Economic Recovery in Oregon

There was an article in last week’s Oregonian citing a report by IHS Global Insight which warned that Oregon must wait until 2013 before returning to pre-recession peak employment. Unfortunately that prediction is just whistling in the dark

First, it appears that the IHS Global Insight report looks at total jobs rather than only private sector jobs. The reason that is important is that private sector jobs represent increases in real economic growth while growth in government sector jobs represents increases in economic burdens on the economy.

For instance, total private sector employment peaked in December of 2007 at 1,445,100. At that point total (private plus public) employment stood at 1,739,000. At its nadir in December of 2009, private sector employment declined to 1,293,100 – a loss of 152,00 private sector jobs. During that same period of time total employment only dropped by 147,900. In other words while productive private sector jobs were declining, non-productive jobs (government) were increasing.

Despite the fervent belief of Oregon’s Democrats, economic recovery will not occur through a growth in government. But that lesson has yet to settle in with Oregon’s Democrat ruling class. For instance, the modest growth of 1,300 jobs in May was represented by 600 government jobs and only 700 private sector jobs. Even at that, Oregon’s critical growth sector – Construction and Manufacturing – lost 600 and 1000 jobs respectively.

Second, the IHS Global Insight report ignores recent history. During the last recession, Oregon’s private sector lost 64,100 jobs between peak employment in November of 2000 and April of 2003. From that point it took twenty-five months to recover those lost private sector jobs. That represents a recovery run rate of about 2,564 jobs per month. At that rate, recovery of the 152,000 private sector jobs will require fifty-nine months or until near the end of 2014. However, given that the last three months have only produced a growth of 2,700 private sector jobs (900 per month), it is more likely that the recovery period will be much longer – maybe as long as twelve years.

And third, the IHS Global Insight report ignores the fact that Oregon’s population continues to grow. More importantly, the available work force continues to grow. According to the United States Bureau of Labor Statistics, 32,000 new workers entered the job market in Oregon from October of 2009 to October of 2010 – an average of about 2,700 workers per month. That means, in addition to the 2,564 private sector jobs that must be produced to keep pace with the previous recovery period, another 2,700 jobs must be produced each month just to keep pace with the workforce availability increases.

The Portland business community at its annual business summit urged newly elected governor John Kitzhaber to adopt their “aggressive plan” to add 25,000 jobs per year for the next ten years or slightly over 2000 jobs per month. That self-described aggressive plan falls short of absorbing the new job entrants let alone recovering any of the jobs lost during the Kulongoski administration.

And finally, the government class continues to be fixated on Oregon’s jobless claims numbers; viewing any decline in those numbers as a sign of eminent economic recovery. Unfortunately, unemployment numbers simply reflect those receiving benefits, not those actually unemployed (or underemployed). There are a whole variety of reasons that a person who is unemployed may not be receiving benefits. He may have exhausted his benefits; he may have been self-employed and his business went under, or he has simply given up looking. To prove the point, let’s look at May’s unemployment report and the corresponding jobs report. In May, Oregon’s unemployment declined from 9.5% to 9.3% (far in excess of the level promised by President Obama and his Democrat colleagues). In terms of actual claims, that means the numbers dropped from 190,557 receiving benefits in April to 185,540 receiving benefits in May – a decline of 5,017. Yet, there were only 1,300 jobs created during that same period. Thirty-seven hundred claimants disappeared – not because they found employment but for any variety of other reasons they no longer receive benefits.

Democrats like unemployment numbers because they reflect how many people are dependent on government. They eschew private sector employment numbers because they represent real growth and independence.

The legislature is close to ending its session. The best that can be said is that they did not make Oregon materially worse for those who would start, grow or retain a business here. But the legislature did not address the primary barriers to long term economic growth. Just as a reminder, the legislature should reduce the capital gains tax, eliminate the inheritance tax on family owned businesses, roll back the taxes on individuals and businesses found in Measures 66 and 67, and reduce the growing burden of public employee union pension and healthcare benefits so as to redirect those funds to education and improved transportation (not light rail – real improved transportation).

Dealing with those issues would send a strong signal to the national business community that Oregon is serious about economic recovery. Continuing to ignore them while handwringing over where there is enough money to fund a bloated government sends a strong signal that Oregon is intent on business as usual.

Which way do you think Oregon will go?

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Posted by at 05:00 | Posted in Economy, Oregon Government, Public Employee Unions, State Taxes, Uncategorized, Unemployment | 36 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Rupert in Springfield

    Last weekend I drove by a house under construction. I turned my head and looked before catching myself in the realization that what once was commonplace is now such a rarity it catches attention. The very idea that Oregon will be back to pre recession levels in a couple of years is utter nonsense. If you have kids in school, with the weekly three day weekends you know this. Oregon is in decline and, given our leaderships steadfast commitment to maintaining a course straight over a cliff, I wouldn’t look for it to change anytime soon. The war on prosperity continues.

    • valley person

      Yes, if only we could get back to the good old days of George Bush. When the economy was just humming along and we were all fat and happy, building more houses than were needed at prices that were unaffordable. Those were the days.

      Grow up and stop whining you guys. The US economy has been stagnant for 90% of the population since the mid 1970s. Its no longer a temporary problem, but a condition we have to learn to live with. The Republicans have proven they have no solution to this other than to make the rich even richer, and the Democrats have proven they also lack any solution other than easing the pain a bit.

      Cutting taxes has not led to higher growth. We ran that experiment and it failed. Raising taxes on the few left who have extra money can put a floor under misery, but can’t make an advanced economy grow. Meanwhile we keep freeing up trade and mechanizing production, putting more people out of high paying jobs than we have any chance of replacing.

      The economic future of the US for most people is in services, not manufacturing. Government provides a lot of services. If you measure success as there being fewer government jobs, you will accelerate the trend towards fewer and fewer jobs at lower and lower wages. 

      • Steve Buckstein

        “Government provides a lot of services.

        Are you saying that if government didn’t provide some services that they wouldn’t be provided at all?

        Your perspective reminds me of Frederic Bastiat’s famous statement:

        “Government is the great fiction, through which everybody endeavors to live at the expense of everybody else.”

        • valley person

          No. Some services provided by the public are also provided in part by the private sector. We have private schools alongside public ones. There are also private security companies that supplement or fill gaps that public police don’t cover, Heck, we even have private armies (Blackwater) that help fight wars or protect diplomats for a pretty steep price.  But whether we pay the private sector to provide a particular service or choose to provide the service with public employees, its still a service and still has to be paid for somehow.

          I don’t imagine you or Larry thinks we should close down public schools and get rid of cops and so forth right? Which takes us back to the question at hand. We have a mostly service economy (about 70% of total employment). This economy includes a lot of services delivered directly or indirectly by the public sector, prepaid through taxes, and employs a lot of middle class people. Is laying those people off a sign of economic progress to either of you?

          • Steve Buckstein

            Quickly, public schools crowd out private schools in that, as you put it, they are “prepaid through taxes” while the private schools have to charge willing customers.

            The failure of the public sector to adequately protect many people has led to more private sector security employees than exist in the public sector today in America. The private sector employees are not “prepaid”; they have to earn their pay through actually delivering the services they promise.

            Laying off public sector employees isn’t the issue here; it’s whether those services can be better provided in the public or private sector. It may be the same people providing the services, they would simply get paid by people voluntarily rather than through “prepaid taxes.” 

          • valley person

            We disagree. The issue as expressed in Larry’s post is his claim that there is some sort of direct correlation between the number of “unproductive” public sector workers and the number of “productive” private sector workers, and that this is an inversely proportional relationship. And that we would be better off economically with fewer public sector workers, period. I think this is nonsense.

            Here is what Larry posed: “The reason that is important is that private sector jobs represent
            increases in real economic growth while growth in government sector jobs
            represents increases in economic burdens on the economy.

            What is “produced” by most public sector workers are services. The types of services mostly provided by the public sector: education, security, property protection, safe drinking water, safe(er) food, can all be replicated to some extent by the private sector. But quality issues aside, what is the practical difference in whether these services are provided by public employees or private employees? Exchanging 10 public cops for  10 private cops, or 10 public teachers for 10 private ones, buys nothing. We are paying for the same services either way. So laying off 10 public school teachers, if the result is a hiring of 10 private school teachers, is a net zero economically. You can’t with a straight face way the private cops or teachers represent real economic growth when the public sector workers only represented a burden. Its completely illogical since they are doing the exact same thing, providing a service.

            Take your libertarian blinders off just for a minute and think about that. Service = service.

          • Steve Buckstein

            You’re right, we do disagree. Public and private sector workers don’t do “the exact same thing” in most cases.  Incentives matter. Voluntary versus coercive funding of their jobs matters. I hope you can take whatever blinders you wear off long enough to see the differences.

          • valley dude

            Well, I’ve worked in both the public and private sector. I see pros and cons of each. I think that over decades and centuries  our imperfect democratic society has concluded that some services are best delivered by the public sector through taxes, supplemented by private sector services that fill gaps or offer a different product (i.e. private colleges, bank security guards, package delivery). In other cases we have primarily private sector services supplemented by the public sector that fills gaps, like in transportation and health care.

            I think in both cases service workers are doing productive work. You can argue that private sector workers are inherently more productive, or at least cheaper, and you may have a case. But the argument that public sector service providers are by definition “economic burdens” is not defensible with respect to the field of economics. They deliver a service, and they get paid for their time.

            On voluntary versus coercive funding,  again, with respect to economics it makes no difference. If i tax you to help pay for police services that you receive, the police service is productive. You may have preferred to spend your money on something else. You get to vote for someone who thinks like you do.  

          • Rupert in Springfield

            >Take your libertarian blinders off just for a minute and think about that. Service = service.

            And this is what gets liberal into trouble. Service is not service and this is quite easy to prove.

            Service by a government worker is a net drain when compared to the private sector worker all things being equal.

            How can we prove this? Very simply. No society, in which all are employed by the government, has or could, ever survive economically.

            Could a society with only private workers survive?

            Of course. Such societies can and have survived.

            IDIOT ALERT – IDIOT ALERT – IDIOT ALERT – IDIOT ALERT

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNNECESSARY

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNNECESSARY

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNNECESSARY

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNNECESSARY

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNNECESSARY

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNDESIRABLE

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNDESIRABLE

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNDESIRABLE

            THIS DOES NOT MEAN THAT GOVERNMENT IS UNDESIRABLE

            END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT

            So in that regard government workers are a net drain, at some point private sector workers have to pay taxes to support those in the government sector. The reverse is not true, a private sector economy is perfectly capable of surviving without extracting wealth from government.

            IDIOT ALERT – IDIOT ALERT – IDIOT ALERT – IDIOT ALERT

            THIS DOES NOT MEAN GOVERNMENT IS NOT NECESSARY

            THIS DOES NOT MEAN GOVERNMENT IS NOT NECESSARY

            THIS DOES NOT MEAN GOVERNMENT IS NOT NECESSARY

            THIS DOES NOT MEAN GOVERNMENT IS NOT NECESSARY

            THIS DOES NOT MEAN GOVERNMENT IS NOT NECESSARY

            THIS DOES NOT MEAN GOVERNMENT IS NOT NECESSARY

            END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT

            Government is necessary, and in fact desirable. Police, the military etc. are desirable things and make life more pleasant. However the point is, the private sector is necissary for government to survive economically. For the private sector to survive, and I am talking strictly economically here, government is not necessary. It may be desirable, and may result in a stronger economy, but it is not an essential ingredient.

            IDIOT ALERT – IDIOT ALERT – IDIOT ALERT – IDIOT ALERT

            UNDERSTAND THE DIFFERENCE BETWEEN THE WORDS DESIRABLE, ESSENTIAL AND “STRICTLY ECONOMICALLY” BEFORE COMMENTING. 

            UNDERSTAND THE DIFFERENCE BETWEEN THE WORDS DESIRABLE, ESSENTIAL AND “STRICTLY ECONOMICALLY” BEFORE COMMENTING.

            UNDERSTAND THE DIFFERENCE BETWEEN THE WORDS DESIRABLE, ESSENTIAL AND “STRICTLY ECONOMICALLY” BEFORE COMMENTING.

            UNDERSTAND THE DIFFERENCE BETWEEN THE WORDS DESIRABLE, ESSENTIAL AND “STRICTLY ECONOMICALLY” BEFORE COMMENTING.

            UNDERSTAND THE DIFFERENCE BETWEEN THE WORDS DESIRABLE, ESSENTIAL AND “STRICTLY ECONOMICALLY” BEFORE COMMENTING.

            UNDERSTAND THE DIFFERENCE BETWEEN THE WORDS DESIRABLE, ESSENTIAL AND “STRICTLY ECONOMICALLY” BEFORE COMMENTING.

            END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT

          • valley dude

            “Service is not service and this is quite easy to prove.”

            Really? Its kind of like saying water is not wet if you think about it.

            “Service by a government worker is a net drain when compared to the private sector worker all things being equal. ”

            In the example I gave, all things were considered equal. 10 public cops or 10 private cops, what the difference? Why is the first a drain and the other a productive part of the economy? Just because one was paid for through taxation and the other through private choice?

            “Could a society with only private workers survive?

            Of course. Such societies can and have survived.”

            So help me out here. You just asked and answered your own question. A society can be organized as 100% government workers and can “survive” for quite some period of time, though history shows its not the most efficient way to deliver goods and services. Nevertheless it is productive.

            “The reverse is not true, a private sector economy is perfectly capable of surviving without extracting wealth from government. ”

            Fine. Then there must be an example out there of a private sector economy that has survived without extracting any wealth, meaning goods or services, from government. Please tell me what this society is because I haven’t heard of it. In the world I live in, the private sector extracts goods and services from the public sector. It happens every day on too many levels to even count.

            By the way, I like the way you frame your argument so you can have it both ways. On the one hand, you state flat out that government is not essential, but earlier you state that it is necessary. Huh? Webster says they mean the same thing. So how can government be NECESSARY, but not ESSENTIAL?

            And try to not repeat yourself.
            And try to not repeat yourself.

          • 3H

            The reverse is not true, a private sector economy is perfectly capable of surviving without extracting wealth from government.
            Perhaps not wealth, but they do need, and extract, services from the government.  And without those services, the private sector economy cannot exist: Courts, roads, sewers to name three that I can think of.  In fact, historically speaking, the private sector economy has thrived and been dependent upon the transfer of wealth from the taxpayer to the government for the services the government can provide for the benefit of the private sector economy.

            Unless you want to reduce a society to a state of near barbarism where the poor are held in thrall to the rich.  

          • LC

            “In the example I gave, all things were considered equal. 10 public cops or 10 private cops, what the difference? Why is the first a drain and the other a productive part of the economy? Just because one was paid for through taxation and the other through private choice?”
            What you are failing to take into account is whether the value of the work of one versus the other is equal, and it has been shown that private sector employees are more productive than their public counterparts (https://www.cato.org/pubs/journal/cj30n1/cj30n1-5.pdf). Much of this lies in the fact that they face competition that their counterpart doesn’t and thus strives to run their business as efficiently as possible to turn a profit. 

            A perfect example would be the US Post Office. In mail categories that allow FedEx and UPS to compete with it, the USPS comes in dead last at a 16% market share. If the government would rid them of their monopoly over sending letters, who knows how much cheaper our mail would be. 

          • valley dude

            Whether public sector employees are more efficient than private counterparts or the other way around isn’t relevant to my point that both are providing services within the economy, thus both are contributing to it. The postal service may come in last on packages, but 16% of all packages sent is still a lot of packages being delivered for somebody on a fee for service basis. 

            Most government workers are service deliverers, hence they are contributors to the economy, not a drain.

          • 3H

            Could a society with only private workers survive?

            Of course. Such societies can and have survived.
            Which societies are you thinking of?  

          • 3H

            If, by strictly economic, you mean at a subsistence, barter level, then you may be right.  The minute you introduce money, or courts, or a whole host of services and supports that are essential to the running of an economy, then there is not such thing as strictly economic.   The economy does not exist in a vacuum.  It cannot exist on its own except in a state of nature — where the strong take from the weakest, where goods and services can only be carried as far as your neighbor, and the medium of exchange is a tangible item or service in return for a tangible item or service.   There are no “property rights”, there is no inheritance, no standard unit of exchange, and accumulated wealth is only what you can either see and protect, or carry with you.  Those conditions have not existed for thousands of years.  

            If you are talking about modern society, there is no “strictly economic”. It is an artificial, mental exercise that has no meaning with reference to the world we live in.

          • Rupert in Springfield

            I could have plunked down 50 farmers in 1800 Wyoming and had them survive trade amongst each other etc. for quite some time economically with zero government workers.

            I could not plunk down 50 government workers anywhere, at any time period, and do the same thing.

            Why? Because the government workers need to be paid through a tax base. The private workers do not.

            Want another example? I mean its pretty easy.

            I could create the Acme security agency in the town of Middleville. They protect businesses the police seem unable to protect. If Middleville goes bust and turns into a ghost town, the Acme security agency will find work in neighboring Obamaville, where the economy is booming. The Middleville Police Department, however, ceases to exist.

            Got it now? Government cannot exist without an economy to tax, thus it drains the economy. An economy can exist without government, thus it is not reliant nor a drain in the way government is.

            Put it to you guys this way, think about it, who pays for the government workers when everyone works for government?

          • valley person

            “I could have plunked down 50 farmers in 1800 Wyoming and had them
            survive trade amongst each other etc. for quite some time
            economically with zero government workers.”

            Putting aside the problem that those farmers would have been more than 70 years ahead of the time the US calvary cleared the area of Sioux, those 50 farmers would have needed a public road to use as a trade route. And since in Wyoming they would all have only been able to grow basically 2 things, wheat and/or cattle, there would have been no basis for trade.  Your little experiment would be sustainable for maybe a couple of years at most.

            Government workers do not need to be paid through a tax base. A lot of government work is fee for service. The rest is done fee for payment through taxes.  If you hire a private security guard to camp out in front of your Springfield estate and protect your stuff, you are exchanging money (lets not even get into who issued the money and manages the amount in circulation) for a service. If you instead pay a tax that trains, equips and staffs a public police force, and they provide your security, what is the difference? Its payment for a service either way. You can make arguments about your right to choose what you want to pay for, etc…which is fine. But in strictly economic terms, a service is a service. Doesn’t matter how it is paid for. Its value for money.

            “I could not plunk down 50 government workers anywhere, at any time period, and do the same thing.”

            So you have never heard of communism? I’m surprised. the Soviet Union, to name just one, had a sustainable economy for 70 years in which every worker was basically a government employee. They produced stuff, traded stuff, had services, even invented built very sophisticated military hardware. Yes, the system was not the paragon of efficiency, and the goods were shoddy and mismatched to what the consumer wanted, but nevertheless it was a sustainable system. Unlike you mythical Wyoming example, which (A) never happened and (B) probably couldn’t happen.

            You should have used Pitcairn Island, a real world example of 50 individuals trying to eke out an existence with no formal government, but that one actually didn’t work out so well either.

            “Got it now? Government cannot exist without an economy to tax, thus it drains the economy”

            No, I don’t got it. Government can and has existed without an economy to tax. An economy without government has not existed outside of hunter gatherers, and even they had a government of sorts.

            Government provides services. Services account for 70% of advanced economies. In some advanced economies, like Denmark, Government services account for 55% of total economic exchange. Yet Denmark prospers. To you, Larry, and Steve, this is impossible because how could they take away more than half of “production” and maintain themselves?

            Please explain. 

            “Put it to you guys this way, think about it, who pays for the government workers when everyone works for government?”

            Other government workers is the answer.

          • 3H

            Rupert.. you said: “Could a society with only private workers survive? Of course. Such societies can and have survived.  You did not say a hypothetical society.  You said that such societies CAN and HAVE survived.  Which ones?  For how long?  

            Your Wyoming farmers are a hypothetical construct and are immaterial since they never existed.  And, as VP pointed out, they still need Governmental interference, support and help.  By the way, from whom did those Wyoming farmers buy their land?  Who files and enforces claims to land?   Who adjudicates disputes?   How long before they form their own government — because it is necessary to have one for an economy that is more than subsistence living?

             I could create the Acme security agency in the town of Middleville. They protect businesses the police seem unable to protect. If Middleville goes bust and turns into a ghost town, the Acme security agency will find work in neighboring Obamaville, where the economy is booming.

            Actually, you’ve proven my point.  When the town goes bust, and turns into a ghost town, the economy dies.  Acme goes to a different town – with a functioning government.  If your hypothesis was true… Acme and the people of Middleville would continue to economically thrive because the Government is not essential to private sector economy.

          • valley person

            It looks like it is impossible for Rupert or like minded conservative-libertarian thinkers to grasp the concept of government as a service provider, and that services are as much a part of a modern productive economy as anything else. Paying through taxes or paying direct doesn’t matter. Its still an economic exchange. Its a brain cell fryer of the 1st order for them. They really have to believe that tax money is “taken away” from the economy and just disappears down a rat hole rather than having been used to pay people to provide a service.  No grasp of economics whatsoever.

          • Rupert in Springfield

            >thinkers to grasp the concept of government as a service provider

            No, everyone can grasp that. No one ever said government cant produce services. The point is that they cannot do so in absense of a tax base of private industry to feed upon and in general without forcing people to buy the service.

            Example one:

            Were building permits optional, far fewer would but them.

            IDIOT ALERT – IDIOT ALERT – IDIOT ALERT – IDIOT ALERT

            THIS DOES NOT MEAN A BUILDING PERMIT IS OR IS NOT DESIRABLE

            THIS DOES NOT MEAN A BUILDING PERMIT IS OR IS NOT DESIRABLE

            THIS DOES NOT MEAN A BUILDING PERMIT IS OR IS NOT DESIRABLE

            THIS DOES NOT MEAN A BUILDING PERMIT IS OR IS NOT DESIRABLE

            THIS DOES NOT MEAN A BUILDING PERMIT IS OR IS NOT DESIRABLE

            THIS DOES NOT MEAN A BUILDING PERMIT IS OR IS NOT DESIRABLE

            THIS DOES NOT MEAN A BUILDING PERMIT IS OR IS NOT DESIRABLE

            THIS DOES NOT MEAN A BUILDING PERMIT IS OR IS NOT DESIRABLE

            END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT

            The building permit department does provide a service, but it cannot do so without the builder to pay him. Were the building permit optional, builders would not disappear. Were the builders to disappear, the building department would soon follow.

            The building department exists due to builders, the builders do not exist due to the building department.

            Example Two:

            Look, let’s make this real simple.

            If a fisherman happens upon a river, he can fish and support himself possibly in perpetuity.

            If a fishing permit agent happens upon a river, he will die in short order without the fisherman to sell his permits to.

            Got it now?

            The former is essential, the latter, whether desirable or not, cannot exist without the former to pay him. The reverse is not true.

            IDIOT ALERT – IDIOT ALERT – IDIOT ALERT – IDIOT ALERT

            POINTING OUT FISHING PERMITS EXIST DUE TO FISHERMAN IS NOT ADVOCACY FOR  DRIFT NETTING OF RIVERS.

            POINTING OUT FISHING PERMITS EXIST DUE TO FISHERMAN IS NOT ADVOCACY FOR  DRIFT NETTING OF RIVERS.

            POINTING OUT FISHING PERMITS EXIST DUE TO FISHERMAN IS NOT ADVOCACY FOR  DRIFT NETTING OF RIVERS.

            POINTING OUT FISHING PERMITS EXIST DUE TO FISHERMAN IS NOT ADVOCACY FOR  DRIFT NETTING OF RIVERS.

            POINTING OUT FISHING PERMITS EXIST DUE TO FISHERMAN IS NOT ADVOCACY FOR  DRIFT NETTING OF RIVERS.

            POINTING OUT FISHING PERMITS EXIST DUE TO FISHERMAN IS NOT ADVOCACY FOR  DRIFT NETTING OF RIVERS.

            POINTING OUT FISHING PERMITS EXIST DUE TO FISHERMAN IS NOT ADVOCACY FOR  DRIFT NETTING OF RIVERS.

            END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT – END IDIOT ALERT

          • valley person

            “The point is that they cannot do so in absense of a tax base of private
            industry to feed upon and in general without forcing people to buy the
            service.”

            Then how do you explain the Soviet Union, or even Denmark? In the former there was no private industry whatsoever, yet there was a functioning economy. A government department of shoe making, one for retailing, for transporting goods to market, and so forth.   No taxes needed. And the system held up for 75 years. Much longer than your hypothetical Wyoming farmers or your hypothetical private security guards would hold up.

            And Denmark. The public sector is 60% of the entire, quite prosperous economy. This must be mathematically impossible. How can they possibly extract more in taxes than the private economy produces? They can’t. So the only conclusion is the government is producing value in the form of services, paid for by a combination of taxes and fees.

            “The building department exists due to builders, the builders do not exist due to the building department.”

            Putting one economic activity ahead of the other does not make the subsequent activity uneconomic. Absent a farmer growing surplus food, no one can focus on making building materials, let alone take the time to build a house to sell to someone else. So using your analogy, the only economic productivity is at the most basic level of production. This may be your theory, but it has nothing to do with actual economics.

            As I said way back, we now have an economy that is 70% services. The building permit dude is squarely in the service industry, and is as much a part of the economy as the realtor who sold the property, the architect who designed the house, the interior decorator, and the baby sitter. They all may be “dependent” on the builder, but so what? 

            “If a fisherman happens upon a river, he can fish and support himself possibly in perpetuity.

            If a fishing permit agent happens upon a river, he will die in short order without the fisherman to sell his permits to.

            Got it now?”

            No, I still don’t got it. The fisherman is going to encounter other fishermen competing for the same stock of fish. In short order they will over-fish the pond. To prevent themselves from doing so they ask the government to appoint a fishing permit agent to regulate the catch. That is the real world. Essential or tertiary does not matter. Its all productive work.

          • 3H

            And, they provide those services on an economy of scale.   

            I suppose in a perfect Libertarian world, the benefits of society are accorded by economic resources.  Which becomes self-perpetuating.   By an accident of birth, no matter that you are as smart and capable as your “betters”, your chances of ascending are much less than that of a dolt born to a rich family.  Not that that doesn’t happen anyway, but sometimes government can smooth down the edges.

          • Rupert in Springfield

            >Your Wyoming farmers are a hypothetical construct and are immaterial since they never existed.

            I suppose that would be news to the settlers and colonialists. But you are entitled to your opinion.

            >And, as VP pointed out, they still need Governmental interference, support and help.

            Not really. Government help was non existent for the colonialists and sparse at best for westward settlers.

            >because it is necessary to have one for an economy that is more than subsistence living?

            Read idiot alerts above.

            >Actually, you’ve proven my point.

            Actually I havn’t. You are drawing two conclusions that do not follow. One that the town went bust due to government failure. Two that and existing government is necessary in the town Acme moves to. Neither are true obviously. In fact, Acme would probably be more needed in a town without a functioning government.

          • 3H

            I did not say the government went bust due to government failure, please read what I wrote and not what you want it to say.  

            A town is governmental body.  When the town (government) fails or dies.. ACME moves on, in your scenario, to a new town – a booming town.  Evidently in your scenario, a thriving town is essential for economic activity.

            Why, in your scenario, didn’t the people continue to thrive despite the absence of a government?  If you made a bad example, own up to it.

            Your examples are hypothetical towns and farmers.  Please give me a concrete, real-world, historical example of a society that has survived with only private workers.  A society where, if there is a government, it has not been essential to the economy.

            In order for your hypotheses to be valid, it needs to be tested against facts.  Otherwise it is just an exercise in speculative fiction.

            Government help was non existent for the colonialists and sparse at best for westward settlers.

            Really?  So troops were not used to subdue native populations that threatened farmers?  Courts did not adjudicate claims and settle suits?   Rules were not established for commerce?

            And on the west…  towns were not almost immediately formed for the mutual benefit and protections of settlers?   The army was never used, again, to subdue native populations?   Sheriffs were not elected, courts were not founded?  They just happily existed with not infrastructure…?  Oh.. from whom did those setters buy  their land claims?  Who enforced those claims?  What role did the various forts of the west play in sustaining and promoting westward migration? 

            Your example —

            If a fisherman happens upon a river, he can fish and support himself possibly in perpetuity.  Is a single individual engaged in basic survival.  There is no economic activity going on.   In your example, there are no property rights except direct possession and occupation.   A dozen other fisherman can also walk up to that river and start fishing…  and none of them may get enough fish to survive on.   You said it is a real world example – do you know this person?   Does he own the river bank?  Is he fishing from someone else’s land?

            The only way your hypotheses is going to work and be valid – is in a state of anarchy where there are no property rights.. no money..  no trade except, as I’ve said before, what you can carry.  And..only as long as you can protect it yourself.  If it is stolen from you, or you are cheated, there is no one to step in and settle your claim.  The minute you form a compact with your neighbors, you have formed a government.  Limited, small, but still a government.  

          • 3H

            Ahh.. as for the fisherman, you said real simple.. not real life, so no example is necessary.

          • just doing the math

            For goodness sakes, take the caps lock off!

          • Rupert in Springfield

            The caps are done on purpose they tend to save liberals from the mistake of making  the same tired argument over and over.

            That argument being that disparaging some aspects of government is advocacy for abolition of all government.

            I do wish it were not necessary, but it is a time saver.

            Thanks for you patience.

          • 3H

            Do you think that standing there yelling IDIOT ALERT IDIOT ALERT over and over again is more of a reflection on the people you consider idiots.. or yourself.   Step back, and imagine your reaction if I, or VP, was doing this.   Would you think it was infantile and silly?   You would be right.

          • valley person

            “I suppose that would be news to the settlers and colonialists.”

            Yes, it would be since every initial colonial settlement was government chartered, and the first thing every group did was establish a local government structure that included taxation to pay for common needs. Your Wyoming we-don’t-need-no-stinking-government yeomen never existed dude. Its a construct that only exists in your libertarian fantasy head.

            “Government help was non existent for the colonialists and sparse at best for westward settlers.”

            And you get this from what alternative history source? Government was sparse for western settlers? I guess so, unless you consider the Louisiana Purchase, followed by government clearing the lands of the original inhabitants, creating a half dozen homestead acts, sending out government surveyors that allowed individuals to establish title,with strict limits and obligations, keeping the peace, building the few roads that there were (military roads all,) giving millions of acres of land to private companies to build railroads so that the hardy yeoman could actually get their moth eaten products to urban markets, and building canals and dams that made desert agriculture even possible. You have stumbled into yet another “What have the Romans ever done for us” moment Rupert. 

            Give it up man. Strike three. You are out.

          • just doing the math

            I think you meant Rupert.

          • valley person

            You are absolutely correct. My bad. Strike one on me.

  • 3H

    I’m expanding the comments with Rupert because they are going to get ever more narrow.

    Rupert – what you are describing, maybe even advocation, is an Agrarian Socialist Utopia.   Not surprisingly, all your examples require a small number of people in, essentially, an agrarian setting where they are, for most part, self-sufficent.  Furthermore, in this utopia, there are no indigenous peoples to be controlled or removed.   The land is evidently free for the taking.  And there is no migration of more people to worry about.  No competition for land and resources. 

    Lets move the debate back into the 21st century.  Into day’s modern market capitalism – can, and would you, argue that Government is desirable, maybe a necessity, but not essential?

    Do you have any examples of any societies in a market driven economy where  Government is not essential to the health and maintenance of the private sector?

    • valley dude

      He can’t offer you any real world examples because he lives in Rupertville, an imaginary place with an imaginary economic system, but he thinks this is the real world. 

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