From the Bottom Up, Regulations and Economic Development

The mantra says if you lower taxes and reduce regulations the invisible hand of the market will bring you prosperity and perpetual growth. The facts do not bear this out.

The reality is closer to if you lower taxes on the rich and reduce regulations on polluters the few who are already rich will benefit while the rest of the community will be harmed and poorer. The underlying assumption of the already wealthy is that economic development policy should be geared towards making them wealthier with trickle down carrying benefits to the larger community. The results have been 99% of the growth in income going to 1% of the population while 60% of Americans are getting poorer. In low income neighborhoods, economic development that actually reduces poverty and benefits communities is a bottom up process. The use of assets to generate wealth must place the overwhelming majority of the benefits in the hands of the poorest members of the community if poverty is to be reduced. This is why gentrification and real estate driven development is so problematic. The benefits flow out of the community into the hands of “developers”. We merely displace the poor to another spot. This process mirrors almost exactly what is happening to tropical forest communities as their economies change. When the community gets secure tenure to the forest, everyone benefits. When the forest is no longer locally controlled, it disappears, the children get hungry, and those people who do not die move to shanty towns. Until brownfields are turned into assets that directly benefit the people already living in the neighborhood poverty can be shifted to another location, but it will not be eliminated.

On the regulatory issue, everyone agrees that the process should be efficient, fair, transparent and reasonably swift. The problem is that as the government and its prodders seek to streamline the process they also seek to reduce the quality of protections for the public, AND they seek to cut the public out of the process. If you remember the bottom up approach from the previous paragraph, then you know that cutting the community out of the process of seeing if a particular project is appropriate for the community almost guarantees failure, and in Rhode Island, almost guarantees inside dealings. As we streamline the permitting process it is critical to our success as a state to make it easier for communities to intervene at the appropriate times and places and to stop bad projects.

History tells us that when the wealthy are allowed to do as they please, it almost always comes to a bad end. We all know how bad 38 Studios turned out for the people of Rhode Island, and we also know that public hearings would have shown the politicos the folly of the project. We need to remember that the flip side of this is the public involvement that helped stop the building of a container port in Quonset, much to the chagrin of the governor, the legislature, and the growth obsessives. The public outcry, sustained over an 18 month period, prevented a one billion dollar debacle that the taxpayers would still be paying off.

In our neighborhoods, as the greening of the economy becomes ever more important and critical for our prosperity, to streamline the regulatory process to the point where the public is streamlined right out of the picture means that truly inappropriate buildings will get built in truly inappropriate places. The long term economic benefits will disappear when in our haste to give out permits we create floods that could have been prevented.

You can not end poverty without healing ecosystems, you can not heal ecosystems without ending poverty, and if Rhode Island wants prosperity we need to stop genuflecting to those who demand that we help them line their pockets through less regulation and lower taxes.

2 thoughts on “From the Bottom Up, Regulations and Economic Development

  1. Thanks again Greg. I love your recent articles really calling it like it is. Thanks for watching the state house, the speaker, governor et al to ensure that awareness spreads !

    Bottom up begins with the Land. Much of Providence’ abandoned land is not clearly claimed by anyone. Banks, in many cases have electronically bought and sold notes out the wazoo, and likely don’t have original deeds or claim to these properties.

    The fact is, the people belong to the land, not t’other way round, and anyone cognizant and bold has a universe of support in tending the garden. Lets get going! We are the ones we been waiting for, the time is now, the fog will clear the brighter we shine.

    Keep speaking from the heart,

  2. Alleluia to most of this. However I find the issues are too complex to be reduced to your statement in the last paragraph re: ecosystems and poverty being directly proportional. They would go hand in hand if members of our society would concentrate on being better stewards of the planet (which includes us all) instead of concentrating on personal gains.

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