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Travis Rowley: Don’t Blame Schilling

Saturday, May 26, 2012

 

Amidst all the controversy surrounding 38 Studios, there has been a lot of hostility aimed at the company’s founder and chairman, Curt Schilling. Hardly alone, the Providence Phoenix’s Philippe & Jorge column mocked Schilling this week as a “clueless chump,” and lambasted him for “exploiting” the State of Rhode Island with his “scheme.”

But perhaps the last person to direct frustration toward is Mr. Schilling. After all, what did Schilling do, other than chase down money that he discovered was legally available?

Be upset all you want with Schilling for failing as an entrepreneur. But isn’t that the fate of most start-up companies? And isn’t it just too easy to cast most business ventures as “schemes?”

Most importantly, wasn’t there a familiar case being proposed by Schilling and his backers (Democrats and Republicans), that the $75 million loan guarantee would benefit Rhode Island as a whole? The deal with 38 Studios was supposed to attract more “tech” companies to Rhode Island. It was supposed to create hundreds of specialized private sector jobs.

Nobody should recognize this validation of a planned economy, wealth redistribution, and corporate welfare more than the citizens of Rhode Island, where every dime sought from the public treasury is justified with promises and predictions of economic advantage.

The reasoning behind Schilling’s special deal was identical to every tax loophole offered to a number of corporations in exchange for their relocation to Rhode Island – where the standard corporate tax rate is among the highest in the country (9%).

To justify redistributive welfare policies, progressives point to how necessary it is to “increase the purchasing power of the middle class,” because this “creates demand” for goods and services provided by the business sector. You heard that correctly. Progressives find it wise to take money from business owners in order to give money to their customers, so they can then go to their stores and buy stuff.

Progressives have long argued that “for every dollar a person receives in food stamps…$1.79 is put back into the economy” (CNN.com). Defending the extension of unemployment payments, former House Speaker Nancy Pelosi made a similar contention: “It injects demand into the economy…It creates jobs faster than almost any other initiative you can name.”

Progressives maintain that redistributing people’s money into urban school districts and the neighborhoods of illegal immigrants is also an economic boon. Failing to subsidize these communities, they claim, will eventually result in higher costs for the state. Last year a URI professor reconciled the case for granting in-state college tuition to illegal aliens by claiming that young illegals would otherwise adopt a criminal lifestyle.

Along the same line of validating high government expenditures, public union leaders have argued that sustaining a large government workforce serves to strengthen and expand the middle class. And salvaging their unsustainable pension systems will prevent government retirees from requiring government assistance years down the road.

Attempting to justify Governor Chafee’s proposed tax increases in 2011, Chafee’s budget director Thomas Mullaney said, “The people who we might be taking [money] from,…they might be saving that money, and not spending it. You know, pretty much all the money we collect, you know, we pretty much spend.” And that’s good for the economy as a whole.

No doubt about it, this is the most consistent progressive position: Give us your money. It’ll be good for you.

Moreover, this all represents the philosophical hypocrisy of all left-wing socialists: They’re all chasing down capital.

So what, exactly, did Curt Schilling do that was so out of the ordinary? $75 million is pennies compared to the economic destruction wreaked by the Rhode Island Left with their decades of central planning that’s been hatched from within the State House.

In fairness, writers at the Providence Phoenix asked the appropriate question this week: “It makes you wonder who is really to blame: Schilling for exploiting a rube investor when he spotted one or Rhode Island for playing the clueless chump and buying into his scheme.”

But the answer, of course, is the “rube investor” – the State of Rhode Island. After all, capitalists search for capital. That’s what they do.

At fault is the government that forgot that its purpose isn’t to cater to the capitalist, but only to preserve the natural rights of its citizens, and to establish an economic scenario where businesses can compete with one another.

In regards to the 38 Studios fiasco, URI economist Leonard Lardaro noted last week on Channel 10 News Conference, “That’s the mentality. Because we don’t have a competitive tax and cost structure – and everyone knows it except for our leaders – then you have to make something happen, and so we try for these big projects…[We] go for the homerun…You’ve got to really hit a lot of singles and doubles, and forget the homeruns.”

Industries come and go. Rhode Island politicians need to stop crying over the loss of the state’s “manufacturing base,” and establish a business climate where any industry can thrive – a place where economic recessions and company closings are more easily absorbed.

But this can only happen once government officials rediscover their proper role.

At fault is a government that designed a business climate so dismal and hopeless, that attracting companies to move to Rhode Island is like trying to get a bunch of cats to meet you in the swimming pool.

At fault is the government that established this dreadful business environment, where there will always exist a desperate temptation to discover the next economic gimmick – whether it be a casino, “tech companies,” more federal aid, or some sort of “knowledge district.”

At fault is a government that hasn’t the discipline to curb its own power and influence; a government that fails to trust the collective wisdom of the private sector; a government that refuses to allow the citizens to be their own “economic development corporation;” a government without the nerve to say “No” to the professional liberal activists that dwell within the State House. Or, better yet, a government without the nerve to pass a constitutional amendment that would legally bind itself from making such deals in the future.

Travis Rowley (TravisRowley.com) is chairman of the RI Young Republicans and the author of The RI Republican: An Indictment of the Rhode Island Left.

 

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