Big-pay protesting misses the point for needed reform

Contempt is a surprising response to receive when expressing concerns about the doubling of the six-figure salaries of public sector executives during a proclaimed hiring freeze amid a recession, with the state government facing annual structural deficits of hundreds of millions of dollars. But in certain circles (mine, for one), some folks consider it obvious that the R.I. Economic Development Corporation was justified in offering a contract worth three-quarters of a million dollars over three years – plus benefits, relocation reimbursements and a car – to attract Ioanna Morfessis as executive director.
Any capitalist and economic conservative will cede the point that an organization must be willing to spend sufficient money to attract the candidates with the greatest likelihood of being successful in their jobs. Critical positions with extensive responsibility on which organizational objectives will hinge demand substantial expense. However, dramatic increases in the cost of a position ought to indicate that a specific shortcoming has been identified that must be remedied. Otherwise, bringing on star-powered personnel merely indicates a form of vanity in the employer and a desire to present eye-popping pay as evidence of doing something.
Right-leaning reformers in Rhode Island should not allow an aversion to government spending to undermine well-considered investments, but a top-down strategy is emerging that reacts to symptoms in such a way as to hinder efforts to address the underlying cause. Thus far, the strategy has three components:
&#8226 Consolidate services across the state for both economies of scale and stronger leverage against special interests.
&#8226 Tinker with tax code gimmicks to give the impression that the state doesn’t subtract as much from the economy as it does and to target incentives for maximal benefit. &#8226 Hire-in change agents because too few have emerged locally.
The consistent theme, here, is centralization. The first step is to identify inefficiencies from a high perch and then reshuffle subsidiary administrations. In other words, figure out the whats and hows of the state’s economy and use the tax code to reshape behavior. This approach requires finding talented people who will investigate difficulties and instruct us on how to overcome them. But because it misidentifies the fundamental problem, centralization lunges in the wrong direction.
Contempt for those who have expressed doubts about the EDC’s new hire is an expression of frustration with a citizenry that either does not understand how the world works or is willfully opposed to change for one reason or another. The frustration is evidence: The citizenry – the bought and paid, the apathetic, the ideologically blinkered – is ultimately the problem, and changing its civic habits must be the focus of long-lasting reforms.
Every component of the top-down reformers’ strategy is antithetical to the cause of an engaged populace and an innovative marketplace. Consolidated government functions move decision-making farther from individual voters and diminish the authority of local officials, leaving a gap for those who might consider a transition into public service. Tax code gimmicks heighten the financial learning curve, rather than simplifying the back-office demands of business, and might actually increase the cost of opening a shop and keeping it going.
As for unprecedented big-dollar hires, as exemplified by Ms. Morfessis and Education Commissioner Deborah Gist, the risks are manifold. At the outset, one must take into account the demoralization of struggling residents as they watch a budget-busting government actually increase its high-end pay scales. Disregarding the impression caused by such news hardly alleviates apathy and cynicism, even as it erroneously declares the importance of saviors over foot soldiers. The longer-term concern is more practical: It is not as if Rhode Island is a smoothly functioning society that merely has an inexplicable blind spot when it comes to economic development. Rhode Island handles the fundamentals of governance poorly, so in order for appointed – that is, unelected – officials to succeed, they will have to usurp the authority of those who currently misuse it. This may take entrenched actors by surprise and push through a worthwhile reform or two, but the powerful forces that corrupt the state will simply refocus their efforts.
They will march toward the new beacon of power and find an unprecedented opportunity for dictation when they have stabilized their movement sufficiently to claim it. They will stop operating in the towns, where small bands of freshly active taxpayers have a fighting chance of opposing them, and they will focus on the centralized power struggles.
Maybe people are wrong-headed to be flustered by the dollar amounts of executive salaries, but they are wrong-headed Rhode Islanders. They are the population with whom we have to work. If we do not change their minds – if instead we consolidate power away from them – we face even more daunting challenges when the “corruptocrats” adjust themselves to deal with the new principles and structure of our government.
Worse still, the motivational arguments for the bottom-up reform that Rhode Island so desperately needs will be even more distant and abstract. &#8226

Justin Katz is administrator of AnchorRising.com, an independent media and conservative analysis blog.