By Pat Crowley in
RIFuture.org
If you are of a certain age “Ferris Bueller’s Day Off’
is an iconic movie. Reading about the fretting going on in the media
about the latest edition of CNBC “Business Rankings” I can’t help but think
about the movies’ opening sequence when Ferris’ parents, thoroughly convinced
he is sick (once again) let him stay home from school and as soon as they close
the door to his bedroom and are safely out of ear shot he shoots up from under
the covers and says:
Five years ago, CNBC
ranked Rhode Island 48th in the country. At
the time, our unemployment rate was less than half of what it is today, 5.2% for July of 2007.
In the legislative session that followed, there was a progressive
proposal to revamp the tax structure of the state, known as the Economic Growth
and Fairness Act of 2008.
I’m not interested in re-arguing those ideas
here, what I am interested in is the response to the bill from the corporate
class in Rhode Island. Writing in The Providence
Business News, Greater Providence Chamber leaders Laurie White and
Ed Cooney specifically referenced the CNBC ranking as a reason to kill the
bill.
But more interestingly, they ended their essay with these words:
Protect our jobs. Fight for our ability to compete.
Stay the course on tax reform.
I could be snarky and ask “Whose jobs?” but I
won’t. But I will point out the current unemployment rate is 10.9%
according to DLT. But it is the “stay the course” line that is intriguing to me
for two reasons.
- We have stayed the course. And it hasn’t worked.
If 5 years ago we were ranked near the bottom in the
country we are now at the bottom (again, assuming these lists matter, which I
am not willing to concede, but for arguments sake….).
In those 5 years,
we have seen the Flat Tax option for high income earners made permanent, cuts
to the income tax, two rounds of draconian pension reform to public sector
workers including teachers and state employees, an erosion of collective
bargaining rights in the public sector, cuts to social services in the state
budget, aid to cities and towns in the state budget slashed and slashed again,
and the escalation of the property tax cap at the local level thanks to the
3050 law of 2006.
In other words, state mandated austerity for the last
five years and our “Business Climate Ranking” declined. Now, we can
believe the corporate class and say “stay the course” or as more recently
stated “give the cure more time to work” or we can wake up to the realization
that Ferris isn’t sick…he’s skipping school.
2. When did Tax Reform Start?
When Ferris says “They bought it” who is “they” in
this case? The legislature? The Press? Both? Maybe…. you can help
decide. See, the theme in the debate over the proposal in the last
legislative session to raise income taxes on the wealthy centered in part on
giving recently enacted tax cuts a chance to work.
SOME local media
outlets (I won’t link to them, you can find them on your own and decide) fell
for the argument hook line and sinker that tax reform just started in
2010.
That’s why when Chamber Lobbyist Kelly
Sheridan wrote in The Providence Journal “It would
extremely unwise to dismantle the 2010 reform before the first returns are
evaluated” it was a theme repeated by members of the legislature AND,
unfortunately, members of the media.
But wait a minute: Didn’t the Chamber use the exact
same argument in 2008 about letting tax reform take affect so that it can be
evaluated before it is changed? Yes, as we see in the 2008 piece in PBN
referenced above. They also did it in 2009,
when there was a strong push to repeal or reform the Flat Tax for high income
earners. That is where the line “give the cure time to work” comes from. (Of course in 2009, we were still
ranked in 48th place by CNBC).
Why does it matter? Because if the Chamber and
the powerful corporate special interests are allowed to pull the wool over the
media and the politicians eyes every year by saying “hey, we just implemented
this last year, let’s give it a shot” most people are good natured enough to
say “well, sure, why not?
We’ve got to try SOMETHING.” Well, we’ve been
giving them their shot for the better part of a decade, and if only people
would remember that they keep using the same argument that “this time, things
will work out” then maybe we won’t fall for the sales job. Again. Maybe?
Hopefully? Hello? Bueller? Bueller? Bueller?
Look, I get it. Ferris Bueller is an endearing
kid. He’s funny, likeable, smart and in a 1980’s John Hughes movie kind
of way showing a safe way to “fight the power.” But it isn’t real.
And neither is the line of argument put forward by the corporate class in Rhode
Island that we need to “stay the course” or “give the cure time to work” on austerity.
Hopefully Rhode Island can turn things around – but we will never do it
by continuing to run the same plays and chase ideas that continue to drive out
economy deeper into a ditch while enriching those at the top of the economic
ladder. You want a cure that works? We can start by stopping doing the
things we know that don’t work.