Democrats and Job Creation

Right From the Start

Sunday’s Oregonian contained an article about the impasse on “jobs bills” in the Oregon legislature. The story is instructive both in regards to the unquenchable belief by Democrats that government creates jobs, and the continuing willingness of the mainstream press to accept the press releases from the Democrats as gospel without the slightest bit of question or inquiry.

The Oregonian article starts with this bizarre statement:

“It was good news when Oregon’s unemployment rate finally dropped below 9 percent in December. But the state remains higher than the national average; more than 175,000 Oregonians are still looking for work.”

But that was before the revised numbers were published on Tuesday. The revised OLMIS report showed that the number of jobs created from October to November did not increase by 5,317 but rather actually decreased by 1,200 and similarly between November and December the number of jobs created did not increase by 1,690 but rather it decreased by another 300. The unemployment rate in December did not drop below 9.0 percent but rather remained at 9.1 percent. The recently released figures show an estimated employment gain of 5,400 jobs between December and January but given the revisions for November and December, those numbers are suspect

Both the original numbers and revised numbers indicate that the improvement in the unemployment numbers from October to November and from November to December were not the result of job creation but rather the result of more people simply giving up looking for a job. That is hardly “good news” as reported by the Oregonian.

The Oregonian did note that Oregon’s unemployment rate was higher than the national average (a number that has also been skewed by more people giving up than jobs being created) and that nearly 175,000 Oregonians were still looking for work. The 175,000 figure used by the Oregonian does not represent the number of Oregonians looking for work but rather the number of Oregonians receiving unemployment benefits – and even there it is understated by about 3,000 people.

All of this and not one critical question by the Oregonian as to the numbers presented, the responsibility of the past and current Democrat administrations to ameliorate those numbers, or the results of any past Democrat initiatives to create jobs. It is as if all of this occurred in a different dimension – one in which twenty-five years of Democrat administrations and legislative dominance either in numbers of through the use of the veto – remained detached and exculpated. But then again if you have had a seat at the table of those who have run Oregon for the past twenty-five years, you would be hard pressed to criticize that which you supported unabashedly.

Which now brings us back to the competing “jobs bills” as reported by the Oregonian. The article states:

“Republicans want to leverage Oregon’s natural resources, creating more jobs by increasing logging on state forests, drawing more water out of the Columbia River for farmers and expanding enterprising zones that offer tax breaks to businesses that locate in economically hard-hit areas.

“Democrats’ jobs agenda focuses primarily on getting capital into the hands of businesses through government-backed loans, grants or public works projects.”

It is this latter sentence that should evoke peals of laughter in the Oregonian newsroom but instead it was dutifully reported in exactly the manner presented by the Democrats.

These are the same Democrats that removed $735 Million of capital from businesses each biennium through the adoption of Measures 66 and 67. These are the same Democrats who used practically all of the proceeds of that tax increase to increase the number of public employees, increase their salaries and increase their benefits. So much for “getting capital into the hands of businesses.”

Despite being warned by representatives of the business community that Measures 66 and 67 would repress investment in Oregon and would slow the economic recovery, the Democrats, in order to benefit their prime financial backers – the public employees unions – used their favorite “economic” tool – class warfare. Measure 66 and 67 were presented as “taxing the rich” and holding the vast majority of voters harmless. And it worked. I don’t mean that it worked in promoting economic recovery. I mean it worked in fooling voters into believing that there were no consequences to them by attacking the rich. But there are consequences. Oregon’s economic recovery continues to lag the rest of the nation. Unemployment remains high. Employment growth remains so anemic that even the most bullish forecasters suggest that it will be well into 2014 and perhaps 2016 before the 152,000 jobs lost during the economic downturn are recovered. And the tax increase failed to produce the expected revenue because, as the Wall Street Journal put it:

“Instead of $180 million collected last year from the new tax, the state received $130 million. The Eugene Register-Guard newspaper reports that after the tax was raised ‘income tax and other revenue collections began plunging so steeply that any gains from the two measures seemed trivial.’

 “One reason revenues are so low is that about one-quarter of the rich tax filers seem to have gone missing. The state expected 38,000 Oregonians to pay the higher tax, but only 28,000 did. Funny how that always happens. These numbers are in line with a Cascade Policy Institute study, based on interstate migration patterns, predicting that the tax surcharge would lead to 80,000 fewer wealthy tax filers in Oregon over the next decade.

The best way to “put capital into the hands of businesses” is to not take it from them in the first place as evidenced by the tragic results of Measures 66 and 67. That error can only be compounded by then “borrowing” more money through bonds to be used for selected public works projects. But that is precisely what the Democrats are proposing. Having spent all of the proceeds of Measure 66 and 67 rewarding the public employees – and now obligated to continue that reward as a recurring cost – the Democrats are going to pick the winners and losers in the business world by borrowing more money and using it for projects that heavily involve more public employees in planning, developing, awarding and supervising public works projects.

There is a reason that Oregon has lagged the nation, even when the economy was sailing along. Twenty-five years of believing that government creates jobs, that government should choose how funds are invested, and that government should choose the winners and losers in an otherwise free market has brought Oregon to this. And the blame lies principally with the voters who continue to buy the Democrat story of “something for nothing and the chicks are free.” Democrats are, like the scorpion on the frog, just doing what they do – using taxpayer funds to create dependency on the government.

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Posted by at 05:00 | Posted in Economy, Public Employee Unions, State Taxes, Unemployment | 13 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Ramalama

    Government does, in fact, hire people. Ergo, it creates jobs.

    • Bob Clark

      Not really.  In order to pay for the government job, monies must be extracted from others who would otherwise use their dollars to pay for another person’s private sector job.  The latter is usually a more productive, value oriented job as individuals are more adept at knowing what precisely they need, want and are willing to pay.  A typical government bureaucrat by comparison is removed from the importance of choosing the most effective allocation of resources.  It is the efficient allocation of resources which eventually leads to further economic growth, allowing existing government to raise additional revenues at constant tax rates to fund a more robust social safety net. 

      And as to the safety net function.  It is actually a job better suited to churches, charities and others who work with the recepient of public assistance to coax them to become more self supportive (usually a happier result for even the recepient).  The government lacks the moral compass in most cases to do the latter even.

      Oregon is a sad case where its leadership has swallowed hard on a central planning variant of political economy, induced to do so by the crack cocaine like addictive powers of a spendthrifth federal government.

      • valley person

        ” Not really.  In order to pay for the government job, monies must be
        extracted from others who would otherwise use their dollars to pay
        for another person’s private sector job. ”

        If the monies extracted hire people to provide services, and those people in turn spend money on goods and services, and the net result is more jobs than would have occurred otherwise, then the government did indeed “create jobs.”

        But the bigger question that conservatives always seem to miss is, what would the PRODUCTIVITY of the private sector be if it did not have a mostly publicly educated workforce, publicly provided property protection, public management of waste, public provision of clean water, publicly provided transportation networks, from local roads to freeways to ports and airports,  public patent and copywrite protection, public investment in R&D through public universities and labs, and a large number of important but largely invisible services provided only by, or best by, the public sector? 

  • JoelinPDX

    Well, I disagree…government does create jobs. The question is how many of the jobs created by government are truly necessary? My guess is very few. I figure the government hires about four people to do the job of one.

    When I worked for one of the Republicans candidates for governor who lost in Multnomah County and won the rest of the state we had numbers showing nine state departments had workers doing duplicate work. That was a case of the state hiring nine people to do the work one person could have accomplished.It’s interesting how the unemployment rate is reported with great flare every month but when the oops number comes out it is generally overlooked…especially when the original number is “good” news and the fudge factor is bad. 

    • valley person

       And how exactly did you guys figure out there were 9 people doing 1 job? Were they all sitting at the same desk or something?

      • JoelinPDX

        It was a tactic little known by liberals called research. We had three full-time researchers on staff.

        Something else you need to explore is reading. If you’d read my post you would have read that the nine “workers” “worked” in different departments. Don’t worry over it though VP…it’s nothing that would bother your little liberal mind.

        • Ramalama


          Can you provide any sources to back up your claim?

          • valley person

             Joel just told us he is the source. Had his own researchers and all that.

  • Rupert in Springfield

    >“Democrats’ jobs agenda focuses primarily on getting capital into
    the hands of businesses through government-backed loans, grants or
    public works projects.”

    You would think that for a crowd that on the surface shrieks about corporate welfare this would be anathema. Not so. Corporate welfare, like govt backed loans, grants and public works is absolutely essential to those on the left. It enables them to do a multitude of things. Primarily it allows control of business, and thus people. Tow the party line or have the potential to be a fat cat contributor and you get a tax break or a subsidy go against it and the hammer comes down – measure 67.

    The second thing this sort of corporate welfare does is it enables money laundering. You give a company a subsidy, they return a portion of it in campaign contributions. This is what we saw with BP and Solyndra. Unlike traditional money laundering, where the money launderer is concerned with “the vig”, the amount charged to render the money clean, politicians don’t give a rip, its your money not theirs. All they care about is how much they can get back in campaign contributions.

    Ever wonder why Obama and the DNC get so much more money from Wall Street banks and hedge fund managers? That’s why. It’s pay to play and when you have a president with absolutely no moral compunction about tipping the playing field towards rich contributors you better believe they will pay and pay big for that kind of privilege.

    • valley person

       And when are you giving up your taxpayer subsidized, corporate welfare cheap hydro energy Rupert?

    • 3H

      So much more money than whom Rupert?  We’ve been down this road already, and now you’re just repeating a falsehood.  The fact is, except for the Presidential election in 2008, Republicans have received more contributions from Wall Street and the investment community than Democrats.  And this year, Mitt has received the lion’s share.  We’ll see if that continues into the general election.

      And… Obama didn’t get “so much more”

      “The sector gave at least 55 percent of their contributions to the GOP from 1996 to 2004, but actually gave a slight majority of their donations to Democrats in the 2008 cycle.” 

      Note the word, “slight”.  

      You’ve now repeated that assertion twice.  Do you have any evidence to back it up?  A third time and I’ll be convinced that you are lying rather than just being wrong.

      • Ramalama

        3H, you’re forgetting. In Right Wing World, if they believe it, it’s true.

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