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.