Oregon’s Economic Doldrums: A Sign of Government Apathy

Right From the Start

Here we go again. After a brief hiatus, Oregon’s job market has declined again. According to the Department of Employment, Oregon total employment fell from 1,624,900 to 1,622,400 – a decline of about 2,500 jobs.

This might be described as a modest decline but where the jobs were lost spells continuing trouble for Oregon’s moribund economy. The three highest paying industries made up almost all of the job losses. Construction lost 1,200 jobs, Manufacturing lost 100 jobs, and Transportation lost 1,100 jobs. That is bad enough but State Government began to grow again adding another 200 jobs. This continues a long trend by Democrat administrations of growing government while private industry suffers and growing budget deficits through reckless spending.

Look folks, there is a connection. A state government that cannot take care of its own business certainly cannot create an atmosphere that encourages location, growth or refurbishing of business. For years Oregon state government and the Portland business community engaged in a self-deception that Oregon’s quality of life was so superior that business would ignore all of the downsides in a rush to capture the “superior quality of life.”

The problem, however, is that Oregon’s quality of life is largely illusionary. Today, when business looks at Oregon here’s what it sees:

1.  Oregon state government continues to spend faster than the state’s underlying total personal income grows. By definition that means that Oregon is locked into an economic trajectory that requires annual increases in taxes and fees. Once again the legislature has turned to tax and fee increases for the coming biennium instead of reducing spending. Of course since state government is dominated by Democrats we are referring to the impending tax increases as “reductions in tax expenditures.” No matter what politically correct label you put on it, the results of reducing deductions in the computation of taxes results in a tax increase – the taxpayers are going to pay more. Get it.

2.  Oregon state governments spending is undisciplined. There are no priorities. No, let me put it another way – everything is a priority. Every idea, regardless of its long or short-term benefit, is treated equally and millions of dollars are thrown at it. A government program once begun is never terminated. Neither individual programs nor the totality of government expenditures are weighed against the meter of affordability. Here are a couple of examples:

  • Former Speaker of the House Vera Katz lobbied for and got the notorious CIM/CAM programs for K-12 education. For nearly fifteen years Oregon spent copious amounts of money – hundreds of millions of dollars – on a program that never produced a single positive result. The teachers hated it, the students failed it, and no college or business relied on it. It was pointless. Worse yet, by distraction it actually retarded actual education reforms resulting in Oregon’s continuing decline in academic achievement when compared to other states and other nations.
  • Gov. Kitzhaber lobbied for and got the failed Oregon Health Plan. While his Democrat colleagues were criticizing HMO’s for rationing healthcare, that is precisely what the Oregon Health Plan did. It was a plan that may have had some legitimacy at the point of its creation but like every government program in Oregon it grew beyond its capabilities and the taxpayers ability to fund it.
  • Gov. Kulongoski, searching for relevance in eight years of governmental malaise, seized upon “green economic growth” as his legacy. Like most everything else that Kulongoski engaged he didn’t know what it meant, where to begin or what success would look like. He just knew that he could throw a lot of money at it and by the time anyone noticed he would be gone and, therefore, unaccountable. The sum total of Kulongoski’s “green economy” is the provision of hundreds of millions of tax dollars to out of state entities to build the turbine blades and the generators for the wind farms that are now a blight on Oregon’s eastern landscape. Despite the massive subsidies, these wind farms cannot produce a reliable stream of power at a competitive price.

3.  Oregon’s educational system has been surrendered to the teachers unions and the result has been a continuing decline in academic achievement and a continuing increase in the cost of provisioning. By every measure Oregon’s K-12 educational system is failing and there is not an original thought in Oregon state government to fix it except to spend more on the same broken system. When Oregon voters confronted the $750 Million tax increases under Measures 66 and 67, they thought they were supporting education. In point of fact, they were simply paying for salary increases and gold-plated benefits (PERS and healthcare insurance) for the existing teacher union members.

4.  A single special interest group dominates Oregon state government. The public employees unions receive nearly $80 Million dollars each biennium from state and local governments through the payroll deduction process. Because the unions bargain with the very people whose election they funded, precious little of that money is used for recruiting, organizing, or bargaining. The vast majority of that money is used for political purposes to ensure that Democrats are elected at all levels of state and local government so that union numbers, wages and benefits can grow regardless of the underlying economic conditions.

5.  Oregon state government is not really hostile towards business; it is simply ignorant of the cause and effect on business. Government is populated primarily by people who lack any experience in the business world. Speaking about business to them is like speaking Urdu in Mississippi – they just don’t get it. And worse, twenty plus years of Democrat administrations has tolerated the growth of a class of government employees who are not just ignorant but are, in fact, malicious. Nelson DeMille in his novel Gold Coast described it thusly:

“’They don’t give a sh-t about collecting taxes for the government. You still don’t get it. They care about scaring the hell out of people. That’s power. And that’s jealousy, too. A guy like Novac don’t have the balls to get rich like you and me, but he’s got the brains to be pissed at not being rich. That’s a dangerous man.
“I nodded. Bellarosa really did sound like Machiavelli in modern translation.

“’Take a guy like Ferragamo.’ Bellarosa continued. ‘He pretends like it’s all about justice, democracy, equality, and caring about the poor and the victims of crime and all that sh-t. Wrong. That ain’t what it’s about, pal. It’s about f**king power. It’s jealousy, it’s personal, and it’s all covered up with nice sounding bullshit. . .”

There aren’t many but there are enough and the past five administrations have not only tolerated them but have encouraged them as punishment for those who oppose them.

Yes, when business looks at Oregon it doesn’t see promise; it sees formidable barriers. And when presented with more favorable alternatives, business routinely turns away.

As Pacific Power Chairman Pat Reiten noted:

“’It’s painful to say this, but Oregon isn’t so special a place any more,’ Reiten said. ‘It’s in decline. It’s below average.’”


Will Oregon change? There isn’t much indication that it will, or that it can, or that it cares.

  • 3H

    Larry… #4 is actually very wrong: “The public employee unions receive nearly $80 Million dollars each biennium from state and local governments through the payroll deduction process.” The money is received from the employees represented by the unions. State and local governments use payroll deduction to transfer employee dues, but the money belongs to the employee. They worked for it. Would you argue that private banks receive hundreds of millions of dollars each biennium from state and local government through the payroll deduction process? I’m willing to bet the vast majority of public employees take advantage of automatic deposit of their checks. It is employee money that goes to the unions – not tax payer money.

    • wnd

      – not taxpayer money. From what purse doth the public employee PERS slake from?

      • 3H

        We are not talking about PERS – we are talking about union dues. Follow the progression:

        1) People pay taxes

        2) Government collects the taxes and, in part, hires people to perform work for their various agencies.

        3) Employees receives pay for work done –

        4) Employee pays dues to union – in this case, the deduction from their paycheck to the union is processed by the agency they work for… just as the automatic deposit to their bank account is processed by the agency the work for. This just doesn’t happen in government, it happens in private industry as well. It is a very common practice.

        Again: tax payer pays money to the government, who takes the money and provides services which frequently involves paying people to perform the work necessary to provide the services that the tax payer paid for.

        At the point the money goes to the employee, it is no longer either the tax payers money, nor is it the government’s money. Just as if you work for a private employer, it is not their money when it goes into your bank account nor does the money belong to the consumer who paid the money to your employer. It is yours because you worked for it.

        This is the weaknesses of Larry’s argument – he makes it sound as if the dues paid to the unions is taken somewhere between steps 1 and 3. In reality, the dues are removed after step 3.

        Believe it or not, public employees are no different then the population are large – in fact they are the population at large just as much as you and Larry are. They pay taxes, they have families, they have to live within budgets – just like everyone else.

        This is the big picture.. this is generally how it works. I’m sure there must be some exceptions – but they are exceptions not the general rule.

        • Conservatively Speaking

          No way, Jose, 3H, in a partyculiar sense! The public employees drink from a different trough and you know ‘wail’ know it!

          The properly right thing that ought happen is for decertification of all public employee unions, yes, much as FDR foresaw (what could and did happen) – and, begin anew with commoner sense…sans the incumbent taxing issues of their foray, today. Omen!

        • Rupert in Springfield

          The problem with this argument is it logically false, as it presents a false equivilency.

          You are trying to equate an expense on the part of the employer, the employees wages, with an expense on the part of the employee, union dues. The employee works for the employer, thus there is an obligation to pay. How that is done is up to the employer, but it must be done. The union works for the employee, not the employer, thus there is no obligation whatsoever for the employer to arrange payment.

          In short, the employer is obligated to pay the employee, by direct deposit or not. The employer is under no more obligation to arrange the payment of union dues than they are the rental fee at Blockbuster or septic pumping fees of the employee.

          Therefore false equivalence thus false argument.

          • 3H

            Except as those two things relate to Larry Huss’ statement, they are equivalent. Larry stated: “The public employees unions receive nearly $80 Million dollars each biennium from state and local governments.” This is completely false. They do not receive 80 million per biennium from state and local governments. They receive 80 million per biennium from the employees. Here is where they are equivalent: the money that goes into the bank account is the employee’s money. the money that goes to pay the dues is the employee’s money.

            Also, if I were to say, “The banks receive hundreds of million dollars each biennium from state and local governments”, and I was talking about the automatic deposit of paychecks, that is as equally as false as Larry’s assertion about the PEU’s receiving 80 Million dollars from state and local governments. Another equivalency. The point I was making was that state and local governments are not giving 80 million every biennium to the PEU’s. Care to dispute that?

            Nor did I argue that the responsibility of the government to pay wages was the same as transferring dues from the employee’s check to the union. The issue isn’t how the money is transfered, but from where the money comes from.

            Therefore strawman argument therefore false.

          • Rupert in Springfield

            You are now making another false argument:

            Claiming I set up a straw man, which I clearly did not. You draw the equivalence quite explicitly in your argument here:

            “in this case, the deduction from their paycheck to the union is processed by the agency they work for… just as the automatic deposit to their bank account is processed by the agency the work for.”

            Sorry, thats as an explicit a statement of equivalence as one can ask for.

            So, you are setting up a straw man (claiming you never made the equivalence, when you did) to try and justify a false equivalence.

            That doesn’t mean that taxpayer money is going to the unions. I’m not addressing that. It does mean that your equating the automatic depositing of an employees paycheck as being the same as automatic deduction of union dues is a false argument for justification of the latter. The two are simply not the same thing.

            Again – an employer is under compulsion to pay an employee, whether by auto deposit or not is irrelevant. An employer is under no obligation to arrange payment of an employees bills, such as union dues. To claim equivalence between the two, as you clearly did, is where your argument falls apart.

            Thus again – a false argument, straw man, to defend an illogical argument, a false equivalence. Sorry.

          • 3H

            LOL.. I think we can go back and forth on this next to forever, so lets move on and just agree that we think each other is wrong.

            But, we can agree that Larry’s statement that “The public employees unions receive nearly $80 Million dollars each biennium from state and local governments through the payroll deduction process.” Is false… because Unions aren’t receiving money from state and local government is false, yes? Because they money the unions are receiving are, in fact, from the employees.

            I’d prefer to take a look at the forest and not get bogged down in whether we are looking at a Spruce or a Fir.

          • 3H

            That’s what I thought Rupert. All flash, no substance.

          • valley person

            If you are along the coast and needles are bluish and prickly to the touch, it is probably a spruce. If you are inland and the needles soft, you probably have a fir.

            Just trying to help.

      • Drummer

        It is called “Earned” compensation! Deal with it!

  • JoyKill

    You are straight out of Fountain Head. What do you call that, Reason or is it Objectivity? I forget, but it means fallowing the “great”(lol) “thinker” Ayn Rand right?