FRANK CAPRIO’S SELF-PROMOTING HYPERBOLE: After failing miserably at his run for the governorship in 2010, former general treasurer Frank Caprio is now trying to regain his old job and is again running for state treasurer. Unfortunately, in his attempt to burnish his own reputation he is trying to tarnish the record of our current general treasurer, Gina Raimondo, who will likely run for governor in 2014. Caprio falsely claims that during his tenure as treasurer, annual management fees for our pension fund portfolio was only $12 million per year and that now, under Raimondo, those fees have escalated to $50 million.
First, Caprio’s numbers are flat wrong. His direct fees were over $13 million for one year only and were $20 million and $28 million the previous two years. Raimondo’s direct fees are lower - $12.7 million last year and $15.1 million the year before.
But, most important, Caprio reported only direct fees during his tenure, choosing to hide the indirect fees he was paying. Raimondo, on the other hand, reports both direct and indirect fees, making Rhode Island one of only six states with such fee transparency. Of course, fees will be higher when all types of fees are reported!
Gina Raimondo has chosen to invest a small amount, about 15 percent, of our pension money in hedge funds with the remainder invested mostly in index funds. This diversification of fund investments is a smart thing to do since it keeps the fund from losing so much during a major market downturn. Sometimes, you have to spend money to make money or to protect money. Such decisions are tough for a treasurer who knows they will cost more in fees and will give fodder to politicians like Caprio who are eager to stretch the truth in order to feather their own reputations. We should all be proud of Raimondo for having the courage to make good investment decisions when she knows they will be met with the kind of blatantly self-serving hyperbole issued by Caprio. He should be ashamed of his deceitful bloviating!
OUR ARCHAIC POST-PROHIBITION LAWS: Carolyn Rafaelian, creator and owner of Alex and Ani Jewelry, and now owner of both Sakonet Vinyards and the fledgling chain of Teas and Javas restaruants, can’t sell her Sakonet wines in her Teas and Javas eateries. If she had a coffee plantation, there would be no problem with her selling her coffee in her cafes; but wine? No! All because of Rhode Island’s archaic laws that hail from the days following alcohol prohibition when the nation so feared “demon alcohol” and sought to control it by divesting manufacturers, distributors and retailers of any interest in each other.
Times have changed. People have changed. Business models have changed. It’s time for our legislature to also change with the times and rid our business environment of this outdated law that deprives companies of the full advantage of their products. To keep this law intact would be like telling General Motors that it cannot manufacture, distribute and sell Chevrolets, or telling a local orchard that it cannot grow, pick and sell apples.
R.I. SMALL BUSINESSES AND HEALTH INSURANCE: The Affordable Care Act, known more widely by its sobriquet “Obamacare,” was supposed to lower the cost of health care in America and ensure health insurance is available to the vast majority of Americans. According to the ten small businesses whose owners testified before Rhode Island’s health commissioner last week, health insurance for their employees is neither affordable nor assured. Because of the rapidly rising cost of health insurance, these small companies with fewer than 50 employees each are considering eliminating health insurance altogether; instead, they are considering providing small cash payments to their employees who will have to shop for their own health insurance. Even with the Obamacare-mandated health insurance exchanges, it is highly unlikely these employees will find an affordable policy that comes close to the coverage their employers now provide.
Many larger companies have indicated they will also drop employee health insurance and pay the Obamacare fines since it will be cheaper than maintaining their ever-more-costly health insurance plans. Further, few healthy young Americans will purchase health insurance on their own but will, instead, opt to pay the less expensive fines. Add to this the 18 states that, primarily because they can’t afford it, probably will not expand Medicaid as Obamacare mandates but the Supreme Court has said cannot be enforced, and it becomes more evident that the “Affordable Care Act” is really not affordable at all. Worse, that it may result in even fewer Americans covered by adequate health insurance.
SCHOOL VOUCHERS IN RHODE ISLAND? The problem with school voucher programs in most states that have them is that they discriminate against middle-class families. They are available only to families whose income puts them in the poverty range. If Rep. Elaine Corderre, Democrat of Pawtucket, gets her way, Rhode Island will lead the country with a voucher program that will make 65 percent of families eligible. Finally, there is someone who is thinking about our poor and middle-class students who suffer at low-performing schools but cannot afford private or parochial schools. Naysayers, such as teacher unions and school administrators long entrenched in a public school bureaucracy that has historically accepted low-quality education, say the program would drain precious financial resources from public schools. Of course it would! That’s the whole point; to make public schools compete for taxpayer dollars by improving their performance. If they can’t make the grade, they lose students and the public financing that goes with them. Good public schools will not only survive, they will thrive; while those public schools that are little more than holding pens, will be closed.
QUOTES OF THE WEEK: The U.S. Supreme Court’s 5-4 decision this week to allow police to take DNA swabs from anyone arrested (not convicted) for a “serious crime” registers our continued descent down the slope toward ceding all individual freedoms to government control in the name of safety and security. As civil libertarians decried, this decision opens a gaping hole in the Fourth Amendment. In his blistering dissent, Justice Antonin Scalia expressed his concern that opening this door will lead to pervasive DNA swabs throughout society, “Make no mistake about it. Because of today’s decision, your DNA can be taken and entered into a national database if you are ever arrested, rightly or wrongly, and for whatever reason. This will solve some extra crimes, to be sure, but so would taking your DNA when you fly on an airplane: Surely the TSA must know the ‘identity’ of the flying public. For that matter, so would taking your children’s DNA when they start public school.”
We seem increasingly willing to give up more and more of our individual rights and freedoms in the name of creating a safe and secure society. From allowing the government to secretly read our email and eavesdrop on our telephone conversations, to accepting the increased surveillance of more and more cameras and now drone surveillance of our activities, America is becoming the “Big Brother is Watching” society described in George Orwell’s novel 1984, the classic tale of big government running every aspect of citizen’s lives.
Though it may seem overused, Ben Franklin’s famous quote is more applicable now than it has ever been: “They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.”