Champagne weather; politics and state wealth

  This has generally been a beautiful summer in New England -- not too hot, not too cool and soothing breezes most days.

Of course, as the mutual fund companies are compelled to note in their marketing, past performance should not be taken as assurance of future success.

It's tough to think of weather that could be nicer than nice weather in this corner of the world.


The story this week about Rhode Island's unemployment rate, at 7.7 percent, now the third highest in the country, got me thinking about how little  effect state tax  and other policies may have on prosperity. Or rather, in some places, they may have effects that surprise ideologues.

For instance, Georgia,  Mississippi and, somewhat less so, Nevada have long had regressive taxes  --  disproportionately hitting the poor. They tend to be light on environmental and other regulations and to give lots of public money to companies promising to locate or expand there.

Mississippi now has the highest jobless rate in the nation, at 8 percent. Georgia is second, at 7.8 percent. Rhode Island is in third place, tied with Michigan and Nevada.

Rhode Island's median household income is ranked at 17th in the nation, Georgia's at 33th,  Michigan's 34th (post collapse of car industry), Nevada's at 27th and Mississippi's at 50th.

The governors of all the states listed except Rhode Island are conservative Republicans.

After a half century of huzzahs for the alleged prosperity-fueling effects of Sun Belt tax and regulatory policies, the states there remain at the bottom of the household-income pile. The richest states are in the Middle Atlantic and Northeast -- as they have long been. And they have high taxes and lots of regulations. But some of these states have clearer, simpler, better written regulations than others. Clarity and predictability of regulations seem to be quite important in encouraging businesses to expand.

Rhode Island lags  in wealth rankings for its region. It does that because  of its absurd smallness (which skews its numbers), slowness in moving to new industrial models, dense  and badly written regulations exacerbated by an excessive number of jurisdictions (39 cities and towns!)  that discourage business creation and expansion and corruption, or,  probably more, the perception of corruption .


Corruption is doing well in other states, too, including Connecticut and Massachusetts. It has, however, always seemed to me, from decades of observation, that Rhode Island had a disproportionately high number of  particularly petty grifters. But of course, there's no way to prove that. That the "colorful'' Vincent Cianci is considered a serious candidate for mayor of Providence may also suggest either a suicidal or a bread-and-circuses mentality in too much of the state's electorate.

Anyway, if the eastern third of Connecticut were a state, its jobless  rate and household income would look a lot like Rhode Island's.

But that Rhode Island is a "liberal'' state per  se doesn't seem to be a problem.  Other "liberal''  states in the region --- e.g., Massachusetts and Maryland --- do very well indeed.

 --- Robert Whitcomb