EDITORIAL: Two Crises? Yes, But It’s the Economy, Stupid

EDITORIAL: Two Crises? Yes, But It’s the Economy, Stupid

There are two major crises facing Rhode Island — a pandemic and an economic depression.

Functionally, other than maybe a few researchers tied to Brown University’s Warren Alpert Medical School and some folks at CVS, Rhode Island has little to do with developing solutions to the coronavirus.

We know what we have to do to protect one another - some may not like it, but the reality is 100,000 Americans have died - nearly all in just three months.

GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST

It just takes basic steps to help minimize the spread of the virus from a public health standpoint - wear a mask, social distance, and follow some simple rules.

Rhode Island does need to immediately address its economic meltdown, however. 

Let’s stop parsing words - the world, the United States and Rhode Island are in a depression, and swift action needs to be taken to minimize the long-term damage.

As GoLocal reported last week, 42% of those who have lost their jobs will not be rehired, according to a University of Chicago study.

“Drawing on our survey evidence and historical evidence of how layoffs relate to recalls, we estimate that 42 percent of recent pandemic-induced layoffs will result in permanent job loss. If the pandemic and partial economic shutdown linger for many months, or if pandemics with serious health consequences and high mortality rates become a recurring phenomenon, there will be profound, long-term consequences for the reallocation of jobs, workers and capital across firms and locations,” wrote the authors.

It really does not matter if it is 30% that are not going back to their jobs or 50% — in either case, Rhode Island is facing long-term double-digit unemployment.

Neither the Raimondo administration, legislative leaders, or the Congressional delegation have offered ideas for job creation or improving Rhode Island's competitiveness. On Friday, Governor Gina Raimondo said yet again, “I take things week to week.”

A phrase she has stated week after week.

Now, three months into the economic meltdown the state is facing nearly a $900 million deficit, unemployment is "officially" at 17%, but national experts believe national unemployment which is now at officially 14% is actually at 25% — we can only guestimate what is Rhode Island’s reality — 30% or 40%.

We are a state that is known for being first into recessions and last out of them.

As URI economist Len Lardaro recently wrote, "Sadly, I don’t expect Rhode Island’s economy to return to where it was …for two to five years. We are FILO, and we dodged the FI (first in) this time, but we are condemned to living through the LO (last out). My wildest wish is to see our state’s government become as transparent in describing our state’s economic performance as it has been in discussing the progress of the pandemic.”

If we wait for the federal government to rescue us — good luck with that. We need a plan to significantly change our economy, not an influx of money thrown at a broken system.  

Want some ideas of what we need to do — READ HERE. Got better ideas? Email them here.

But, let’s do something, because it's the economy, stupid.