Welcome to another edition of my weekend column – as always, send your takes, tips and trial balloons to tnesi (at) wpri.com. For quick hits all week long, follow me on Twitter: @tednesi.
1. David Cicilline and Brendan Doherty meet Tuesday night at PPAC for their first big debate of the 1st Congressional District campaign (live on WPRI 12). Doherty was down by six points in recent polls from WPRI and Brown, making Tuesday a key night – and a big opportunity – for the Republican newcomer. As Mitt Romney will attest, a debate win can give a huge boost to a campaign that is down but not out. Doherty needs to convince undecided voters and perhaps some of those supporting Cicilline and independent David Vogel that he’s an acceptable choice in a district set to back Barack Obama by a wide margin. The expectations game matters less in a local debate than a national one, but Doherty could benefit from relatively low expectations after his March misfire on Newsmakers; Cicilline, on the other hand, is usually the smoothest talker in Rhode Island politics (occasionally too much so for his own good). It should be an interesting exchange. You can reserve a free ticket to the debate and submit a question for the candidates here.
3. Slate’s Matt Yglesias has an interesting piece that discusses the idea of “economic gardening.” As Yglesias describes it, economic gardening suggests “local authorities ought to look around at the businesses they already have and ask what would it take for some of these firms to grow. You’re creating your own engines of prosperity out of the seeds that are already available in your community, trying to build up local strengths rather than bid to the bottom for transplants.” The 38 Studios deal was the opposite of economic gardening; it involved luring a company only marginally connected to the state’s dominant industries in the hopes it would seed an almost entirely new sector (one that was already well-established in nearby Massachusetts). From an economic-gardening standpoint, then, which sectors are already thriving in Rhode Island? One that comes to mind is medical technology and consumer health: think CVS Caremark in Woonsocket, Ximedica in Providence, IlluminOss in East Providence and Covidien just over the border in Mansfield, Mass. What do they need to keep growing – faster, bigger, sooner?
4. Glad to see that two of Rhode Island’s historic theaters will be opening again after going dark for several years. The East Greenwich Odeum says it’s on track to reopen sometime this fall, and the Columbus Theatre on Federal Hill in Providence will reopen on Nov. 17 with a “Revival!” event featuring local bands. Coincidentally, both theaters first opened in 1926.
5. A rare bright spot in Rhode Island’s economy is Cranston’s fast-growing Alex + Ani, and its success is another reminder that everyone – including, perhaps particularly, government officials – should be modest about our ability to predict what the marketplace will want next. It’s hard to imagine an EDC director going to the General Assembly and telling lawmakers that Rhode Island should look for ways to support manufacturers engaged in the production of inexpensive, positivity-minded jewelry. Yet by doing just that Alex + Ani has exploded in a few short years from a company with 23 workers and about $4 million in sales to one with nearly 400 workers and more than $50 million in sales. It’s not the knowledge economy, and it wasn’t guided by anyone in officialdom, yet at this pace Alex + Ani will create more jobs than 38 Studios was supposed to.
6. One more thought on the economy: a successful business isn’t always synonymous with a huge increase in employment. Case in point: Taco Inc. and its CEO John Hazen White Jr., who’s my guest on Executive Suite this weekend. Taco went through a near-death experience in the early 1990s, when its annual sales fell below $30 million and it had about 500 employes. Two decades later, Taco’s sales have climbed to nearly $200 million – yet the company still has about 500 employees. That’s a sign of significant productivity gains, which is a good thing, but it’s also a sign that the growth of the Rhode Island economy doesn’t have to mean growth in total employment; in fact, Taco’s experience reflects exactly what’s happened across the state’s manufacturing sector since 1997.
7. Color me excited that the great singer-songwriter Sufjan Stevens is bringing his tour to Providence later this year. He’ll be playing Dec. 19 at Fête, a music venue in Providence’s Olneyville neighborhood that opened a year ago. Tickets went on sale Friday. … Also on the Post’s calendar of events, Leadership Rhode Island and state officials have organized Dine Central Falls, an abbreviated restaurant week this Thursday through Saturday for the tiny city. I’ll bet CF’s mayoral hopefuls will be around and about.
8. As part of his efforts to reboot economic development, Governor Chafee is ordering a new study of Rhode Island’s business climate that will suggest how to change the state’s tax system to make it more competitive with those of other states. While Chafee has hinted in the past he might take another crack at lowering and broadening the sales tax, that sounded unlikely when I asked him about it on Thursday. “I certainly don’t want to revisit proposing major changes in tax structure and then getting beat up over it, as I did in my first budget,” the governor told me. “If there’s going to be buy-in and we can change our tax structure, I’d certainly entertain that. … You’ve got to have more buy-in to be successful.” Chafee also expressed major reservations about putting the Department of Environmental Management under the authority of a new commerce secretary.
9. Speaking of Chafee, it will be interesting to see what action – if any – is taken by the EDC board’s litigation subcommittee, which is discussing whether to file suit against those involved in crafting the 38 Studios deal two years ago. Max Wistow, the lawyer Chafee brought in to explore his legal options, is reported to be doing just that – aggressively. A major lawsuit or set of lawsuits against Rhode Island’s top law firms and perhaps even some of its corporate leaders has the potential to exacerbate Chafee’s already strained relationship with Rhode Island’s business community, which could complicate his efforts to tackle economic development. We’ll see.
10. If bond investors are offering Rhode Island the lowest interest rates in its history, shouldn’t the state be borrowing more money right now? Gina Raimondo has hinted she’s thinking that way, and there are plenty of infrastructure projects that need to be done soon. Some people are opposed to any and all state borrowing, and that’s fine – but if you’re someone who acknowledges Rhode Island taxpayers will be borrowing money at some point over, say, the coming decade, shouldn’t as much of it be borrowed as possible now, while interest rates are at historic lows and 10% of the state’s workers are idle?
11. This passage about John Maynard Keynes, penned by his biographer Robert Skidelsky,sounds like the eminent economist could have been talking about Rhode Island’s pension problems: “There was, [Keynes] argued, a limit to the national capacity to service debts. Those expecting further payments were bound to be disappointed. More than that, efforts by creditors to insist on further debt payments would be politically dangerous. ‘If they do sign,’ he wrote to a friend, ‘they can’t possibly keep some of the terms, and general disorder and unrest will result everywhere.’ He recommended a round of debt cancellation among European countries, a plan that would – at the stroke of a pen – remove much of the problem.”
12. Set your DVRs! This week on Newsmakers – an abridged version of our 2nd Congressional District debate between Jim Langevin and Michael Riley. Watch Sunday at 10 a.m. on Fox Providence. This week on Executive Suite – Taco’s John Hazen White Jr. Watch Sunday at 6 p.m. on myRITV (or 6 a.m. on Fox). See you back here next Saturday morning.