CommerceRI innovates towards inequality, unaffordable healthcare and ecological collapse

Commerce RI innovates towards inequality, unaffordable healthcare,  and ecological collapse.

A report from ProsperityForRI.com   Greg Gerritt Director of Research   March 2022

Executive summary

The Rhode Island Commerce Corporation (aka CommerceRI) has a long and sordid history.  Its latest report, “Rhode Island Innovates 2.0” is a jargon filled offering based on the neoliberal philosophy of low taxes and little regulation will increase the growth rate, despite every serious study of the topic proving that this is untrue.  CommerceRI offers up bad tax advice, but focuses on industry clusters that it thinks represent the future, but are a dead end offering expensive and inaccessible healthcare, a bigger war machine, the financialization of everything, more gentrification and displacement, and a worsening climate catastrophe.  This report points out CommerceRI’s errors and offers a more productive path to prosperity for Rhode Island based on solving our real problems, reduced inequality, better public health and a focus on the climate catastrophe that we are all facing. 

Foreword

A friend recently pointed me in the direction of “Rhode Island Innovates 2.0 “ a report from the Rhode Island Commerce Corporation (CommerceRI) that came out in 2021 based upon activities and data through 2019.  While slightly late to the game, I believe this analysis is still relevant as the underlying philosophy of CommerceRI has not changed, nor its blindness to the larger implications of it’s actions.  

Every country and every state needs and has an industrial policy.  Even if they deny they have one, they implicitly do.  The problems related to industrial policies tend to be in what philosophy underlies the policy and how it is implemented.  It is my contention that in the 21st century the State of Rhode Island should have an industrial policy that focuses on solving the problems faced by Rhode Island, not an industrial policy that makes the rich richer and chases the hot commodity of the day. The industrial policy of Rhode Island should put solving the climate catastrophe at the heart of everything we do to improve the economy.  This would be in keeping with the mandate given the government of Rhode Island in the Act On Climate Legislation that passed in 2021.  This means that CommerceRI should be looking at innovations and innovators well beyond wind turbines including how to recycle houses facing rising seas, how to build affordable housing that is zero carbon, decarbonizing all industrial sectors, and removing from the economy all embedded carbon.  It would also mean using the power of the state to address other issues that intersect with the economy such as reducing inequality, ending gentrification and sprawl, making healthcare less expensive, managing our stormwater better, and improving the health of our water, forests, and biodiversity.  Unfortunately CommerceRI seems stuck in an old model and offers Rhode island an industrial policy that will make most of our problems worse.  

I have been watching CommerceRI, the state economic development agency of Rhode Island, going back to its predecessor the RI Economic Development Corporation for about 25 years.  My first experience was as a stakeholder in the 18 months of discussion as to whether or not Rhode Island should build a container port at Quonset. Almost all of the political leadership in Rhode Island, the Governor and the legislature, The Chamber of Commerce, the construction unions, and a whole bunch of other folks all bought into this “visionary plan” that the RIEDC was supporting whole heartedly, to build a giant container port at Quonset that was presented by a couple of con men who had been run out of ports around the world and really did not have any of the contacts and contracts that they said they did.  Watching the leadership of the EDC bend over backwards to accommodate these conmen and run a truly pathetic public hearing process with an unwillingness to listen to the public was disgusting.  Eventually everyone figured out the “port developers” were conmen and the whole thing just sunk beneath the waves, but the wreckage is still there.  I can still see John Swenn, head honcho at EDC trying to mimic the swagger and mannerisms of the developers at a presentation, and remember the end of his public career when he was caught with his hand in the cookie jar of the public’s money.  I may be the only person in RI who still thinks about it and who uses Quonset as a jumping off point to critique economic development gamesmanship in Rhode Island.  But it is still holds important lessons for us.

Resistance was especially strong in the neighborhoods near Quonset and among the people concerned about the health of the bay, but what I found was the most compelling argument against the project (after seeing a slide show highlighting all of the stuff that would flow to RI from Eastern and Southern Asia) was how turning Rhode Island into a sluiceway for goods created through genocide, environmental destruction, and low wages in Asia was going to hurt Rhode Island’s economy.  The RIEDC absolutely rejected that argument specifically stating that what came through the port was irrelevant.  They were of course wrong, but were merely parroting what neoliberal economists have traditionally stated.  The neoliberal game plan is low taxes and little regulation, plus pretending that give aways to the rich gives you faster economic growth and nothing else matters.  Neoliberal economists resort to elegant mathematical models to prove that making the rich richer is the only way to go, but are completely unmoored from reality, as study after study has shown that in the real world neoliberal models and prescriptions for economies are not only useless, but actually create real harm to communities, and do not increase the growth rate.  And now the economics profession is starting to push back against neoliberal models by focusing on real world results. 

 We may have averted disaster at Quonset, but a few years later the next Governor and his neoliberals running the RIEDC decided that they (the taxpayers of RI in reality)  should put $75 million into a video game company that was owned by former Red Sox star, and current racist buffoon, Curt Schilling despite the fact that it had one only marginally good product and no real plan or path to profitability.  When the 38 Studios deal was announced the public rebelled strongly, demanding a full public discussion. The public was ignored.  Disaster struck when 38 Studios ran out of money (nothing to sell), and the good folks of RI had to shell out a fortune. The brand and reputation of the RI Economic Development Corporation was in such disrepute that the state changed the name to the RI Commerce Corporation  but in reality it is still run by the same sort of ideologues that have always run it and continues to be a bastion of neoliberal claptrap that continues to push a failed model of development that still is not backed up by actual data. 

One other thing I learned in these fights was that there are certain law firms in RI that have totally bought into the neoliberal model of development and go out of their way to represent interests that are doing real harm to RI, both corporate and state affiliated, and that when you hear that those law forms are working on a project the public should beware and get ready for a fight to stop the harm.  It is no accident that the same law firm advised the RIEDC on Quonset, had to pay back millions for its work on 38 Studios, represented the developers in the failed attempt to build a gas fired power plant in Burrillville, and is still considered one of the most wired law firms in the state.   

Innovation? Or just more give aways to the rich?

The report I want to discuss in this essay is called “Rhode Island Innovates 2.0”.  As the name implies it is a jargon filled report based on the work by some overpaid and underthinking consultants (you do have to wonder why the State of RI is so in love with hiring consultants who then fail to deliver anything useful)  who wanted to sound up to date and were willing to lie and contradict themselves from one page to the next in the hope that no one would notice and that everyone would therefore buy into their plan to give lots of money to rich folks and support industries that promote killing, bad health outcomes, gentrification, and greater inequality.

The neoliberal model of low taxes on the rich, very limited public services, and no regulation of business is clearly a top down model of economic development designed to both increase the wealth of the rich as well as their political power. The founders of neoliberalism were quite explicitly anti democracy (and racist) as they were aware that an educated public would never go along with the amount of stealing by the rich that neoliberalism fosters, and therefore encouraged the rich to use their money specifically to buy legislatures and judgeships in order to facilitate their take over.  Sheldon Whitehouse is constantly railing against dark money, captured regulatory agencies and packed courts, and for this I thank him. But his record on neoliberal policies is less than stellar. To be very clear, all of the statistically valid studies of the effect of the business climate find no evidence that business climates correlate with growth rates, and a study funded by of the State of Kansas found that business climates at most influence growth rates in about 5% of a state’s economy, meaning that no one could tell the difference with the naked eye.  In Rhode Island it means at most the difference between a 2.2% growth rate and a 2.3% rate, while undercutting the state budget and public services, and fostering inequality  

The economic development practices used by Rhode Island government agencies at all levels, and pretty much everywhere else, are structured to bring about an increase in the wealth of the wealthy instead of promoting the general welfare.  The class difference in power shows up especially when discussing policies that can affect how much taxcorporations pay, despite state and local taxes being a very small percentage of their gross. A strong pull on what policies to promote is communications and money wielded by the minions of the richest.  The Chamber of Commerce, the corporate media and well-funded(Koch Brothers) neoliberal think tanks control the discussion of what is acceptable, and have been critical in pushing the message of low taxes and little regulation for quite a while.  They are especially adept at pushing a false narrative about the relationship between taxes and regulation and the development of the economy, despite no data supporting the assertion, and many studies outright refuting it. The mantra of low taxes, little regulation, and low wages for the working class is good for us has become the received wisdom for politicians of both parties.  The data is very clear that serious regulation of pollution has saved more money, and generated more innovation and profits, than letting businesses pollute. States that tried to go all out for low taxes destroyed both public services and their economies.  Raising minimum wage is actually good for the economy as it helps recirculate a higher percentage of the community income and increases the number of people spending money. Efforts to increase the percentage of highly paid people in the community have resulted in gentrification, the inability of most people to afford good housing, and increases in homelessness.  And yet economic development agencies such as CommerceRI repackage the same old same old in new jargon, despite the fact that transformation of our economy along new paths; equity, justice, the environment, and climate justice is probably the only path to prosperity that a place like Rhode Island will have.  

Innovates 2.0 does contain many things that will be useful.  Job training is a good thing.  There are industries that deserve public support at various stages because they help move forward things that actually benefit the public.   There is an acknowledgement by CommerceRI that they need to step up their game in respect to supporting Black, Indigenous, and People of Color in the economy and CommerceRI has some reasonable programs, though we have to wonder what took them so long, or rather we have a very good idea why they are having to play catch up, and we are very aware of how damaging to communities the neglect has been.  I will not spend much time on what I agree with, but will discuss what is wrong with the approach offered, occasionally with a bit of snark.

I know I should footnote this entire paper, but it makes it more difficult to read, so I am just going to offer up a short bibliography of on line papers that do include all the footnotes and references so that you can check all of the “controversial” things I say, and when I point out that there is data to back up my statements.  What follows, in addition to further commentary on the underlying philosophy, premises, and policies of neoliberalism is some discussion of the clusters of industries that CommerceRI feels are critical for the development of the RI economy, a few comments on other parts of the paper, and some discussion of what would be a better approach to economic development in Rhode Island.

Jargon and economic cancers   

If you like jargon, “Rhode Island Innovates 2.0” is for you. It is a document devoted to jargon .  Its real goal is to get money and resources, the people’s money and resources, into private hands specifically in a few fields that they consider to be future sources of innovation.  The only relevant context seems to be what people who will make money from the investments touted think, and the larger context of how actions reverberate in the community and how they may or may not reflect historical trends of oppression and injustice are ignored.  

The ecological context of a planet rapidly passing a number of planetary boundaries that should not be crossed if we are to remain healthy is ignored (though with lip service to the climate catastrophe) as rapid economic growth is the only thing that counts.  Compound growth forever in biological systems are usually considered to be cancerous as the growth extracts resources that are needed for life elsewhere.  Unfortunately this is beyond the comprehension of the leadership of CommerceRI. The only things they want to offer most Rhode Islanders are jobs with corporate criminals, the undemocratic takeover of the education system so as to better create automatons and some job training. CommerceRI thinks gentrification is just fine, and the main goal is to offering inducements to rich folks from Boston and elsewhere to set up shop here, thereby driving gentrification.  

The paper primarily focuses on economic clusters and areas of interest. 

Here is the list of industries that CommerceRI thinks are going to be a big thing for  Rhode island.  

Clusters  :  Biomedical Innovation; IT/Software, Cyber-Physical Systems, and Data Analytics; Defense Shipbuilding and Maritime; Advanced Business Services; and Design, Food, and Custom Manufacturing. 

Two “opportunity areas”—Transportation, Distribution, and Logistics as well as Arts, Education, Hospitality, and Tourism

The idea is that these industry clusters are ones that can used to create high paying knowledge jobs and are therefore where CommerceRI should focus and that the opportunity areas provide support for these industries. The fact that the clusters make up less than 10% of the RI workforce and over the study period created less than 7% of the new jobs tells CommerceRI to redouble its efforts on these  areas, while it tells me that our tax dollars would be much better spent on the 90% of the economy that is creating 93% of the jobs and is creating jobs that are accessible to the people who already live in Rhode island, and especially in the communities that are currently the poorest, and are not going to be getting the jobs that CommerceRI is focused on.   What is a state agency for?  To further inequality or to create the greatest good?  My feeling is that CommerceRI should be focused on what helps the people of RI the most, not what helps the few make more money faster. 

 The other focus is on how to better support the trade associations and training programs associated with these clusters and provide them with more state resources (note that from here on I quote Innovates 2.0 fairly often.  I will put “quotation marks” before and after all quotes from 2.0)

“There is more strategic focus within advanced industry clusters. Due to targeted state

support, the intermediaries for industry clusters—RI Bio, DESIGNxRI, the Rhode Island

Textile Innovation Network, the Composites Alliance of Rhode Island, Polaris MEP,

New England Medical Innovation Center,

the Southeastern New England Defense

Industry Alliance, the Rhode Island Marine

Trades Association, Social Enterprise

Greenhouse—are increasingly capable and

mature.”

This is a very interesting strategy. The state funds collaborative efforts as a way of funneling even more resources to the rich.  I am sure that some good work comes out of these trade associations and networks and I am familiar with the Social Enterprise Greenhouse and support its efforts to help non traditional entrepreneurs who come into entrepreneurship with fewer resources, but most of these trade associations are funded by very large and powerful businesses and do not need our support, but get it mostly due to their lobbying and political connections.  Clearly CommerceRI is just playing politics with the big boys and ignoring the rest of us.  That is not an industrial policy worth having. 

Clusters over and over again

The Economic Policy Council was an agency /quasi governmental corporation in Rhode Island that published a report in 1997 right after I moved to Rhode Island.  I read it and my critique was the second of many essays I have written critiquing the economic development game in the USA, the first was my critique of the Maine Economic Growth Council 1996 report just before I moved to RI.  If you took what was in those two reports, you would find that they were nearly identical to Innovates 2.0 except that 2.0 has updated the clusters, without really understanding why they are still touting the same old same old, and the jargon has changed because no one was buying it anyways, so might as well try new buzzwords.  But 25 years down the road the neoliberal establishment is still trying to tell us the path to the future is the same industries that have not paved much of a path for prosperity except for the favored few in the last 25 years.  The answer CommerceRI would offer is that if we did not do that, we would be further behind than we already are.   The answer to that is the economic development agencies still have the wrong industries in theirsights because they refuse understand the conditions on planet Earth and in our communities.

Let us look at the Clusters being touted.  IT, Advanced business services, cyber physical and Data analytics are just business as usual disappearing jobs for people who cannot go to school until their mid 20’s or beyond.  They just replace people with computers, smart machines and algorithms.  One might think of them as generally harmless, and for the most part they are, but not completely.

“Highlighted sub-clusters within Advanced Business Services are Real Estate

Credit, Investment Management, and Insurance. Real Estate Credit and Investment

Management are specialized, with respective LQ’s of 1.85 and 1.21, and experienced

high employment growth rates in the top half of peers (32% and 43%). Key players

in Real Estate Credit in Rhode Island include: CBRE, MG Commercial, and Hayes &

Sherry/Cushman & Wakefield. Investment management related activities is a sizable

and specialized industry experiencing significant growth in employment. Fidelity

Investments is a large player within investment management in Rhode Island, employing

over three thousand people throughout the state.”

It is important to remember the obsession with the growth of IT, cyber data, finances, financial technology, advanced services and real estate is just what crashed the economy in 2008, and is likely to lead us there again.  Especially as real estate loans are the thing that holds up the American economy through the massive amounts of debt they create, and these industries also a huge source of the inequality and injustice in the American system, exacerbated by the algorithms that in hidden systematic ways discriminate against people of color, denying them wealth building opportunities (the new form of redlining) so the promotion of these industries by the State of Rhode Island and its agencies should at least give us pause.  

“A challenge for the cluster in Rhode Island is a significant undersupply of office space

both within and outside of Providence. Limited transparency in the commercial real

estate pipeline limits the attractiveness for private developers and financers”

Excuse me, but to think that we should worry about a shortage of offices for the industriesthat crashed the economy, and the industry that is responsible for creating spaces for business?  Are they nuts?  Blame the industry, for being big screw ups not the rest of us, and do not give them state resources.  Lots of businesses closed offices during the pandemic, there should be no undersupply now.     And if they have a plan for profitability, they can build their own space.       

Investing

“Rhode Island should create an InvestRI Initiative to match the investments of large

institutional and individual holders and generators of wealth—pension funds, university

endowments, estates, and family offices—with projects that are investor ready and meet

return expectations.”

This one is really bogus.  The corporate world is awash in cash and does not invest it because the expected returns are unrealistic.  In other words the expectation of profits is more than the planet can give and juicing that process means more inequality and more destruction of ecosystems. This is one of the key things in our race to the bottom.  Businesses are not investing in production, they are investing in financial shenanigans and real estate.  They are sending money offshore.  They are using tax shelters to hide over abundant profits and they are not investing in actual production because it does not pay.  The economy on the planet is sort of stuck.  There is too much stuff (hence the desire to build more throw away stuff to juice consumption) so it makes little sense to keep building more.  What would benefit us more is higher taxes on businesses that do not invest in business, and turning that into public goods, like clean water, better transit, climate adaptation and housing for people shut out of private markets.  CommerceRI has it backwards.  

Food Design and Custom Manufacturing

I am sort of neutral on the Design, Food, and Custom Manufacturing Cluster.  As for design, it depends upon what you are designing.  No one needs fast fashion except sweatshop owners.  But city planning, green infrastructure and many other products are useful.  The food industry being touted is mostly high end foods rather than basics.  Rhode Island is likely to run into serious problems as global agriculture fails due to the climate catastrophe, but when CommerceRI writes about food, it is designer pickles.  Custom manufacturing seems to be the machine shops of the  21st century.  Necessary no matter what you produce.  

“Rhode Island continues to house an innovative food ecosystem with a high level

of entrepreneurship. Since 2010, Rhode Island has experienced strong growth in

small-scale agriculture, and one-third of graduates from Johnson & Wales start new

businesses. The incubator Hope & Main also contributes to the startup ecosystem,

having helped 200 entrepreneurs launch local sustainable food companies over the past

four years.

The end-to-end food value chain in Rhode Island is highly localized, which

representatives from the food cluster say leads to strong, stable, and intimate

relationships between firms. 11% of agricultural products are marketed to consumers—a

likely testament to local product recognition among consumers—compared to less than

1% nationwide. The proximity of producer to consumer aligns with culinary trends that

value natural and locally sourced ingredients.”

How much of the food industry is actually sustainable?  All that CommerceRI is talking about is specialized high end consumer oriented. RI needs a focus on food security and locally grown local basic foods, which is not a focus for CommerceRI.  I think we should especially note that 11% of RI agricultural products is sold directly to consumers compared to 1% nationwide.  All this says is that RI produces way too little food.  But I see no evidence CommerceRI is helping new young farmers get into farming. Just help for specialty niche foods.  

The Very Problematic Clusters

Health Care

I have written extensively over the years of the problems with the medical industrial complex and how it is a system that delivers very expensive and lousy healthcare (most expensive healthcare system in the world by a wide margin, 37th in delivery among industrial nations) to most people while funneling resources out of communities and into the Biomedical industry. The Medical Industrial Complex as currently constituted and funded contributes to the destruction of public health systems and leads to shorter life expectancies, while making it harder for people to access health care.   A new paper  “ Health Innovation Policy for the People” by Dr Shobita Parthasarathy should be required reading for anyone touting this sector.  Dr. Parthasarathy points out exactly how this industry operates and how it contributes to poorer health and growing inequality.    Yes, it makes some entrepreneurs very wealthy and provides a fair number of good jobs. But it does have some very negative effects on our communities, and without a realistic discussion about the negative implications of the business model CommerceRI is so enamored of, and what would work better for the people of Rhode Island we will led astray. I am sure CommerceRI was not happy with AG Neronha’s decision to block the merger of Lifespan and Care New England, because they support that kind of mega research power despite how it could further the inaccessibility of healthcare.   

The efforts of CommerceRI are also directed towards getting people in the medical industrial complex to move to Rhode Island.  In a place with a critical housing shortage, how responsible is it to encourage well paid people to move here without adequate provision for housing for all the people they will displace?  On other words if work force housing and  reducing the cost and increasing access to health care for low income workers is not the heart of the biomedical industry cluster planning, then it is harmful.  Another thing that is damaging about our obsession with the patent based innovation medical industrial complex is that it can be and is used as a wedge to destroy public health systems.  The US and RI were clearly unprepared for a pandemic and had to build systems anew for contact tracing, mass vaccinations, equipment, and supplies.  Yes when the US and other countries offered billions and billions of dollars for super fast vaccine development it got done.  But we could have saved many more lives with contact tracing,  proper isolation policies, good equipment, clear messaging and functional support systems so people could isolate and hospitals would have had the capacity to treat those who needed it.   The deforestation of the planet, in Asia, Latin America, Africa, that will be the result of the neoliberal economic approach, will bring us more deadly diseases  while undercutting our ability to control pandemics.  The evidence is quite clear that the current orientation of the health system is inadequate for the challenge, and actually down right wrong headed.  We would get much more bang for our buck investing in public health.  And create at least as many jobs.  

As we all know, asthma is a huge problem in RI.  It is also a perfect example of how supporting the Biomedical industry can go very wrong for our communities.  It is unlikely that there is ever going to be a simple one pill cure for asthma.  Massively reducing asthma is going to take community health initiatives such a much cleaner air, healthier housing and stopping the climate catastrophe.  Yet all of the money going into asthma is going into treatment instead of prevention because treatment allows for the creation of patentable medicines that can have very high prices abetted by constant tweaking of patents.  Whereas prevention just saves the public and the community millions, money not stuffed into some billionaires yacht, and fits more broadly with the goal of community health and prosperity by allowing kids to go to school.  No wonder it is neglected.

The Blue Economy

The Blue Economy cluster is a wide ranging cluster with rather disparate parts.  Some parts for the cluster are clearly forces for good, providing real benefits to our communities, though even many of these industries have serious and credible detractors.  The study of marine systems and remote sensing for scientific purposes  increases our store of knowledge.  The anti science crowd may oppose actual scientific research, but few others do.   In the climate catastrophe supporting and aiding the development of the wind turbine industry is mostly a good thing.  Better data on fisheries will enable us to keep the ecosystems that feed us healthy, and almost everyone wants to protect traditional fishing, but new fishing technologies are vacuuming up the world’s fish at unsustainable rates and the disputes between the offshore wind industry and fishers is going to be a critical set of issues to resolve.  Creating boats to serve the wind industry is cool, though we could really do without the mega yachts of the super-rich. But there is at least one sector of the Blue Economy that is extremely harmful to our communities.  

Things that kill

Country Joe and the Fish were correct when they said “There is plenty of money to be made supplying the army with the tools of the trade.”  CommerceRI seems to be obsessed with that part of the song, while forgetting about the line that goes ‘Whoopee we are all going to die”, and clearly does not give a shit that weaponry does not provide ANY benefits to communities, and if used could mean the destruction of the entire life support systems of the planet.  Yes, Uncle Sam spends boatloads of money on weapons, and has arms manufacturers in almost every congressional district so that congresscritters keep voting for new and better ways to kill, but the results are a country at war with itself and unable to care for its communities.     The US spends more than the next 11 big defense spending nations combined each year on new and better ways to kill.  The US has lost or stalemated with horrific collateral damage every military excursion we have undertaken in the last 70 years, and continues to borrow more and more each year to keep building despite a despicable record.    From Vietnam to Central America, Africa, Asia, the Middle East, and now in Ukraine we have undermined peace and stability everywhere while encouraging a leaning towards authoritarianism by putting so much of our federal spending and policy energy off limits to public discourse.  As President Eisenhower said, beware the military industrial complex.  While it creates a few high paying jobs, it creates nothing of value for our communities and is a direct threat to democracy as it keeps living standards down and makes autocracy more likely.   And any other way we could spend that money would create more jobs.  


Two topics that are always ruled out of bounds in polite society, but which should be front and center in public policy is the relationship between our military build up and the violence plaguing our communities and our overactive war machine squandering wealth on useless junk and the fostering threats to democracy in the USA.  The glorification of violence, supporting violence on screen in Hollywood, and advertising on TV, does come home to roost and creates an atmosphere in which violence is normalized. The need for bodies for foreign incursions and the isolation from the rest of society means that fascist ideologues are rampant in the military,  and when the fascists get out of the military our communities are filled with people trained to kill who come home broken, and end up disgruntled in civilian life and attracted to demagogues. The immense sums of money going into the war machine produces nothing that benefits our communities and has prevented money flowing towards solving our real problems.  It is a recipe for disaster as January 6 2021 clearly shows.

The missing cluster that should be at the heart of the report

The context for this statement is that Act on Climate requires that all parts of the government of Rhode Island work diligently towards climate justice and decarbonizing our society.  CommerceRI seems to have missed the memo. 

Considering that  Climate Justice is probably the most critical factor in creating future prosperity in Rhode Island you have to wonder why there is no Climate andDecarbonization Cluster including not only the production of Green Energy, but also innovators in decarbonizing society, producing climate adapted communities, and recycling buildings that are in harms way.  Actually we know why there is no Climate Cluster, it would offend powerful interests and CommerceRI only does what the rich and powerful want. Why else would CommerceRI in the middle of the climate catastrophe call for the elimination of taxes on fossil fuel use?  

Climate change

How RI deals with the changing climate, and what we do to increase resilience and eliminate fossil fuel use will be much more important in our economic future than tax policies, job training, or real estate scams.  But other than building wind turbines the only proposal on climate that is in the report is the idea of eliminating taxes on fuel use for businesses, which may put a little money in the pockets of business owners, but will increase the amount of fossil fuel used to power Rhode Island at a time when our Act On Climate law says we must be dramatically reducing fossil fuel use.  And economists around the world agree that raising the price of carbon by taxing it and redistributing the money to lower income community members and investing in clean energy will help us move towards a climate ready economy.  Gutting fuel taxes is totally irresponsible, but CommerceRI has its blinders on.   

The Climate Crisis, like all crises, is also an opportunity.  If CommerceRI put on their thinking caps, they would realize that opportunities for innovation abound in the climate sphere, and that this is where they should put the people’s resources instead of helping giant banks and businesses that produce new and better ways to kill.  Ending the climate catastrophe is the cluster that should have been at the heart of a report on innovation, and it is a typical failure of CommerceRI that it is not. 

Where is the effort to innovate ways to build low cost super-efficient housing that Rhode Islanders could actually afford?  Where is the effort to foster innovation in energy efficiency, electrification, and retreating from the coast?  We really need businesses that will help people move back from the shoreline before the buildings fall into the sea.  We have many people innovating in new ways to manage stormwater, but CommerceRI seems to have missed the boat.  

CommerceRI does have a few paragraphs on mass transit and how important it can be to getting people to work, but other than on the I-195 lands, they discuss no innovations or investments specifically directing development towards places that already have good transit connections, or in industries building mass transit.  Yes, Rhode Island is close to places with abundant wind energy, and we have the only working offshore wind farm on the east coast, but Rhode Island has very limited land, and the wind turbine industry requires very large swathes of waterfront property.  Maybe we can develop one or two locations to meet a small segment of the need, but the reality is that Rhode Island will only get a tiny swathe of the business unless we are willing to kick other users off the waterfront.  But there are other segments of the wind farm business that our designers and custom manufacturers could enter, but CommerceRI seems to be ignoring those realities.  

Here are a series of quotes on the climate crisis and the economy that Rhode Island should pay more attention to.  The quotes are not from Innovates 2.0

“Economic assessments of the potential future risks

of climate change have been omitting or grossly

underestimating many of the most serious consequences

for lives and livelihoods because these risks are difficult to

quantify precisely and lie outside of human experience;”

If CommerceRI was really interested in what was best for RI almost all of its resources would be focused on two areas.  Support for businesses by BIPOC people and climate justice.

“These impacts would also undermine economic

growth and development, exacerbate poverty and

destabilize communities;”

CommerceRI seems to be indifferent to poverty and how so much of its efforts exacerbate inequality and poverty as well as undercutting public health and environmental health. 

CLIMATE CHANGE IS A “RUIN”

PROBLEM OF IRREVERSIBLE HARM

WITH A RISK OF TOTAL FAILURE,

MEANING NEGATIVE OUTCOMES ARE

ECONOMICALLY UNQUANTIFIABLE

AND MAY BECOME AN EXISTENTIAL

THREAT TO HUMAN CIVILISATION.

Time for CommerceRI to shift priorities and start to really grok that what it is doing is fiddling while Rome Burns.  

“In many rich countries, per capita emissions among the poorest half of the population

have declined since 1990, contrary to that of wealthier groups. Their current emissions

levels are close to the per capita 2030 climate targets set by the US, the UK,

Germany and France. In these countries then, policy efforts should be focused mainly

on reducing the emissions of the top half of the population, and particularly the top

10%. In low-income and emerging countries, while certain groups will see their emissions

levels rise in the coming decades, urgent action is needed to curb the emissions

of the wealthy.”

Rhode Island has passed Act On Climate and it commits us to a full effort to eliminate emissions of greenhouse gases.  Asking for the elimination of taxes on fossil fuels is foolish, and there is nothing in their report that says CommerceRI takes their responsibilities on eliminating fossil fuels seriously.  Think of all the places that innovation would be useful in this endeavor.  All CommerceRI can think of is wind turbines. Time for a new plan.

“Taxing. Climate policies have been disproportionately borne by low-income

consumers in recent decades, in particular via carbon and energy taxes. More

emphasis should be placed on wealthy polluters. This can be done via policy

instruments that target investments in polluting and fossil fuel activities. Progressive

wealth taxes on the ownership of polluting activities could accelerate divestment,

reduce pollution levels of the wealthiest, and generate much-needed resources to

increase investment in low-carbon infrastructure. Ultimately, the ownership and sale

of assets associated with new fossil fuel projects should be prohibited.”

The brand new IPCC climate change report says it is getting more and more dire, faster and faster.  That CommerceRI mostly ignores climate and seems to think business as usual in the neoliberal sphere will be perfect for  the RI economy is insane.  Lower income people are already reducing emissions,  What is CommerceRI doing to make sure the top of the pyramid and businesses are doing their part, and changing the economy in response to the desperate situation?  Nothing?  If CommerceRI was really doing its job, all of its resources would be going to helping create and grow industries that reduce emissions, pull us away from the rising seas, create more food security rather than niche products, provide zero carbon buildings for every part of RI’s life and economy, and encourage businesses to stop their people from flying.  

If Rhode Island Innovates 2.0 was really a document  charting a sustainable future prosperity it would have devoted most of its space to a cluster that CommerceRI ignores, despite a mandate from the Act on  Climate legislation, the Decarbonization and Adaptation cluster, maybe using things like the new report from Climate Jobs RI as a starting point and then talking to all of the folks working  on climate and Climate Justice issues and technologies. .  It is not as if we do not have scientists focused on climate issues here.  We may not be making solar panels and maybe we are not doing some of the other things that CommerceRI looks for in its bets.  But that is no reason not to focus on a decarbonization and adaptation cluster.  In fact it is probably a good reason to focus on it more.  We could devise new and better ways to salvage buildings before they flood.  We could innovate with how to turn parking lots into solar farms instead of cutting forests.  In other words CommerceRI is stuck in an out-moded way of thinking about innovation and the kinds of things we need to do to get ready for the future.    

Comments on other aspects of the report

Job Training 

For the most part Job Training is a good thing.  New skills, upgraded skills are good things. Skills for those parts of the economy coming to the fore, sure.    But there are issues.   You have to ask why profitable companies would be getting this kind of assistance when their lobbyists are constantly asking for tax breaks and other benefits.  Businesses should be able to train their own workers, and it is profitable for them to upgrade the skills of their workers.  Now when they are finding a shortage of workers due to the pandemic changes in the workforce, it makes even more sense for the businesses to take a much more proactive approach to developing and training their own workforces.  It is noted that some of the programs are paid for by the businesses that benefit from them, but why aren’t all of the programs paid for by the employers, and done without government help?  Or is it that we practice socialism for the rich?  Instead of paying for training programs, why not make college or community college free.  In one place the report points out a business that has set up a training program at a public college, but also points out how much subsidy that same business receives.  This type of contradiction is troubling in a place where public expenditures are called socialism, but giveaways to the biggest businesses are okay.  

Here is a short quote from the report.

“Real Jobs RI

is providing tangible benefits to manufacturing companies (e.g., Electric Boat),

financial institutions (e.g., Bank of America), life science companies (e.g., Amgen),”

Excuse me, but why would 3 of the biggest and richest corporations in the US need public assistance for job training?  Banks have licenses to steal (create money) , why do they need our help to train workers?  And why are we subsidizing an industry that moves jobs out of downtown Providence to places where more people will be driving to work?  Amgen is in life sciences and it is minting money hand over fist.  They can afford to train the people they hire, and hire people they know they need to train.  Electric Boat makes things to kill people, and all of its money already comes from the tax payers.  Why are we giving them even more money except for the excessive devotion to killing by our politicians. (A devotion that keeps leading us into wars)   With its huge profits Electric Boat can easily afford to set up their own training programs.  Later in the report it is noted that the Westerly training center for the arms manufacturers is financed entirely by the industry, so why is the rest of their job training program being picked up by us?  And why is a government agency proud of stealing our money to giver to killers?  

Another factor the report neglects is that Bank of America and Electric Boat have both been found guilty of major ethical breaches in recent years and been fined hundreds of millions of dollars.  Why is the state of Rhode Island touting and supporting companies with such lousy ethical records that have massively cheated the public? 

Another short quote

“Since the absolute size of the employment base in Rhode Island’s non-advanced industries

is still roughly ten times the size of the employment base in advanced industries, the total

number of jobs added to Rhode Island’s economy is still primarily in industries with lower

GDP per worker.

• In absolute terms, between 2010 and 2019, non-advanced industries added roughly

39,400 net jobs compared to roughly 2,800 net jobs added in advanced industries.”

I did mention this earlier, but it bears repeating. All of the focus of the report is on industries that added less than 7% of the new jobs in RI, not even 10% to match their current employment in the economy.  While these industries grew a bit faster than the rest of the RI economy, it is interesting to note that their growth is disconnected from job growth, in which they lag the rest of the economy.   What is also missing in the report (relevant here and whenever Commerce RI touts its neoliberal approach to development RI) is that despite the ups and downs of our business climate rankings and tax rates the Rhode Island economyconsistently grows at about 70% of the growth rate of the USA, and it is unrealistic to expect that give aways to the rich will move us up to the national or global averages).    Can we imagine any other state agency that would tout that almost all of its effort goes to help only a tiny sliver of the most wealthy Rhode Islanders and actively undermines the ability of Rhode Islanders to access housing and health care or live in a democracy?

The I-195 lands

“The 195 District offers a once-in-a-century opportunity to remake Providence’s urban

space given its strategic location along the Providence River and near key innovation assets

like Brown University’s Warren Alpert Medical School, downtown, and major hospitals.

Exciting progress is being made, notably with the opening of the Point 225 (Wexford)

building housing the Cambridge Innovation Center (CIC), Venture Cafe, and RIHub.

There is over $500 million of public and private investment (representing more than

1 million square feet of new development) already completed or underway in the 195

District.”

For an agency that supposedly has such a future focus CommerceRI has again missed the boat.  Why did CommerceRI and its pet toy the I-195 commission not require zero carbon buildings, include industries other than those that raise the price of everything, or include housing for workers?  Yes, what has been built looks reasonably modern, the new bridge is great, but very few folks other than those building the buildings or in a few favored industries are happy.  And the Fane Tower is a perfect example of the ruling class screwing the rest of us.  

Let us be very honest.  As long as real estate games are the core of RI economic development policy we shall see displacement and homelessness in proportion to the number of people attracted to high paying jobs beyond the amount of housing for lower income people that is created.  After all economies really are built bottom up. 

Tax policies and the business climate

Over the last 10 years I have repeatedly asked policy leaders in RI for their evidence that improving the business climate actually increases the growth rate, but not a one has produced such evidence.  One day on TV I challenged a right wing crank about it, and had all my references in hand.  He admitted that he lied because it sounded good and seemed to fit the meme.  I have asked economists about it when they testified at public hearings.  They had nothing to back up the assertion. I have specifically commented on it at CommerceRI meetings.   They do not care to listen.  The power structure likes the idea that give aways to the rich work and will do anything to maintain the façade, including lie.  

But what happens when you base policy on a Lie? Mostly you get results that do not meet expectations,    I checked the numbers.  RI except in recession years, has a growth rate about 70% of the national growth rate.  In other words, it says RI’s growth rate is totally dependent upon what is going on around us, and no matter what our policies, we are unable to jump up in growth rates.  The reason for this is pretty simple.  Growth rates are more dependent upon natural resources and immigration from rural areas to cities than innovation or tax policies.  

If nothing else convinces you that the whole idea of a business climate is bogus and mostly used to bludgeon communities into giving more to the rich, check this one out.

“The state ranked

40th for small businesses in the Fit Small Business

Index, which focuses on business environments

for smaller firms; however, Rhode Island’s small

business survival rate is the strongest in the

country.”

This one is so telling. Rhode Island received a 40th out of 50 ranking in our business environment while small business survival rate is strongest in the country.  Can we throw the whole industry of business rankings out of the state now and refuse to pay attention in the halls of government ever again?  

In the interest of sanity and your time, I did not grab quotes from Innovation 2.0 on how RI does not have enough access to capital and that really harms new businesses.  The whole report harps on the idea that there is no access to capital, which is a killer for new businesses, but RI has the best survival rate in the country for small businesses.  When do they do a real analysis of what is going on instead of parroting neoliberal crap? 

The reason that we do not have an honest evaluation of the lack of importance of the business climate or how little it matters in the real world is that the neoliberals and their lackeys really do not care all that much about facts or truth, they are happy to get what they want by lying.  Increased growth is really not the goal (even if it were possible), increased power for the rich is.  Shrinking government and its ability to protect workers and the environment is much more important to them than a higher growth rate. They also like creating uncertainty and unrest as it enables them to dismantle democracy faster.  Trump is exhibit number one.  Use racist policies to increase disgruntlement, and then use that disgruntlement to eliminate environmental and democracy protections.

So RI is spending more and taxing less, or rather the rich are dodging taxes and shifting the burden to the workers.  How do you spend more on infrastructure and not tax for it, you borrow it or get it from Uncle Sugar?  Recently I participated in a process examining how well the RI State process on spending transportation infrastructure money operated.  Every member of the public who testified said the process is skewed towards car infrastructure in an age of the climate catastrophe instead of climate smart infrastructure and that the whole process needs a lot more public transparency and an elimination of the bias towards what the rich want.  

The other part of this attack on RI by CommerceRI is touting quality of life while doing everything they can to undercut it.  Wetland regulations are critical to quality of life.  Taxes sufficient to pay for schools and protect the environment are undercut by low taxes and constantly complaining by the rich. 

Random quotes and responses

Before reaching conclusions I had to offer up a few more choice morsels of the demented thinking that permeates CommerceRI and the economic development game as practiced in Rhode Island 

“Moreover, few Rhode Islanders see themselves as

benefitting from innovation and research investments,

which often receive limited political and legislative

attention.”

Have they ever thought that this is because most of the benefits go to a very small number of people, while the public health suffers and the state budget is stymied by the lie that low taxes speeds up growth.  CommerceRI needs to start speaking the truth.  

“The need to more effectively communicate the success stories needed to gain wider

public approval for research and innovation investments and for the wider public

to understand the positive economic spillover effects of growing Rhode Island’s

biotechnology industry.”

Maybe they need to focus on the real problems in RI such as asthma and clean air. workforce housing, and inequality rather than patentable stuff.   This is not really a public relations problem.  It is a real problem when the government helps the rich and screws the poor. 

Conclusions

CommerceRI has a long and sordid history, with some spectacular fails and an everyday disdain for the public and what would benefit most Rhode Islanders.  Whole hearted advocates of neoliberalism they are advocates of policies based on lies, as demonstrated by the fact that they have never once cited a study that backs up the assertion that low taxes and little regulation actually improves economic performance. All they do is cite business climate reports, which rate states, but never make the correlation statistically between ratings and performance.  

In Rhode Island Innovates 2.0 CommerceRI has handed us a jargon filled report that touts clusters of industries  that actually harm Rhode Islanders, produce few jobs, and lead to greater inequality, more violence, and worsening public health, as well as undercutting the ability of the state of RI to provide services. The most egregious error is that it mostly ignores the elephant in the room, the climate catastrophe, and other than touting windmill development and offering lip service to public transit, offers us nothing.  An Innovates 2.0 for the current crisis would have focused almost exclusively on climate and climate justice as over the next decade how Rhode Island responds to the climate catastrophe that is rolling through will determine our economic health much more than anything in the report.  That no effort was made to really think about what to support in way of innovation and justice is to their everlasting shame.  

Bibliography

Health care


http://newsletter.convergenceri.com/stories/health-innovation-policy-for-the-people,6962
     (Greg’s essay)

https://democracycollaborative.org/learn/publication/health-innovation-policy-people

http://newsletter.convergenceri.com/stories/is-the-role-of-optum-an-optimal-role,7104 

The War Machine

The Rhode Island Economy, the Business Climate game, and the Climate Crisis

https://www.breakthroughonline.org.au/_files/ugd/148cb0_3696c267fcac4eaead397134301c4068.pdf