Gambling with our future in Coos Bay

by Wim de Vriend

In a recent piece in the Oregon Catalyst I deplored the decades-long – and continuing – anti-tourist attitude of Coos Bay’s “economic leaders” (I put that term in parenthesis because it evokes an image of economic dictatorship, and rightly so.) Our area has as much tourism potential as any on the coast; maybe even more. But besides denigrating tourism, our “economic leaders” have long put down retiree settlement and small business development as ways to make our economy grow.

Even worse, many of their smokestack promotions have obstructed that kind of development. With every possible kind of subsidy they’ve tried to attract massive fish plants, coal export terminals, pulp mills, steel mills, smelters, and most recently the Jordan Cove LNG export terminal. But all their expensive efforts have come to naught; and the same fate looks likely to befall their now-twelve-year-old dream of attracting Jordan Cove.

Meanwhile, forty years of constant – albeit never fulfilled – threats of massive industrial re-development have discouraged tourism, in-migration and alternative developments. As a result, during those calamitous forty years Coos Bay became the only part of western Oregon with a declining population and a lot of bad social statistics. Plus an ecodevo elite that could not or would not understand where they went wrong.

Coos Bay’s ecodevo program has been much like that of someone unfamiliar with probability theory who at the age of twenty-five decided that winning the lottery was the only way to a comfortable retirement. If every month he spent a hundred dollars on lottery tickets, he couldn’t lose. As is inevitable, during forty years of gambling he did have a few minor wins but nothing that made up for his losses, which he carefully avoided adding up. And he never the big jackpot. So now that he is sixty-five, he is shocked – shocked! – when an accountant shows him how thanks to the power of compound interest, that hundred dollars a month would have built him a very fine retirement fund. Thanks to forty years of throwing money at a pipe dream, he has no retirement.

So rather than gambling on any more big industrial proposals, my piece advocated a “small is beautiful” approach to development, by promoting our scenery and our recreational opportunities, simply to attract people, first as tourists, and next as residents – because almost everybody who decides to come to a new town has seen it first.

And once new residents settle in a town, you never know what may happen, for some of them will not only bring money, they will bring enterprise and imagination and sometimes an already-operating business. Some of those new businesses will grow and thrive and thus, to quote myself: “Solid, sustainable growth would have been the result, the kind seen in Astoria and in Newport, in Florence and in Bandon. What we have instead is the only stagnant economy in all of western Oregon, the worst real estate market, the highest unemployment, a rundown waterfront . . . . and more.”

Davesilb’s Dander is Up

For my troubles I received an overheated but unsigned reaction from an email address starting with “davesilb”. To give davesilb his due recognition, I reproduce it in full below:

“Yes bring in a few more liberals to Oregon so you can keep Oregon liberal forever so eventually the whole State becomes a welfare State with no real valuable bussiness that actually produce something of value. Build some ocean front properties so we all can help pay for the losses when natural disasters hit them. To me tourist industries are not good for the country. They produce nothing of value except revenue for government. Probably if the facts are known the reason the bussines’s failed there is because of government regulations. What really is the value of a million dollar home setting on ocean front property? It really only brings a few jobs until it is built and after that has no value to the economy !!”

The essence of davesilb’s rant seemed to be these lines: “To me tourist industries are not good for the country. They produce nothing of value except revenue for government. Probably if the facts are known the reason the bussines’s failed there is because of government regulations.”

It seemed obvious that this part was a tangle of two claims. One claim was that attracting tourists does our economy no good, only big industries do. And the second one was that when those industrial dreams fail to become reality, it must be because of “government regulations”. Now, it so happens that a couple of years ago I published a thick book that addressed those very issues – among others. While covering forty years of Coos Bay’s industrial recruitment failures and the area’s involuntary conversion into the Detroit of the Oregon coast, it took me twenty years to write my book. So even if I was a bit slow, unlike davesilb I know what I’m talking about; and if he or anyone else wants to dispute the facts I will cite from my book, feel free. Now let’s consider davesilb’s two claims in order.

Claim #1: Tourism and Residential Development are No Good

Obviously, davesilb is convinced that tourism and residential development are no good for any economy, but smokestacks are great.

Halfway through the twenty years of composing my book, an insight came to me. That insight was that loud assertions of that nature are just covers for a deeper problem: their authors don’t like anything new. They don’t like change. They don’t want change.

Just like davesilb, Coos Bay’s politicians and development bureaucrats don’t like tourism and retirement development and small business. But they do like big industries, which is why back in the seventies they set out on a quest to replace the big lumber mills that were declining with something else. Whatever it was, it had to be big too, because big was what they knew. They never considered what it might be that would draw big industries other than lumber to a remote place like Coos Bay.

But strangely, in other parts of our country the situation is reversed: those are places where the local politicians favor tourism and new residents and small business, and industrialization is not on their Christmas list. I even found a county in Florida whose commissioners strenuously opposed the establishment of an oyster farm, as too industrial and incompatible with the area’s thriving tourism and recreation business.

So who was right, Coos Bay and davesilb, or Florida and its county commissioners?

Neither one was right because basically they had the same outlook. Deep down, all of them DID NOT LIKE CHANGE. And yet life, at least life in a modern, thriving economy, is constant change. It has to be that way. You can’t walk backward into the future.

Consider this: all over the world, run-down waterfronts of old industrial cities like Coos Bay have been successfully redeveloped, and have generated a lot of new prosperity. They became something quite different from the past; that is true. But trying to re-create the past almost never works. The world has moved on.

Claim #2. When industrial pipe dreams fail, they fail because of “government regulations”.

I have also observed that people who are extremely opinionated but not well informed about economic development are easy prey for conspiracy theories. Blaming “government regulations”, which is a fig leaf for blaming environmentalists and the government officials who do their bidding, is one of those conspiracy theories. davesilb is not alone in this; a lot of people in Coos Bay think the way he does.

But they are wrong. The only smidgen of truth in their argument is that the government approval process for large new industries can be lengthy; Jordan Cove may well be the best example. There have been other cases too, not as lengthy but still laborious. But often, the slowness of government turned out to be helpful. For example, if Jordan Cove had been able to start building its terminal back in 2011 or 2012, without any red tape, changes in the global LNG market since then might have made the future of Oregon’s most expensive industry highly questionable.

Aside from the time it takes industries to comply with forms and rules, officials who consider it their job to say NO are extremely rare. At the end of the day – or a few years – assuming the applicant has crossed all the t’s and dotted all the i’s, they will raise their rubber stamp and approve the project; that’s what they consider their job to be. The history of FERC, the federal agency most involved with Jordan Cove LNG, clearly proves that. And when, in Coos Bay’s past, it was up to local officials to approve an industrial proposal with some environmental conditions, they signed their names to utterly ridiculous information. They didn’t care what their consultants said. They wanted to be our economic saviors – and there was not much anybody could do.

All that being said, I suspect that large national environmental organizations like the Sierra Club don’t mind the fearsome reputation they have among people like davesilb as spoilers of their industrial dreams. It probably helps their fundraising.

With some exceptions, government officials cater to businessmen. The politicians are thinking about campaign contributions; the bureaucrats are thinking about getting a much better job working for the industrialist’s compliance department; and either group may well be considering bribery.

The Real Causes of Our Failures.

These are the three causes that, for forty years, have doomed Coos Bay’s industrial pipe dreams.

The first was the local governments’ delusion that Coos Bay can again be a shipping hub and industrial center. In reality, Coos Bay is an economic island, away from the mainstream of commerce. And the only reason for its once-thriving harbor was the existence of a local lumber industry that needed to ship its products out. Most of that industry is gone. It will never again be what it was.

The second cause was the ecodevo crowd’s ignorance of the marketplace, which doomed many sensational proposals while they kept drooling over them. I have mentioned that the market is doing in the LNG project. But before that, the changing fish market has doomed fish plants, changing oil markets have doomed coal export, and it’s a similar story with smelters, a pulp mill, and a container terminal. Government bureaucrats or politicians or environmentalists had nothing to do with any of them.

The third cause was that many of the industrial fiascoes had been promoted by hucksters. Exploiting Coos Bay’s naïve belief in its future industrial greatness, those hucksters had their own agendas, usually stock market plays or corporate welfare scams to get more corporate subsidies someplace else, where they really wanted to go. Most never intended to build here at all.

Retired restaurant owner Wim de Vriend is the author of “The JOB Messiahs,” a history of forty disastrous years of economic development planning in the Coos Bay area. Written in an entertaining style and with hundreds of illustrations and historical pictures, “The JOB Messiahs” has been described as a manual of how not to improve an economy. He can be contacted at [email protected].

Response from ‘davesilb’ (12/27/2015):

A couple of things you like any liberal will do is put words in someone else’s month. Nowhere did I say anything about smoke stack industries. That is a code word used by liberals to make the other side sound bad. I do not want polluting industries that do not try to do the right things to clean up their act. You as a former restaurant owner would of course support tourism so any book you wrote on the subject of economics would have a biased slant to your side. I do not have the time to spend tearing down each point you make but I very well could and it would be easy. I do not make a living trying to convince people of my views unlike you who has a pony of some sort in this game. I do not. All I am concerned about is the State that I was born in and lived in for 65 years is no longer a State I am proud of. But having too many roots here it is not economical to move. You on the other hand probably moved to this State and brought your liberal ideas with you. You also failed to address the long time benefit of million dollar homes sitting on the ocean fronts verses industries?