SOME PEOPLE see only disaster in Rhode Island’s coming budgetary and economic meltdown. Stephen Laffey sees opportunity.

The former Cranston mayor and failed U.S. Senate candidate enjoys nothing better than a crisis to manage. And that may actually work for him politically.

The ambitious, egocentric, opinionated — and, to be sure, sometimes amazingly tone-deaf — Mr. Laffey seems to turn off almost as many people as he turns on. But, given Rhode Island’s problems, that may not be all that bad for him. History amply demonstrates that when voters are facing a crisis, they will put up with divisive, outspoken, pig-headed characters whom they would not endure when the going is good. (Rudy Giuliani, Winston Churchill and former Rhode Island Gov. Bruce Sundlun spring to mind.)

Rhode Island is clearly sailing into a very scary storm. While other states flourish in this economy — running huge budget surpluses — the Ocean State faces escalating deficits, thanks to some weak leadership by Governor Carcieri and a legislature that is virtually enslaved to special interests. While other states are booming, Rhode Island is losing thousands of its productive citizens to places with far less punishing taxes and better schools and roads. Well-to-do elderly Rhode Islanders take their tax dollars to Florida and New Hampshire. Meanwhile, dependent people move in for our welfare benefits.

Mr. Laffey calls it a “death spiral.” As someone who grew up in Rhode Island, went off to Harvard Business School and the investment industry to make his fortune, and then returned to rescue Cranston from a financial catastrophe, he clearly would like nothing better than to dig in as governor, and reverse the cycle.

For now, he is coy about running in 2010. But he is only too happy to talk about what is wrong, and what should be done about it, as he did with me last Thursday over breakfast at Spoonem’s, in Cranston. And he is not shy about criticizing his fellow Republican, the sitting governor, whom he voted for twice.

Mr. Laffey contends that Mr. Carcieri lost the moral authority to speak out against the crisis when he submitted a budget this year that promised massive future deficits and used one-time gimmicks to plug gaps. The governor also inexplicably kept telling Rhode Islanders that the state was headed in the right direction.

“There is not a crisis mindset in the state because the guy at the top says things are going good,” Mr. Laffey said. “Things are not going good.”

His evidence?

Rhode Island continues to spend wildly beyond its means. State spending and local property taxes are rising at rates much faster than taxpayers’ incomes. The cost of pensions and health care is exploding. Public schools in urban communities are badly failing poor students, while powerful teachers unions oppose parental choice. The state’s bridges and roads are poorly maintained. Political corruption haunts the state. Taxpaying citizens are fleeing, putting a grave strain on state revenues. Social-welfare advocates seem interested only in expanding dependency, rather than truly helping the needy better their lives. And, during a period when the Dow Jones Industrial Average has nearly doubled in five years, Rhode Island is stagnant.

“We are not a place where anyone would consider right now starting and growing a business,” Mr. Laffey said.

Given the state’s severe budget problems, time is running out. “The question is, when is the tipping point?” he said. “I think we’re within 12 months or 24 months of all hell breaking loose.”

Is it too late for Rhode Island to change?

Oh no, Mr. Laffey argues, and he touts policy prescriptions at breakneck speed while he tries to get some oatmeal into his mouth. Public-employee unions have to be brought around to face the real world. They will do so, if they think they are being treated fairly by someone who does his homework, and won’t back down. The state government must become much more efficient, and much more oriented toward serving the common good. Business leaders would flock to this beautiful state if taxes were competitive, government was honest and public services were strong.

Rhode Island is small enough that its citizens could rally behind change. But change will not happen, Laffey said, without a leader who wants to shake everything up, knows how to run complex organizations and fix financial problems, and does not care how much he is hated by interest groups as a result. His political heroes are Theodore Roosevelt, Harry Truman and Ronald Reagan — stubborn chief executives who knew what they wanted and did not hesitate to tread heavily on toes.

If Mr. Laffey is chastened by his loss in the Republican Senate primary last year, he isn’t showing it. His name recognition exploded, he built a statewide organization, and he got a chance to hear out Rhode Islanders. He seemingly cannot wait to debate policy with any of the likely Democratic gubernatorial candidates: Frank Caprio, David Cicilline, Patrick Lynch or Elizabeth Roberts.

If Mr. Laffey is right — if voters in 2010 will want a strident crisis manager rather than a party hack or a more cautious and pleasant politician — the state could be in for some very interesting times.

Edward Achorn is The Journal’s deputy editorial-pages editor ( eachorn@projo.com).