Why do we care what CNBC thinks about R.I.?

Jul 12, 2013

Rhode Island’s business climate has once again been scored as one of the nation’s very worst. RIPR political analyst Scott MacKay on why these ratings don’t tell the whole story.

As if our state was a broken record, the CNBC cable channel has replayed an old song: Rhode Island is a terrible place to start or grow a business. This year, our state’s overall rating on the channel   best known for stock picker James Cramer’s bellowing is 49th out of 50. Last year, CBNC’s `Top States for Business’ list had us at 50th, the very bottom of the barrel.

In Rhode Island, a small state with a big chip on its shoulder, these rankings every year get outsized attention from the media and the business and political communities. The ratings play into Rhode Island’s self-lacerating inferiority complex.

Even the Democrats who run Smith Hill take these rankings seriously. The recent legislative session featured a celebrated push by Senate President Teresa Paiva Weed, D-Newport, to ``move the needle’’ by reviewing factors that cause our state to rank low in business-friendliness. The Senate and the Rhode Island Public Expenditure Council produced yet another report laying out the state’s problems.

Yet, a peer beneath the veneer of the latest CNBC ratings makes one wonder how much attention should be paid to these and the rankings of other think tanks.  The top states for business this year are South Dakota, Texas, North Dakota, Nebraska and Utah. These states have very little in common with Rhode Island or any other New England state.

Wonder why Texas has a lower unemployment rate than Rhode Island? Well, when New Englanders are paying $4 a gallon, a state with large deposits of gas and oil is obviously going to prosper. The same applies to the fracking-friendly Dakotas.

Rhode Island is a watery sliver of a state, with rocky soil, hardly large enough to be county anywhere west of the Berkshires. We’ve  never had extractive mineral or oil resources. Since the 17th century we have made our livings by our wits, beginning with Clipper ships and then becoming the birthplace of the American Industrial Revolution.

What the top five states in the CNBC ratings share is an aversion to organized labor. All of them are so-called Right to Work states that make it very difficult for workers to organize for collective bargaining rights. With the New England tradition of worker fairness and decent  public services, none of the six states in our region will ever finish atop such rankings. If the main metrics of being a business-friendly state is one where management holds all the cards, Rhode Island will never rise to the top.

Another category used by CNBC is the existential one called `Quality of Life’  where Rhode Island ranks 20th out of the 50 states. Ok, so do you really want to live in Texas, a sprawling , summer sauna bath of a state where guys over the age of 12 think it is perfectly normal to dress in cowboy boots and Stetsons. Not to mention all those Dallas Cowboy fans.

And do you really know any smart young person who doesn’t plan a career in the National Hockey League who would turn down an acceptance from Brown or Providence College to attend the University of North Dakota?

So let’s admit we can’t put oil under the ground, can’t get rid of winters and can’t get utility rates as low as that socialist creation, the Tennessee Valley Authority.  And let’s say we don’t want to become a Right to Work for Less state.

Instead of kvetching and birthing another study that will be ignored, Rhode Island lawmakers can make some changes that will boost the economy in our recession-slowed state. Invest in education, which we have not done as well as neighbors Connecticut and Massachusetts. We should be asking why in-state tuition at UConn and UMass is so much lower than at URI?

Pursue government efficiency by consolidating our redundant and overlapping education, public safety and  water authorities.

Our lawmakers could also streamline the regulatory  burdens on business, so  long as they don’t threaten environmental quality. We need to make smart investments in infrastructure. And we need to pursue cheap, environmentally sound energy sources, particularly Canadian hydro power.

The Smith Hill crowd could also stop doing stupid things, like the 38 Studios deal. And making tax policy in the middle of the night. Was it really smart to cut alcohol taxes but not corporate taxes?

It is sad that our lawmakers, the media and the business community don’t get as upset over the well-being of our children as they do about a cable-news channel survey. The latest data from Kids Count, the child advocacy organization, ranks Rhode Island 26th of the 50 states in overall child well-being. The top three states in this study are our New England neighbors, New Hampshire, Vermont and Massachusetts. (Texas is 42nd in this measure).

The other thing we can do is lighten up on the Rhode Island naval gazing. The media in Massachusetts barely mentions these rankings; The Boston Globe mostly ignores such thin gruel.

And remember the famous words of Mark Twain: Figures don’t lie but liars figure.