Opinion by CEO Stenhouse: The old approach won’t restart R.I.

As printed in the Providence Journal Op Ed section, 11/15/2012

On Nov. 10, a single page of The Journal featured two articles that tell us all we need to know about Rhode Island’s misguided approach to economic development and our dismal economy. While Rhode Islanders struggle to control their families’ financial security, our state looks to seize control, period.

The first article (“State seeks growth ideas, data analysis”) reports that Governor Chafee will use tax dollars to pay private firms for ideas, due in about 90 days, on how to focus resources in specific areas that can be coordinated across multiple state agencies.

Every part of this approach is precisely opposite of what we should be doing.

Rhode Island has a bad economy because we have one of America’s worst climates for business; and we have a poor business climate because we have too many punishing taxes and regulations enacted by our own government.

As the governor sees it, the same government that created this bad business environment now wants to be entrusted to come up with a plan to fix it — coordinated across multiple agencies.

But a redesigned Rhode Island Economic Development Corporation would not create private-sector jobs. Government is hardly the entity those in the business community would trust.

After the 38 Studios debacle, haven’t we learned that government should not be deciding which businesses or industries should receive special treatment?

When I hear “invest in specific areas,” I can only wonder what politically connected special interests will benefit. A strong business climate, one that reduces taxes and regulations for all, would benefit the entire business sector, not just a chosen few segments.

Our state wants to use federal funds to pay for good ideas about what’s wrong with our state and what to do about it. How typical: spend more taxpayer money on more government bureaucracy to waste more time, and maybe reaching conclusions we already know.

Government begets more government, and the beat goes on.

My group, the Rhode Island Center for Freedom & Prosperity, has researched and documented the major problems in the state, and we have recommended solutions that are working successfully in other states.

And we do this for free. We never accept taxpayer money. We just ask the political class to listen!

There is no need to wait 90 days. Should people who are struggling have to wait three more months for the state to begin to get a clue?

In this same Journal article, Governor Chafee was quoted as saying that we must take steps to improve the state’s economic climate. But in the second article (“R.I. could see $50-million surplus”) about what to do with a potential budget windfall, the governor contradicted his quote from the first article.

Instead of using the $50 million surplus to improve the business climate (by reducing taxes, maybe?), the governor intends to spend forward these windfall funds on next year’s budget deficit, which does nothing to improve the state’s economic climate.

Balancing a failed budget would not help grow our economy. But this is how bureaucrats think. Economic growth should be the goal, with the budget being adjusted accordingly. Any wonder why Governor Chafee recently received a “D” for his poor fiscal policy from the Cato Institute?

What both articles clearly demonstrate is that Ocean State residents can expect a government-centric, bureaucratic, budget-oriented approach toward economic development. The government approach that got us into this mess is now being promoted by our state leaders to get us out of it. The political class just doesn’t get it.

What Rhode Island needs to do is to unleash individuals and businesses by tearing down the legislative barriers that inhibit success. Let the free-enterprise system — the same system that President Obama called the greatest engine of prosperity the world has ever known — work on its own and thrive.

Unfortunately, those who defend the status quo do not want to hear it. They do not want a less-expansive government. That might lose them votes. And they will do almost anything to avoid dealing with the real public-policy issues that are at the core of our state’s problems.

The politicians provide lip service to make it look like they’re trying to do something. And they hope that we’ll all buy it.

I don’t buy it. Do you?

Mike Stenhouse is chief executive of the Rhode Island Center for Freedom & Prosperity, a conservative think tank.

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