Renn, writing in City Journal, calls RI ‘the nation’s basket case’

City Journal Spring 2014 RIAaron Renn, the one-time Rhode Island resident and author of the Urbanophile blog, is out with a big new piece about Rhode Island’s intractable economic problems in City Journal, an urban affairs quarterly published by The Manhattan Institute, a right-leaning think tank. The article is called “The Bluest State,” and it’s a bracing read.

Here’s a sample:

Blue-state defenders say that progressive policies work. After all, liberal-leaning states boast some of the nation’s wealthiest and best-educated populations. But many are also reeling from problems ranging from high costs of living and widening income inequality to chronic fiscal crises. And leading blue states such as California, Massachusetts, and New York possess unique assets — respectively, favorable climate, educational hubs, fortress industries — that shelter them, at least for a time, from the full economic consequences of their public policies. What happens when you go blue in a more average, workaday place? Rhode Island — a blue state in its purest form — provides an answer. …

[E]ven as Rhode Island’s industrial base steadily eroded, the state’s political leaders didn’t seem to understand that they no longer had any marketplace leverage. This myopia continues to the present day. The state’s leaders act as if they’re selling a unique luxury product — à la Michael Bloomberg’s notorious quip about New York City — when they’re selling a commodity, at best. They feel justified in adopting the same arrangements as Massachusetts and Connecticut without the compensating economic advantages that would help pay for such policies, at least for a while. As [Robert] Atkinson put it: “For a long time, Rhode Island could essentially afford to be inefficient and quasi-corrupt … because things just sort of needed to be there. That was gone a long time ago.” Someone forgot to tell the state’s political leaders.

The article is worth reading in full even if you’re inclined to disagree with Renn, both to see the sheer number of outlier policies Rhode Island has enacted and to get a sense of one smart observer’s critique. One part of his thesis that’s sure to be debated is whether it’s accurate to say that Rhode Island’s overall policy thrust is liberal; as RIPR’s Ian Donnis quickly pointed out, the state has had primarily Republican governors since the 1980s, and its Democratic legislative leaders are often criticized by progressives.

Renn’s article also isn’t just about left/right divides. The question of whether Rhode Island gets value for money in its government spending, for instance, should concern Democrats as much if not more than Republicans. The imbalance in the state’s unemployment program raises serious questions about fairness. The state’s pension burden looks set to take resources from other priorities for decades. And the high cost of housing here acts like an indirect tax on the middle and working classes.

For more from Renn – who addressed Rhode Island House lawmakers to provide economic advice earlier this year – check out his 2013 interview on Executive Suite.

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