Response to article in RI future
Economic development in Rhode Island does not work because it is based on tax subsidies for real estate specualtion. The IMF and the World Bank have repeadtedly pointed out that tax breaks for the rich provide no benefits and can harm economic performance. Picketty pointed out that anything that makes an economy more unequal, which subsidies to the rich clearly do, harms an economy’s performance.
Rhode Island uses tax subsidies for the rich as its basic economic development strategy because of a complete lack of understanding of where the economy is going in the 21st century. We need to focus on ecological healing, food security, and building resilience to climate change. We also need to understand that we shall not see any more real economic growth. Until we actually understand that the economy needs to be more equal as it shrinks, we shall be stuck in the 38 studios model of give money to the rich and watch them squander it.
We are repeatedly told that nothing gets built in Providence without subsidy. That is a perfectly good reason to quit waiting for resal estate speculation to improve our economy. No self respecting capitalist would actually take a subsidy. But then again, the real estate barons in RI have always been crooks with a very weak understanding of how the economy works. All they want to do is line their pockets. If you can not do a project without subsidy, it is the wrong project.
What we really need is for the price of real estate to come down to what the market can actually afford. The subsidy game just artifically inflates the price of real estate rather than allowing it to come down to what is actually affordable.