(Editor’s Note: This is the seventh in a series of newsmaker interviews with business-community leaders focusing on the state budget and the economy.)
Edward J. Cooney serves in two roles that give him an acute grasp of the economy both locally and globally – he is chairman of the Greater Providence Chamber of Commerce board of directors and he serves as vice president and treasurer of Nortek Inc. And the outlook for the economy, both locally and nationally, Cooney said, isn’t particularly optimistic.
PBN: What is your view of the present state of the economy?
COONEY: I think that the [local and national economies] are both struggling as much as they have in 20 years. I think that what we’re seeing in Rhode Island is that consumer confidence is at a … low and pricing of assets is down significantly, particularly in the housing sector. The economy is in a difficult situation, and I’m not sure it’s hit bottom yet.
PBN: Are we in a recession?
COONEY: We’re [on the brink] of a recession. … You just have to look at the economic indicators and the earnings reports to know that we’re in a very difficult economic period. We have to be smart as leaders to make the right decisions so we can get the economy on track again.
PBN: What are the causes of this downturn?
COONEY: I think there’s a complicated set of data points that influence economic indicators. But I do think that the housing crisis and the subprime mortgage problems were a significant contributor. The high price of global commodities – oil, copper, aluminum, steel – has also put pressure on prices. The combination of the two of those has affected consumer confidence and had a direct impact on consumer spending. We need to stabilize the credit markets and the mortgage markets.
PBN: Is the state budget crisis affecting consumer confidence?
COONEY: It has. No matter who you talk to – at the grocery store, at the Little League field – they talk about the state budget deficit. It’s definitely part of folks’ thinking and that influence on people’s thinking has a negative impact on consumer confidence and consumer spending. … I think we’re in a critical moment, and I think that we will need to solve the state’s deficit not only for this year, but for future years. … But with every moment of crisis, it presents a time of a great opportunity.
PBN: What do you mean by opportunities?
COONEY: You hear about Rhode Island finishing 50 on this measure, and 49 out of 50 in others that are published, by say, the Tax Foundation … or CNBC. It’s a great opportunity for the leaders of our community – the General Assembly, the governor, labor and business – to get together, break down those indexes and figure out what actions we need to take to get from 50-out-of-50 to 35-out-of-50. Set goals, measure achievements against those goals and then people together can take credit and take pride in that progress.
PBN: Is that the long-term solution for the tough fiscal times in the state, making Rhode Island more business friendly?
COONEY: It’s part of the solution. I think there’s no one solution, no one group or one person that can solve it. And that’s why I think this is a critical moment. … The economic situation is not going to be solved with press conferences, it’s going to be solved with people working together in a collaborative method.
PBN: How is the state’s leadership faring on these issues?
COONEY: I’m encouraged by the leadership that the Speaker of the House [William J. Murphy] and [House Finance Committee Chairman Steven M. Costantino] and [Gov. Donald L. Carcieri] have shown. The General Assembly and the executive branch working together on a compromise on the historic tax credit was – whether you agree with it or not – was a good sign that they can come together with a solution for an issue. That has to continue throughout the next two and a half months. They certainly have a great challenge ahead of them, and the only way to get through it is by working together.
PBN: Where does the Chamber fit into this?
COONEY: We look at this from the view of economic development. We have actively said that we need more taxpayers, not more taxes. We look at ourselves on the revenue side – bad spending policies of the past have led to bad tax policies to fund them. That’s led to poor economic development. … For good economic development, you have to link them and solve the bad revenue policies and the bad spending policies. The General Assembly and the governor led the way two years ago by having flat tax legislation passed, which gradually reduces the flat tax from 9.9 percent down to 5 percent. That was a major initiative of the business community.
PBN: Any initiatives that the Chamber is actively pursuing to help the local fiscal climate?
COONEY: We’re working with the educational community and the medical systems – Care New England and Lifespan – to launch a knowledge-based economy project. We launched that about six months ago to try to leverage the intellectual capital that we have in the universities … and the hospitals into an economy. We also launched an initiative to identify the private sector’s role in economic development so that we can help sell Rhode Island and help in the effort and the process to bring businesses that are making decisions about where to locate. No one group has a stake in this. The private [sector] needs and wants to help the economic-development effort. •
interview
Edward J. Cooney
Position: Vice president and treasurer of Nortek Inc., chairman of the board of directors of the Greater Providence Chamber of Commerce.
Background: Before joining Nortek Inc., Cooney served as chief financial officer of Amtrol Inc. for 20 years. Cooney is a certified public account and also currently serves as president of the North Kingstown Town Council.
Education: B.A. in economics and accounting, College of the Holy Cross, 1969; M.A. in taxation, Bryant University, 1991
Residence: North Kingstown
Age: 60
