the jewelry industry. Arguably, the last fine time for Rhode Island industry was during World War II and just after, when defense industries, U.S. Navy installations and manufacturing was still the sturdy spine of the economy.
But beneath that veneer, Rhode Island’s economy was imploding. In the 1950s, every week brought news of another textile mill shuttering or moving south. Things got so bad that state government hatched a plan to allow an Oklahoma company to build a huge oil refinery on the northern tip of Jamestown. That deal went down when wealthy Newport summer residents challenged it in federal court. Years later, when Gov. Dennis Roberts was asked why he supported such a polluting industry, he said the state was desperate for jobs.
By the 1980s, things got so bad that the state considered an industrial policy, called the Greenhouse Compact that proposed pumping millions of venture capital into the Rhode Island economy to create jobs. But moves by the Smith Hill crowd to turn it into a patronage swamp doomed the plan. Voters resoundingly defeated it in a statewide referendum.
For years, lawmakers have groped for solutions. Too often these have been foolish, magic-bullet o ``game-changer’’ plans that failed, like the Alpha Beta bio tech fiasco under Gov. Bruce Sundlun in the 1990s or 38 Studios under Gov. Don Carcieri. Both those companies went broke, leaving taxpayers holding the bag.
What Rhode Island lacks is anchor industries in a 21st Century economy fueled by highly-educated workers in such fields as technology, medical research and biotechnology. ``What is different here from the states surrounding us is the lack of large, technically sophisticated growing companies,’’ says Professor Rick McIntyre, chairman of the University of Rhode Island’s economic department.
McIntyre also faults the all-too-typical Statehouse response to attracting business, cutting business taxes and ``hoping something will happen. It’s been tried many times and it has failed.’’
The byproducts of such tax policies have been less state revenue to push policies everyone knows will lead to a better economy, such as investing in education and infrastructure and developing innovative programs that nurture young entrepreneurs.
Everyone from Gov. Gina Raimondo down to newly-minted lawmakers point to Boston and such technology-rich places as Kendall Square in Cambridge. Well, Kendall Square didn’t flourish overnight; it was a rundown neighborhood a generation ago.
Boston business leader Jack Connors says only half in jest that the crucial element there is ``putting the two of the best universities in the world next to each other and waiting 200 years.’’ (Note: there is no minor league baseball stadium Kendall Square).
In our series called Rising Tide, Rhode Island Public Radio will take you to businesses and neighborhoods across the Ocean State to assess how we are emerging from the deep recession and who is still left behind.
We’ll take to you to Westerly to meet a woman who got training for a new career in a medical field, but still hasn’t landed a job. We will tell the story of a Providence couple who started a small business and bought a house just as the recession came and a home health provider who teamed up with the competition to endure tough times. And you will hear from shop owners and restaurateurs on Dexter Street in Central Falls, the state’s poorest city.
Our series will also cover a Bristol manufacturer who figured out a unique schedule for his workers to weather the down times and a college job fair at the University of Rhode Island.
Tune in this week or follow our series at RIPR.org to see how your neighbors are coping with the toughest economy in New England.
Scott MacKay’s commentary can be heard every Monday on Morning Edition at 6:45 and 8:45 and at 5:44 on All Things Considered. You can also follow his political reporting and analysis at our `On Politics’ blog at RIPR.org