The Many States of Oregon: Part II

A Three-Part Series: Part II

In September, Oregon Business Magazine hosted an 18-day, 2000-mile road tour around Oregon designed to promote business innovation and share best practices. Included in the tour were elected officials, civic leaders, directors of government agencies, small business owners, corporate executives and, just to make it interesting, the Cascade Policy Institute management team.

We met with researchers, entrepreneurs and politicians and had opportunities to question hundreds of hard-working Oregonians about important local issues, frequently over fabulous dinners served up with great Oregon wines and beers. Here is more of what we learned….

Most entrepreneurs don’t want help from the government; they just want to be left alone.

Business owners complained repeatedly about excess regulation and taxation. Most of them did not say it publicly, but when given the opportunity to let down their guard during social functions, they spoke strongly of the desire for less regulation.

The co-owner of a popular micro-brewery summed up the problem with one story. She explained that during the past session of the Oregon legislature, a bill was introduced to raise the beer tax. She said that she was forced to travel repeatedly to Salem, just to explain the basics of her business. It was evident to her that most legislators do not even understand how profit is created, and she felt extremely frustrated that she had to explain that the proposed tax would have put her entire industry out of business.

Although she was a self-proclaimed liberal Democrat, she said that this experience was so disillusioning to her that she was becoming much more attracted to the free-market policies of groups like Cascade. She summarized her feelings by saying, “Look, we’re not trying to get hand-outs from the government or any kind of special treatment; we just want to be left alone.”

Many business associations are undermining market principles by promoting state-sponsored “economic development” schemes.

At various points on the tour, we met quite a few people working in “public-private partnerships.” The mission of these groups was usually to target certain economic sectors for special treatment.

It’s bad enough when government bureaucrats do this, but it is especially harmful when business associations join in. Supporters of such schemes always think they have unique powers to determine which sectors of the economy are special, therefore deserving of tax breaks or cash subsidies. But no one has such powers, and these exercises inevitably allow the government to pick winners and losers. That is not a proper role of government and will cause a misallocation of capital that ultimately destroys wealth.

Stay tuned next Monday for Part III: Oregon badly needs to bring the state highway system into the 21st century….


Did you miss Part I? Read it here.


John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market think tank.

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Posted by at 06:00 | Posted in Measure 37 | 10 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Jerry

    Right on, right on! Get the stupid government off our backs. The tax on beer is just like the taxes on cigs or luxury yachts. They will decrease usage – regardless of what anyone says. And they are wrong.
    I am glad that left-wing lady had her eyes opened. The politicos in Salem have zero understanding of the free market and her experience proves it. They are people who could not get hired at a MacDonalds in most cases.
    Fools! Fools do you hear me??
    Less government, except in areas of defense and public saftey, is always a better thing. ALWAYS.

  • eagle eye

    “Most entrepreneurs don’t want help from the government; they just want to be left alone. … Many business associations are undermining market principles by promoting state-sponsored “economic development” schemes. ”

    Methinks businessman speak with forked tongue, or else hopelessly confused.

  • tom

    Chatting at a social event equals a careful study? One conversation? Sheesh.

  • CRAWDUDE

    I think the upcoming 3rd installment should be a fun discussion!

    • dean

      So…what “most entrpreneurs” want is determined by John Charles’ private conversations? Right. Most of my Greek relatives in Chicago told me in private they cheated on their taxes. So do most Greeks cheat on their taxes? Don’t answer that!

      The proposed beer tax would have put the entire micro brew industry out of business? Right. This statement is based on what analysis? And what is Oregon’s tax rate on beer compared with other states?

      Business associations are undermining “market principles?” I love that one. Since when are people in business to support abstract principles that may be important to “think tanks,” but not to actual businesses, which exist to make a profit?

      The breaking news from John: Public policies favor certain economic activities over others!

      But it has been that way forever and will remain so as long as we have governments that do something….anything. Roman aqueducts were good for owners fo stone quarries, Funding and building roads and bridges (Part III, should be very enlightening) is great for the auto and oil and tire and road construction and insurance industries. Funding war is great for Haliburton and Boeing. Funding food stamps is good for farmers. Should we cease all publicly funded programs because someone might be able to make a profit on them? no more bike lanes because bicycle shops get an advantage! No more firefighting because hose manufacturers gain an advantage!

      Could a “free market” actually exist in the absence of an organized government? There must be a theory somewhere on that.

      • John Fairplay

        You left out the one group that benefits from all government actions – government employee unions. That is the chief reason we need not worry about any free market policies being implemented to get Oregon out of its economic morass.

  • rural resident

    A few years ago, the National Federation for Independent Business (about as “pro” a small business group as there is) did a study about small business’s attitudes toward government. Respondents generally favored a “free market.” However, when asked open-ended questions about the role of government, a large percentage wanted government to “provide funding for …,” “enforce laws regarding,” “create new programs for …,” and so on. In other words, they favor the abstract concept of “less government,” but aren’t always very consistent about how that should happen in the real business world.

    What business owners and managers often want is little regulation of their own activities, provision of social and physical infrastructure at little cost to businenss, low/no taxes, and control over/regulation of competitors. That’s not illogical. It’s Nirvana. However, it makes one skeptical about the degree to which entrepreneurs really want an uncontrolled free market. (I seem to remember many “entrepreneurs” who were only too happy to see Microsoft shackled a few years ago, and who continue to advocate for such.)

    That said, there are certainly places where a little less government involvement would produce better economic results. Oregon’s land use system is at the top of that list. It’s one thing to establish a set of rules by which businesses participate in the market economy. It’s something else to make it all but impossible for them to get into the game in the first place.

    • eagle eye

      Very good post. I get very tired of the whining by Oregon’s supposedly independent business types about taxes, when I don’t hear that constant refrain elsewhere, especially considering that Oregon’s business taxes are way on the low side, as far as I can tell. It seems that what they want is good government services paid for by anyone but themselves. But you said that already, and better.

      I’m more sympathetic to the complaints about regulation, though to be sure, there seems to be little in the way of concrete changes that the Oregon business community proposes in the electoral process. What exactly is holding them back? I wish they’d say and then have the nads to speak up and try to do something about it. Instead they seem to leave it to the Sizemores and the hapless Republican politicians, who then go out and get slaughtered, leaving the field to the Democrats (who then, to be fair, are partly constrained by the referendum/initiative system).

  • Jerry

    Beer, beer
    we want our cheer
    no tax please
    we must drink with ease.

    Beer, beer
    we must have it clear
    without a tax
    so we can relax.

    Beer, beer
    keep it running free
    Beer, beer
    no tax on me!

  • CRAWDUDE

    I predict a tax revolt, people will dress up as indians, steal beer from the state sanctioned liquor stores and poor it into the Willamette. It’ll from hence forth be known as the “Portland Beer Fest”, there will be anarchy in the streets, dogs having sex with cats……..oh, the humanity!

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