Governor McKee continues the failed economic policies that ruined us
Governor McKee, like Governor Gina Raimondo before him, continues to flog the dead horse of trickle-down economics not because it works, but because it benefits key members of the donor class that support their careers.
About 40% of the first $113m Governor Daniel McKee wants to spend of the $1.1b in American Rescue Plan Act (ARPA) funds would be going to “helping small businesses” wrote Andy Boardman in his analysis of the Governors spending proposal. If that rate were to apply to the entirety of ARPA funds, the amount of money given away to corporate and business interests would be well over $452m.
But this figure is deceptive. Much of the money Governor McKee has allocated to areas like housing, childcare and broadband also largely favor business interests. Much of the money to increase the number of childcare providers, much needed in our state, would be money going to the owners of existing childcare facilities to grow their businesses. Money to expand broadband would go mostly to the two largest Internet providers in our state, Verizon and Cox. And insider developers and building construction companies stand to gain the most from whatever money Rhode Island invests in housing.
It’s impossible to estimate how much of the ARPA funds will go to the people who need it most. But you can rest assured the vast majority will be going to business interests with the hope that maybe some of that will “trickle down” and expand our economy among the poorest.
But massive government bail-outs for businesses is only one part of Governor McKee’s economic strategy. Last Wednesday, the Governor made two offhand comments about cutting taxes for the rich.
The first was at a press opportunity at the Dunkin’ Donuts Center, where Governor McKee teamed up with Gene Valicenti, radio and TV personality, and John Hazan White, CEO of Taco Comfort Solutions, to give out lottery tickets to people getting vaccinated. Hazan White was asked by Coalition reporter Pat Ford about his stance on estate taxes. Hazan White had once remarked that, “People like me can’t afford to die in RI.”
In response to Ford’s query, Hazan White responded, “My biggest issue in the state is the estate tax. That is something that, [if it] were to be brought way down or eliminated, would probably change this state dramatically.”
Seeming eager to please Hazan White, Governor McKee interjected, “We’re running the numbers on that now.”
Realize: No living person has ever paid the estate tax. It is literally a tax on dead millionaires. See: Tax cuts for the rich, even if they’re dead, is a somehow a non-partisan issue and this Twitter thread.
Later that same day, during the Governor’s biweekly press availability, McKee went off on a tangent about the interest that businesses pay when they are late with tax payments.
“They get charged 18% interest on that late payment and another 14% penalty on that late payment,” said Governor McKee. “We can’t be a state that is dealing [in] usury rates and then expect that our business community is going to feel as though it’s a friendly business environment…
“This is the point [we’re trying to make] with the General Assembly,” continued Governor McKee. “Let’s not be slow on rolling some of these recovery dollars back into the economy in a way that makes sense. Back into [the] housing that we asked for [and] childcare. We can prevent many companies right now, small businesses, from either failing or rolling into a spot where they’re paying usury rates in penalties.”
Note that McKee sees investments in housing and childcare as investments in businesses.
UpriseRI interjected that 30% interest rates are common in the payday loan industry, which is protected by General Assembly leadership from any attempts at reform. Rhode Island remains the only New England state that allows payday loan companies to charge the kind of 30% interest rates that McKee calls usurious.
“Yeah, I’m on board with that too,” responded Governor McKee. “That should be gone.” Gone as an afterthought, not as a policy in and of itself.
The United States and Rhode Island have been reeling from over 40 years of some form of long disproven, supply-side economics, trickle-down economics, or Reaganomics. The various economic policies we pursue as a state have been disastrous for the poor and economically vulnerable, and have contributed the the success of people like John Hazan White, who has hubristically declared himself too rich to die.
My guess is thatGovernor McKee, like Governor Gina Raimondo before him, continues to flog the dead horse of trickle-down economics not because it works for all Rhode Islanders (we know it decidedly does not), but because it benefits the key members of the donor class that support their careers.
It’s time for new ideas.