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Blais: RI’s Leaders Need an “Ah-Ha” Moment Soon for the Economy

Thursday, January 23, 2014

 

Let’s take stock, how many ways can you arrange the pieces of the state budget before it is too late for our state economy?

Year over year, RI leaders fail to create a budget that includes a plan to eliminate future deficits but wrangle over how much revenue on hand will go to the various agencies and special interests. The structural deficit is definitely not an issue that fans the flames of most citizens’ interests but it sure does burn through their pocketbooks! Do most people realize that the thought process of putting the budget together never seems to consider that doing the same thing year after year doesn't address the underlying problem of not having enough money to pay the expenditures in the near future? Our state can only be run for so long by fighting the current year’s fire.

Who pays for this juggling? You do and so do the truly vulnerable who depend on a safety net in their worst of times and find that their “piece of the pie” has been cut to the advantage of others. The cost of that juggling is expressed in a variety of ways as illustrated by the high cost of living in RI and by the public debt that we approve when we are faced with bond referendum on our ballots when we show up to vote. We weigh that public debt narrowly; we might think that a particular bond is a good use of money or that it represents something that would be nice to have. But, we typically never seriously consider the weight of that debt over time. Or, recall the debt that we approved during prior election cycles.

If you paid attention to Governor Chafee’s recent State of the State Address, you heard his recommendation to approve $275 million of bond referendums this November. This in addition to the $200 million approved at the ballot box last time around which, if this years’ requests are approved, would put us close to almost half a billion in debt! This is our debt punted to future years without even considering the interest on that debt. Half a billion, give or take is a whopping number in context of the size and population of our small state.

There is also other debt that isn’t yours (because you and but a handful of your legislators didn’t specifically approve it) but that the governor has included in his budget this year. He wants us to pay the 38Studios bondholders for a second year in a row. The legislature approved the first payment, a “place-holder”, as it was referred to, of that “moral obligation” last year. Governor Chafee clams that we have a moral obligation to those bondholders for the entire amount, to those same investors who clearly understood that the state had no legal obligation to make good on those bonds.

Where is the “moral obligation” to the taxpayers and citizens of RI? It seems to be sorely lacking as we gasp under the worst unemployment level in the country (tied with Nevada) with too many underemployed people in our state. So, in the big picture who will be hurt by doling out millions to bondholders because of a “moral obligation”? The “ordinary” (tongue in cheek) folks will be and the most vulnerable people living in RI.

Last year, funding for the developmentally disabled had to be fought for while the first payment for 38Studios bondholders was made. Taxi cab drivers have been taxed and this year so will small business owners of bed & breakfasts. It doesn’t pay to be “ordinary” in RI, does it? Property taxes increase while health insurance premiums fall far short of being “affordable” for those of us who pay full boat for coverage, utility rates increase and the underdogs will face yet another fight in the State House for funding again this year.

Let’s pause and look at those utility increases. Robert Shields, chairman of the group Deep Water Resistance wrote in the commentary section of the ProJo "RI will be hurt by deepwater wind". He broke down the numbers very simply and stated that $596 million will be paid by rate payers in additional utility costs. Well, that's a given because of the agreements already reached. The wind farm has a useful life of 20 years so he basically divided the nearly $600 million by the 20 year life span and stated that it will cost an additional $30 million a year for rate payers. That is just like a tax only you don't pay it to the state; you pay it to National Grid. He also asked if the legislature has this cost to the rate payer on their radar. Good question, evidently, they don’t.

RI leaders have a “moral obligation” to the people of RI to provide a state budget that includes plans to eliminate future deficits. Projected deficits of $1.2 billion over 5 years do not even reflect the costs to meet Governor Chafee’s claim that the federal government has set a goal that calls for states to make sure that fewer than 10% of their bridges are structurally deficient. We don’t do pot holes well, what do you think that will cost us? Neither is the estimated cost to run RI’s health insurance exchange, HealthSourceRI, nor is that cost included in this years’ budget. Governor Chafee created this exchange and then stated that the issue of funding it should be discussed by the current gubernatorial candidates! Nice work. Side note, that isn’t your debt either because the legislature never approved the exchange. It was implemented by executive order on the coattails of federal revenue, federal revenue that will dry up soon. The elephant that remains in the room are any additional costs related to potential changes to the 2011 pension reform.

If RI leaders don’t take hold of dealing with the long term deficit then there are only 2 options, more taxes or revamping our notion of what government should be spending our resources on. That's it. Otherwise, the future only looks bleaker.

Remember the childhood song “the ham bone is connected to the leg bone”? The notion that everything is connected applies to our structural deficit and our state budget, too. Time is running out. We are looking for the “ah-ha” moment from our RI leaders that will ultimately save our state’s economy.

Lisa Blais is a board member of OSTPA, a taxpayer advocacy organization in Rhode Island.

 

Related Slideshow: Smallest + Largest Tax Increases in RI

Below are the largest—and smallest—tax increases in Rhode Island cities and towns for fiscal year 2014. The data measures the overall change in the amount levied in taxes between last year and this year. It does not compare changes in individual tax rates for homeowners, which may have been higher than the overall increase if the change in the rates was lower for another group of taxpayers in the community. This year, for the first time, all communities stayed below the annual tax cap, which for 2014 was 4 percent. (The cap applies to the overall levy not individual tax rates. Note that the levies for any independent fire districts in a community are not included.) Below communities are ranked starting with those that had the lowest increases. Data was provided by the state Division of Municipal Finance and is current as of January 7. 

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#39

Pawtucket

FY 2013 to FY 2014 Tax Increase: -0.68%

Rank: 39

FY 2013 Tax Levy: $100,068,109

FY 2014 Tax Levy: $99,386,793

Amount of Increase: -$681,316

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#38

Hopkinton

FY 2013 to FY 2014 Tax Increase: -0.40%

Rank: 38

FY 2013 Tax Levy: $18,300,511

FY 2014 Tax Levy: $18,228,199

Amount of Increase: -$72,312

Note: Has an independent fire district. Levy for fire districts not included.

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#37

Cranston

FY 2013 to FY 2014 Tax Increase: 0.12%

Rank: 37

FY 2013 Tax Levy: $181,367,888

FY 2014 Tax Levy: $181,591,060

Amount of Increase: $223,172

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#36

Jamestown

FY 2013 to FY 2014 Tax Increase: 0.37%

Rank: 36

FY 2013 Tax Levy: $19,089,398

FY 2014 Tax Levy: $19,160,796

Amount of Increase: $71,398

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#35

North Providence

FY 2013 to FY 2014 Tax Increase: 0.40%

Rank: 35

FY 2013 Tax Levy: $67,468,778

FY 2014 Tax Levy: $67,737,041

Amount of Increase: $268,263

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#34

Glocester

FY 2013 to FY 2014 Tax Increase: 0.41%

Rank: 34

FY 2013 Tax Levy: $20,666,156

FY 2014 Tax Levy: $20,750,248

Amount of Increase: $84,092

 

Note: Has an independent fire district. Levy for fire districts not included.

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#33

West Greenwich

FY 2013 to FY 2014 Tax Increase: 0.42%

Rank: 33

FY 2013 Tax Levy: $17,700,512

FY 2014 Tax Levy: $17,775,266

Amount of Increase: $74,754

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#32

Foster

FY 2013 to FY 2014 Tax Increase: 0.56%

Rank: 32

FY 2013 Tax Levy: $11,206,523

FY 2014 Tax Levy: $11,269,380

Amount of Increase: $62,857

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#31

Warren

FY 2013 to FY 2014 Tax Increase: 0.57%

Rank: 31

FY 2013 Tax Levy: $21,962,605

FY 2014 Tax Levy: $22,087,246

Amount of Increase: $124,641

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#30

Barrington

FY 2013 to FY 2014 Tax Increase: 0.66%

Rank: 30

FY 2013 Tax Levy: $55,757,749

FY 2014 Tax Levy: $56,127,312

Amount of Increase: $369,563

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#29

South Kingstown

FY 2013 to FY 2014 Tax Increase: 1.03%

Rank: 29

FY 2013 Tax Levy: $66,399,782

FY 2014 Tax Levy: $67,082,117

Amount of Increase: $682,335

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#28

Lincoln

FY 2013 to FY 2014 Tax Increase: 1.08%

Rank: 28

FY 2013 Tax Levy: $51,933,416

FY 2014 Tax Levy: $52,492,287

Amount of Increase: $558,871

Note: Has an independent fire district. Levy for fire districts not included.

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#27

North Kingstown

FY 2013 to FY 2014 Tax Increase: 1.37%

Rank: 27

FY 2013 Tax Levy: $69,092,073

FY 2014 Tax Levy: $70,035,857

Amount of Increase: $943,784

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#26

Cumberland

FY 2013 to FY 2014 Tax Increase: 1.53%

Rank: 26

FY 2013 Tax Levy: $59,560,610

FY 2014 Tax Levy: $60,472,810

Amount of Increase: $912,200

Note: Has an independent fire district. Levy for fire districts not included. Cumberland actual amount is an estimate reported by the town. Final levy will be set in May 2014

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#25

Warwick

FY 2013 to FY 2014 Tax Increase: 1.57%

Rank: 25

FY 2013 Tax Levy: $220,300,865

FY 2014 Tax Levy: $223,763,444

Amount of Increase: $3,462,579

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#24

Little Compton

FY 2013 to FY 2014 Tax Increase: 1.74%

Rank: 24

FY 2013 Tax Levy: $10,153,215

FY 2014 Tax Levy: $10,329,739

Amount of Increase: $176,524

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#23

East Providence

FY 2013 to FY 2014 Tax Increase: 1.91%

Rank: 23

FY 2013 Tax Levy: $101,738,436

FY 2014 Tax Levy: $103,679,393

Amount of Increase: $1,940,957

Note: East Providence fiscal year is Nov. 1 to Oct. 31. Figures represent an state estimate which will be finalized in spring 2014.

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#22

Westerly

FY 2013 to FY 2014 Tax Increase: 1.93%

Rank: 22

FY 2013 Tax Levy: $64,073,479

FY 2014 Tax Levy: $65,309,605

Amount of Increase: $1,236,126

Note: Has an independent fire district. Levy for fire districts not included.

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#21

Middletown

FY 2013 to FY 2014 Tax Increase: 1.95%

Rank: 21

FY 2013 Tax Levy: $42,569,846

FY 2014 Tax Levy: $43,400,329

Amount of Increase: $830,483

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#20

Charlestown

FY 2013 to FY 2014 Tax Increase: 1.95%

Rank: 20

FY 2013 Tax Levy: $22,244,817

FY 2014 Tax Levy: $22,679,022

Amount of Increase: $434,205

Note: Has an independent fire district. Levy for fire districts not included.

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#19

Tiverton

FY 2013 to FY 2014 Tax Increase: 2.22%

Rank: 19

FY 2013 Tax Levy: $36,705,787

FY 2014 Tax Levy: $37,519,924

Amount of Increase: $814,137

Note: Has an independent fire district. Levy for fire districts not included.

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#18

Narragansett

FY 2013 to FY 2014 Tax Increase: 2.25%

Rank: 18

FY 2013 Tax Levy: $45,045,014

FY 2014 Tax Levy: $46,060,213

Amount of Increase: $1,015,199

Note: Has an independent fire district. Levy for fire districts not included.

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#17

Portsmouth

FY 2013 to FY 2014 Tax Increase: 2.41%

Rank: 17

FY 2013 Tax Levy: $46,892,274

FY 2014 Tax Levy: $48,021,889

Amount of Increase: $1,129,615

Note: Has an independent fire district. Levy for fire districts not included.

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#16

Providence

FY 2013 to FY 2014 Tax Increase: 2.42%

Rank: 16

FY 2013 Tax Levy: $332,768,119

FY 2014 Tax Levy: $340,814,523

Amount of Increase: $8,046,404

Photo: Flickr/thurdl01

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#15

Smithfield

FY 2013 to FY 2014 Tax Increase: 2.43%

Rank: 15

FY 2013 Tax Levy: $50,485,821

FY 2014 Tax Levy: $51,713,919

Amount of Increase: $1,228,098

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#14

Scituate

FY 2013 to FY 2014 Tax Increase: 2.63%

Rank: 14

FY 2013 Tax Levy: $25,737,325

FY 2014 Tax Levy: $26,415,040

Amount of Increase: $677,715

Note: Scituate fiscal year is April 1 to March 31.

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#13

Johnston

FY 2013 to FY 2014 Tax Increase: 2.73%

Rank: 13

FY 2013 Tax Levy: $68,325,207

FY 2014 Tax Levy: $70,191,873

Amount of Increase: $1,866,666

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#12

Exeter

FY 2013 to FY 2014 Tax Increase: 2.76%

Rank: 12

FY 2013 Tax Levy: $12,699,098

FY 2014 Tax Levy: $13,048,989

Amount of Increase: $349,891

Note: Has an independent fire district. Levy for fire districts not included.

Prev Next

#11

Bristol

FY 2013 to FY 2014 Tax Increase: 3.20%

Rank: 11

FY 2013 Tax Levy: $35,907,363

FY 2014 Tax Levy: $37,055,367

Amount of Increase: $1,148,004

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#10

Richmond

FY 2013 to FY 2014 Tax Increase: 3.39%

Rank: 10

FY 2013 Tax Levy: $16,192,073

FY 2014 Tax Levy: $16,740,541

Amount of Increase: $548,468

Photo: Flickr/peppergrasss

Prev Next

#9

Newport

FY 2013 to FY 2014 Tax Increase: 3.49%

Rank: 9

FY 2013 Tax Levy: $65,177,966

FY 2014 Tax Levy: $67,451,455

Amount of Increase: $2,273,489

Photo: Flickr/Jasperdo

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#8

Coventry

FY 2013 to FY 2014 Tax Increase: 3.56%

Rank: 8

FY 2013 Tax Levy: $62,327,613

FY 2014 Tax Levy: $64,549,069

Amount of Increase: $2,221,455

Note: Has an independent fire district. Levy for fire districts not included.

Prev Next

#7

Burrillville

FY 2013 to FY 2014 Tax Increase: 3.63%

Rank: 7

FY 2013 Tax Levy: $27,830,582

FY 2014 Tax Levy: $28,840,267

Amount of Increase: $1,009,685

Note: Has an independent fire district. Levy for fire districts not included.

Prev Next

#6

North Smithfield

FY 2013 to FY 2014 Tax Increase: 3.82%

Rank: 6

FY 2013 Tax Levy: $28,611,366

FY 2014 Tax Levy: $29,705,309

Amount of Increase: $1,093,943

Prev Next

#5

New Shoreham

FY 2013 to FY 2014 Tax Increase: 3.85%

Rank: 5

FY 2013 Tax Levy: $8,400,360

FY 2014 Tax Levy: $8,723,934

Amount of Increase: $323,574

Prev Next

#4

West Warwick

FY 2013 to FY 2014 Tax Increase: 3.89%

Rank: 4

FY 2013 Tax Levy: $54,252,606

FY 2014 Tax Levy: $56,363,626

Amount of Increase: $2,111,020

Prev Next

#3

East Greenwich

FY 2013 to FY 2014 Tax Increase: 3.91%

Rank: 3

FY 2013 Tax Levy: $49,896,853

FY 2014 Tax Levy: $51,845,789

Amount of Increase: $1,948,936

Note: East Greenwich fiscal year 2013 & 2014 levies reflect the towns merger with the fire district in June 2013.

Photo: Flickr/Jimmy Wayne

Prev Next

#2

Woonsocket

FY 2013 to FY 2014 Tax Increase: 3.99%

Rank: 2

FY 2013 Tax Levy: $57,588,098

FY 2014 Tax Levy: $59,888,228

Amount of Increase: $2,300,130

Note: Woonsocket fiscal year 2013 includes a supplemental tax.

Prev Next

#1

Central Falls

FY 2013 to FY 2014 Tax Increase: 4.00%

Rank: 1

FY 2013 Tax Levy: $13,674,638

FY 2014 Tax Levy: $14,221,500

Amount of Increase: $546,862

 
 

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Comments:

What Ms. Blais fails to understand is that it's the policies she proposes that have caused the structural deficit in the first place. She continues in her quest to apply free market economic analysis to a rigged system which is a futile endeavor. I would highly recommend she read Noam Chomsky's brilliant essay on the Tea Party: http://www.rawstory.com/rs/2014/01/20/noam-chomsky-the-tea-party-is-the-petty-bourgeois-face-of-corporate-oligarchs/

He insightfully demonstrates how the Tea Party was co opted by Wall Street and its ilk and is being used to line the silk pockets of the privileged few.

The evidence supporting his theory is overwhelming. The Walton Family has a collective wealth equal to the bottom 40% of the country. Since George W Bush crashed the economy in 2008 95% of economic gains have gone to the top 1%. Finally, 85 people in the world have a collective wealth equal to the bottom half of the world.

So if you believe the ideal utopian economy is one in which one person owns 99% of the wealth and the rest are left to raise chickens in their backyards....by all means listen to this woman.

Comment #1 by Jonathan Bainsworth on 2014 01 23

38 studios should not be repaid, and there should be a full independent investigation. Those who don't want it have something to cover up.

Here here to Dawson Hodgson, Brian Newberry, Mayor Fung who have been at the forefront of this fight. 3 men who have my vote.

Comment #2 by George McDonald on 2014 01 23

George is right about 38 studios and Jonathan Bainsworth continues to spew communist/socialist notions. Who can forget the Hugo Chavez and Noam Chomsky's love affair? Please Jonathan read an economic textbook before you speak.

Comment #3 by michael riley on 2014 01 23

Jonathan,
The State has a bigger problem than the budget if there are more folks like yourself who think that Chomsky wrote a “brilliant essay”. Assuming that you are serious, one has to question your analytical abilities. It would seem that our education system has bigger problems than the State’s budget. Chomsky’s article is a disconnected series of assertions unsupported by fact. There are very few if an insightful remarks only pseudo-Marxist platitudes. The evidence you produce, if accurate and I doubt that it is, has nothing at all to do with the Tea Party. This evidence is underwhelming.

Comment #4 by Michael Byrnes on 2014 01 23

Jonathan: First, your comment is non-responsive to the Blais article. Whether one espouses the ideals of Chomsky or the Tea Party, such positions have absolutely no effect upon the reality of the challenges faced by a State with an imploding structural debt crisis. Second, I would imagine that you would agree with Blais in her plea to have Rhode Island object to making any further payments towards the 38 Studios bondholders. These are the same Wall Street fat cats that you object to morally. Lastly, Blais alluded to the corporate windfall that is being imposed upon rate-payers by an alternative energy developer, courtesy of the Governor and the GA. Perhaps if you paid attention during the PUC hearings and the morally corrupt legislation that followed, you might be able to follow the money and hit the meatball out of the park when it comes lobbing over the plate.

Comment #5 by Rich B on 2014 01 23

Those of us who are interested in the the nuts and bolts of improving the economic health of Rhode Island have little time for the the perverted theory of Chomsky, or attacks on the Tea Party, whose members, in the eyes of the left, are guilty of having jobs and wanting to keep them.

Comment #6 by G Godot on 2014 01 23

Okay I apologize, Lisa Blais with her Rhode Island College degree knows more than Noam Chomsky, father of modern linguistics and author of over one hundred books who also holds numerous achievements and awards including forty honorary degrees on an international level from Harvard to Cambridge. Oh that's right ....republibaggers frown upon knowledge, intelligence and facts.

Comment #7 by Jonathan Bainsworth on 2014 01 23

Little Jonny Brainless reveals himself to be a lefty snobbo. Keep talkijg, Jonboy, you're your own worst enemy. Your hero, Fat Al Gore, flunked out of law school AND divinity school, while Liveshot John Kerry couldn't GET IN to a Ivy League law school after his distinguished carreer at Harvarrrrrrrd. One can always tell when the lefty is cornered, out come the personal attacks. GW Bush has TWO Ivy League degrees.

Comment #8 by G Godot on 2014 01 24

Mr. Godot protests too much methinks. Empty suit Scott Brown tried the snob angle by continually referring to the Senior Senator of Massachusetts as "professor" in the debates in which she mopped the floor with him to the point where he threw up his hands and exclaimed "no mas" as he was chickening out of the fourth and final debate. What folks like yourself and Scottie didn't realize is that in Massachusetts people respect professors. This is also why their economy is thriving while we are turning into "Mississippi" or the "we ain't into fancy book learning" state..thanks to idiots such as yourself.

Comment #9 by Jonathan Bainsworth on 2014 01 24

For too long RI has allowed "leaders" both political and business to direct the economy of the state. Many of the business leaders RI has turned to are the ones who packed up their businesses and moved to Mexico and China taking the jobs of Rhode Islanders with them. Milloions of tax dollars have been given away in tax breaks and outright gifts to business "leaders" who make promises of jobs that never materialize.
It is time to invest in Rhode Island workers and develop Worker Co-operatives and Worker Self Directed Enterprises. These would be industries and businesses that are owned and operated by workers for workers who are stake holders in the the State and their communities.
One of the first places we should begin is at the Providence Journal. Here where the entire state has a vested interest in a quality newspaper a worker owned paper would be free of a cooporate overseer and be real service to the State of Rhode Island. With Bello a Texas corporation looking to sell the paper, is an opportunity for the workers to buy the paper and run it themselves. The people of RI could finance the deal. It certainly would be a better deal than 38 Studios
I would hope that the workers at the Journal would be thinking about the possibility of such an idea. After all the workers there already know how to put out a newspaper and they could learn how to run it as a business. I am sure they could never be as bad a Bello. The new name could be THE PEOPLE'S JOURNAL.

Comment #10 by Eloise O'Shea-Wyatt on 2014 01 24

The second leg of Americas elite socialist attitude has just been displayed in the comments by Jonathan . You believe in communism and you like Chomsky, you declare Chomsky brilliant and cite his education other socialist opinions, therefor you are now qualified to tell us all what to do with our lives , money etc., because you know better.

If you want to know what irks freedom minded people its attitudes like yours Mr Bainsworth

Comment #11 by michael riley on 2014 01 24

I think automation will erode the value of labor to such an extent that a permanent unemployment rate in this country (world?) of 10-20-30% will be the norm.
Due to increasing efficiencies that automation and robots bring, there simply will not be enough jobs for everyone.

Even lowly retail jobs are going extinct.
30-50% of retail space is predicted to disappear in 10 years due to online shopping. What will all of those millions of people do? Retrain? for what?

The solution? Is there one?

Something to think about, for sure

Comment #12 by Odd Job on 2014 01 24

Odd Job
i first heard your theory posited regarding Cincinnati Millicron and robotics in the late 1970's Then with computers, parallel computing etc,...it never really happened, but for some nagging reason I think that theory has legs now and we should talk seriously about it

Comment #13 by michael riley on 2014 01 24

Bainsworth,
How elitist can you get running down Linda's Rhode College degree? And is there not a bit of profiling on your part? Linda may know far more than Chomsky on any number of issues. Just in case your mother never told you intellectual knowledge and wisdom/common sense are not the same. Chomsky might do well to stick to Linguistics. The fact that “he wrote over one hundred books who also holds numerous achievements and awards including forty honorary degrees on an international level from Harvard to Cambridge.” Is nice to know but absolutely has no bearing that what he says on a particular issue makes any sense at all. I would refer you to Tom Sowell who is equally accomplished He makes a lot of sense writing about liberals not because he has written many books of because he has received many honorary degrees. Here is something for you to think about. “The vision of the left is not just a vision of the world. For many, it is also a vision of themselves -- a very flattering vision of people trying to save the planet, rescue the exploited, create "social justice" and otherwise be on the side of the angels.”

Comment #14 by Michael Byrnes on 2014 01 24




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