Friday, May 15, 2009
What does the Unigovernor propose?
"Today in an address to the City Club of Portland, Governor Ted Kulongoski announced an emergency jobs program to help put at least 12,000 unemployed Oregonians back to work this summer.
“'President Roosevelt gave hope to millions of unemployed Americans when he created the Civilian Conservation Corps and other jobs programs. We need to take the same kind of immediate action in Oregon,' Governor Kulongoski said.
"If approved by the legislature, jobs under the Governor’s plan would begin July 1 and target unemployed Oregonians seeking a salary range of $8.40 - $10.00 per hour. Currently, there are 80,000 unemployed individuals with active profiles with the Employment Department that have expressed an interest in being hired for a job that pays within this hourly wage range.
"Furthermore, the average unemployment payment right now is $250 per week. Under the Governor’s plan, a full-time job paying $8.40 an hour would be $336 per week.
"The plan, called the Oregon Emergency Jobs Program, requires legislative approval for a one-time redirection of approximately $90 million in future payments to the state’s Unemployment Insurance Trust Fund. The fund currently amounts to $1.5 billion and has a dedicated funding source through regular payments by employers through payroll taxes."
Didga get it? How to grow jobs in Oregon? Just hire a buncha guys and givem money?
Complete comments by Governor Kulonzcynski here. (pdf)
Yet again, let me re-state: Oregon is the tenth largest state in the United States. And less than two percent of this giant landmass is considered developed land. Most of our counties are larger than the smaller states in the United States. Harney county is larger than the ten smallest states. Clatsop county is about the size of Rhode Island. And yet we continue to be dominated by the economic imperialism of Multnomah county. Their population of 660-thousand people dwarfs our population of 35-thousand. (Rhode Island has more than a million people.) And because they live hamster warren lives, they cannot see that tiny Multnomah county--just 435 square miles--simply isn't a model that we want to emulate.
People would move here if they could. They would build factories and plants here, if they could. On news that funding has been approved to deepen the Columbia River channel, the attraction to access to international markets would make Clatsop county extremely competitive for investors. The company that owns the railroad to Astoria has already made it known, clearly, that as soon as there is demand for rail, improvements to the line into Astoria would be made. Everything would seem to be in place for an explosion of growth in Clatsop county.
Except for one thing: land use law.
So the fact that the Feds are seeking greater authority over Oregon's resources may be a moot point. Portland, the Port of Portland and Metro are jealously guarding their rights to be the only market in the state that can have an industrial base. They do not want any industrial development outside Washington, Multnomah and Clackamas counties. And to make sure it never happens, they continue to bang the drums over things like the environment, global warming, the destruction of "public" places, and then they question whether or not any proposed business investment is "sustainable." Yes. they are all sustainable. Just as sustainable as is GM or buggy whip manufacture. (How did sustainability become a by-word of economic development theory?)
While Oregon's "Big Look" was supposed to respond to demands from rural counties to increase local control over local development issues, the truth is, nothing has happened. Even though the Oregon Department of Forestry was supposed to come up with a plan to increase timber harvesting to benefit local counties, nothing has happened. Even though Oregon now has the second highest unemployment rate in the country, nothing has happened.
So when US Senators Oberstar (D-MN) and Feingold (D-WI) look to make greater intractibility in resource utilization, should we be concerned? Further locking up Oregon resources seems to be the major raisson d'etre of our Leftist senators, Merkley and Wyden. Look at the forest lands locked up just this year. No surprise that both Merkley and Wyden are co-sponsors of this bill.
The problem with S. 787(pdf) is that it goes further than any previous bill on control of a state's natural resources. States like resource rich Oregon will have to face additional layers of regulation when attempting to conduct our lives. Fishing will be affected. Housing will be affected. Timber will be affected. Farming and ranching could be reduced to rubble. Why? To appease Mother Gaia. And teh Loons who drive all this in the Metro area.
S. 787 is going to be another nail in the coffin. But unlike the self-inflicted harm we suffer under SB 100 and our State Land Use Board, we will need to create a new alter to worship. Is it Constitutional? These days there doesn't seem to be any limits to federal power. Those powers enumerated in the Constitution seem trivial.
Thursday, May 14, 2009
But you can hear crickets.
Seven Oregon Chrysler and fifteen Washington dealers have had their livelihood taken from them with the stroke of a pen. Chrysler, under pressure from President Obama, has negated their contract with these dealers. Period. What they had yesterday is gone.
I watched Eddy Tonkin on CNBC last night and was impressed. Eddy is currently vice-chairman of the National Automobile Dealers Association. Eddy did good. And he's in Washington, D.C. today asking for some common sense from our national legislature.
Good luck, Ed.
So, here's the list of local and Oregon dealers that have gotten the ax. I know a lot of these guys. My heart aches. They've lost their livelihoods because of Chicago Rules. You wanted change? You gotcher change.
2406 NE Sandy Blvd.
Gresham Chrysler Jeep
1990 E Powell Boulevard
Thomas Sales & Service
2060 NE Highway 20
2300 W 7th
311 W Main St
Dave Hamilton Chevrolet-Oldsmobile
2067 North Highway 97
1550 N First Street
A&D Auto Sales
3712 NE 66th Ave
961 Commerce Ave
700 Seventh Avenue
How long will you put up with this? If you don't complain, they'll just keep on keepin' on.
It also allows for comments. My favs are "anonymous."
What anonymous commentors forget is that we have access to a wealth of information about them. So when a state employee comments "anonymously", he fails to remember that we have ways of knowing who you are.
Case in point, a comment to this post. And I ask you a question:
Is this sock puppetry? or 'turfing?
I know that Speaker Pelosi has claimed that the Tea Protests occured as a result of 'turfing. So, which is it, the puppet or the turf?
Wednesday, May 13, 2009
If you have visited this space from time to time, there are a couple of things that are fundamental in addressing the proposed policies of government. Things like, an understanding of microeconomic principles. Like, understanding that macroeconomic analysis is best when examined as a dynamic, rather than static phenomenon.
And, of course, there is a background in some pretty basic math.
In my experience, I have never known a politician that could tell what "it is" in the image above. Most politicians, in my experience, are borderline dyslexics. It is with this insight that I, among others, was unsurprised to find that none of the politicians that voted for the Stimulus Bill had read it. It is almost a certainty that no legislator reads the legislation for which he is going to cast his vote. There are elected officials and there is staff. They are all politicians.
Elected officials talk about things. Then they direct staff to write the language that would purportedly put the things that they talk about into law. This is why we spend billions of dollars each year on accountants. Most laws are so poorly written that they have no clear meaning. And since most of what accountants do is related to math, most mathematical discussions of policy end up trumping the policy makers. This, I hope, explains the Mad Magazine "Spy versus Spy" mentality of the Internal Revenue Service. The government hires guys that have math experience to go after guys who were complete geeks and nerds during their undergraduate years. If you were good at the numbers, do you think you'd make more as a CPA in private practise or as a Revenoor for the Gubbermint? Clearly, the guys at Revenue are tier two candidates. But they do get a reliably delivered check with reliably negotiated benefits.
Which brings us to our modern conundrum: What the hell are these guys thinking?
Coupla things happening this week.
First, our state's economist will be giving his Economic and Revenue Forecast.
You and I can already tell our state's legislators what that news is going to bring; the economy is in worse shape than was related in the last Economic and Revenue Forecast, and the amount of revenue coming into state coffers will be lower than was expected in the last Economic and Revenue Forecast.
Remember the graphic above? It's representative of a pretty simple math problem. With just a few variables. Can you imagine how many variables would have to be in a mathematical model of a states economy? What would some of those variables be? And which of those variables would be considered endogenous variables rather than exogenous?
Back in the '80's it was discovered that the state economist issued his Economic and Revenue Forecasts based upon on simple observation: what happened in the immediate past? If you're a gambler, you know about the predictive power of that observation. If you just won a hand of poker, chances are pretty good that you're going to win the next hand. The same is true of State Economists. If the economy is going into the toilet, chances are the economy is going to continue to go into the toilet. What gamblers and state economists have in common is that they're both looking for "turning points."
Statistically, hitting a hot streak is nearly impossible to prove if looked at as a mere theoretical. One of these precepts is held within the concept of the "fair deal." That is, if all possible variants of an actual deal are based upon the likelihood of certain cards being dealt to all the players remains random, the likelihood of any individual player having a greater likelihood of success is equal.
But as the game progresses, is that actually true?
Likewise for our state's economist, many of the assumptions that go into an econometric model that would tend to show statistical evidence for certain beliefs in economic outcomes must rely upon the randomness of the economic activities being observed. But, in neither case is this necessarily true.
Our Oregon Legislature, like a card shark, continually stacks the deck.
From forcing us to use dumb gas for our cars, to requiring the power company to invest in dumb energy to power our homes and businesses, to spending billions of dollars on dumb light-rail, our legislature continues to tax and spend their way into increasingly stupid economic conditions.
The worst tool of economic analysis out there has got to be Keynesian Economics, as taught by your local high school teacher. Since most public school teachers are severely math challenged, these public school teachers rely upon caveats inculcated during their undergraduate days. From psychology they pick up a little of Maslow. For economics, they pick up something called the "multiplier effect." And then they graduate. And then they start to teach new generations.
What passes for brilliant thinking, relying upon the Multiplier Effect, is that for every dollar spent by the government, five dollars in GNP is created. Or, words to that effect.
I noticed the other day a sign in the window of a downtown shop relating words to that effect when shopping for consumables. Something like, "every dollar you spend at our store increases the amount of money in our community by a factor of five. Every dollar spent at a chain store is money going out of the community and is lost." I paraphrase.
I went into the store and noticed that not a single product in the store was manufactured locally. So, I was totally at a loss as to what benefit would accrue to my community by my patronage there, rather than at the "big box" store down the street. The "big box" store employed more people. I rather suspect that they pay more in property taxes, too. All in all, I decided that if I really cared about my community that I would be better off paying lower prices at the "big box" than I would at a company that only claimed that I would be better off if my community shared the wealth of that store's multiplier effect.
This store owner forgot that the economy is dynamic, not static. The matrix upon which I base my decisions is not straight-jacketed by his pronouncement of the Multiplier Effect. If I got better service, maybe I'd patronize his store. If he had a better selection, I'd patronize his store.
But with higher prices and lower service, I'm better off at the "big box."
Politicians--as a class--seem to be stuck in the '40's with only Keynes' Multiplier Effect to hang their policy hats upon. They can't see that a dollar taken from the private sector is a dollar less the private sector has to improve productivity. That its a dollar less to provide employment, investment in new buildings and equipment. That's its a dollar less to provide better service.
They see taking that dollar as having a Multiplier Effect through their spending of that dollar.
And so they continue to depress the private market while increasing the public spending...all chasing that nebulous Multiplier Effect. All the while continually depressing the private sector. Because, somewhere, without the tools to inquire or verify on their own, they were told that the caveat "Multiplier Effect" was all they needed to know. And, like the dyslexic struggling in schools learning to overcome their deficiencies in reading with improved verbal skills, so to our political class continues to jawbone our problems without any fundamental concept of what it is they are doing, are continuing to do, and are committed to do.
And I, like you and our state's economist, are waiting for turning points.
I don't think we're going to get any during this session.
Tuesday, May 12, 2009
In Oregon, that seems to be a lot of people. So, while a good idea--especially as Oregon seems to want to lead the nation in unemployment--it's going to get killed.
But, for your edification, here's the plan from the Party of No (Republican Party):
Republicans propose budget that protects core services without increasing taxes
Back to Basics Budget lets service areas replay 2007-09 funding levels
Salem, OR – House and Senate Republicans announced a Back to Basics Budget plan on Tuesday. The plan funds a full school year, protects prioritized service areas like public safety and human services by giving them the same funding levels they received in the last two year budget and creates a $1.374 billion surplus for targeted legislative add-backs and contingency reserves.
“This budget protects our most important priorities: quality education for our kids, safe neighborhoods and services for the most needy and vulnerable,” said Senator Chris Telfer (R-Bend). “Republicans applied the same philosophy that Oregon families and small businesses are applying to their budgets, funding what is most important with what we have, tightening our belt and being fiscally responsible. If we do those things, we don’t have to talk about raising taxes on Oregon families and small businesses in these tough times.”
Highlights of the Back to Basics Budget include:
The plan starts with the assumption that Oregon government does not need to increase taxes in order to provide the services that Oregonians need and value.
The plan funds K-12 education with $6.245 billion, holding schools harmless with a zero cuts budget that ensures kids can receive a quality education through a full school year.
The plan protects public safety, human services and other core functions by giving them at a minimum the exact budget they had last cycle.
The plan leaves a $1.374 billion surplus for legislative add backs, enhancements, contingencies and reserves.
The plan leaves $457 million of our state reserves intact.
Republicans built the Back to Basics Budget using a philosophy that funds the most important, core services first. This budget creates a starting point that holds services like K-12 education, higher education, public safety agencies and human services providers harmless from any cuts from their 2007-09 funding levels.
To protect these priorities, the budget uses $911 million in Federal Stimulus money and $457 million from the Rainy Day and Education Stability Funds, leaving $457 million left in reserves. The budget also uses $429 million in savings and efficiency enhancements. After funding each core service at their 2007-09 level, the budget leaves $1.374 billion for the legislature to make targeted add-backs to the most important priorities.
“The way Oregon budgets must be fixed,” said Senator Frank Morse (R-Morse). “Past practices are simply not sustainable. Government must find ways to improve performance and demonstrate the ability to reduce costs. Ultimately, core services and functions of government can be preserved without raising taxes. ”
In the past, the legislature has started the budget discussion with an automatic, no-questions-asked increase to state agencies, called the “Essential Budget Level.” The legislature doesn’t require agencies to come before the budget writing committee and justify why they need increases in their base levels of spending like a business would. The Legislature has handed out increases without asking tough questions about what drives the cost of state government and how we can better prioritize. The result is out-of-control spending and insurmountable deficits. In fact, over the last ten years our state budget has increased by more than 75%.
“This is a fundamental change to the way the legislature budgets,” said Representative Bruce Hanna (R-Roseburg). “Oregonians are hurting and having to make tough choices in their budgets at home and in their businesses right now. We think Oregon government should be making the same tough decisions and start managing taxpayer dollars with responsibility.”
So, the Party of No has come up with a budget proposal that makes sense. The State can afford it. It recognizes that the growth of government has been uncontrolled (unsustainable).
Too bad your state representatives, Witt, Boone and Johnson, will vote against it. But, that's who you elected.
Have a nice day.
UPDATE: (Click on pic at bottom for larger image.)
One comment has been posted so far. Posted "anonymously." But it's interesting to note that the comment came from Salem, on the state's domain server. So it's probably safe to assume that it is either an employee of the state, or perhaps the friend or family of an employee that had access to the state's internet server.
My question is, does this cross the line into Sock Puppetry? Is this an example of "getting turfed"?
Readers of NW Republican may be aware of the the "Moonbat Rule Book" posted on the right sidebar of that site. I am, happily, the author of Rule 10. That is, it has been my experience that the Left is unaccustomed to arguing in good faith. In my book, calling someone a liar in the first sentence of any argument. People that can't argue without calling others names find themselves unable to comment here. For those who speak fluent Moonbatese, it is sufficient unto the day to find that Republicans have again lied. They are free to move on.
Examining the content of the comment, one is impressed with a blizzard of numbers. And the impecunious manner that these numbers are introduced to the reader. First under the commentor's knife? The base point for the Republican plan.
The plan under discussion was put together following the assumptions of the state economist in his April report of March numbers. (The new report is due out this Friday. I wrote about this here.)
So to argue against a plan based on the current "official" revenue expectations report is prolly not consistent with the comment author's predicate that the Republican plan "is not an honest effort." You can't have it both ways. If you suppress the truth to make a point, the sin may not be mortal. But it is venal.
Then another blizzard of words. If I were a young man working for a less than gifted state legislator, I know that I could comfort her with these words. I'd even write them down so that she could read them. Point being, if we "lose" $512-million in federal "stimulus" money so that we fail to further increase the size of our state's welfare system, I will not be disappointed. The Left sees these funds as a blessing. I see them as a curse. But "sustainability" is a word used to criticize fossil fuels, not government spending. We are, alas, worlds apart.
Finally, the issue of unspent budgeted funds. Taking funds that have been allocated and remain unspent, returning those funds to the General Fund makes sense. Our dear anonymous Salem commentor fails to share the way these funds will be recaptured. But that's not the point for our dear commentor.
The point is, budget issues in Salem are wierd, arcane and at times, simply opaque. And the commentor relies upon the Byzantine budget system to occlude from our view from the simple question, "where are the dollars, do we need to keep them there and can we use those dollars to provide the services that a State must provide?"
The the ballyhoo of the street huckster offering you a chance to double your money in a game of Three Card Monte, the conclusion of this commentor reeks of the conman. I'm reminded of an old saying a former econ prof shared with me: "If you can dazzle them with brilliance, baffle them with bullshit."
One of the things we grow best in Oregon are commissions. We have commissions on women and asians. We have an Advocacy Commission, Black Affairs Commission, Children and Families Commission. Don't forget the Columbia Gorge Commission, the Criminal Justice Commission, the Disabilities Commission and the Government Ethics Commission. Perhaps you knew about Oregon's Hispanic Affairs Commission and the Lane County Local Government Bounddary Commission. You are, I'm sure, aware of the Liquor Control Commission.
We have a commission for fish, a commission for patient safety (which it seems to me more likely to be concerned with patient dangers), and a commission for public utilities. In order to have tracks and gambling, we have a commission for racing. Students have a commission that is supposed to assist them somehow. Prolly financially.
Why they combined tax supervising and conservation into one commission is a puzzler. It was created in 1919, so I suppose the thought was, why make two boards when one will do. A progressive idea if there ever was one. If you think about the protections afforded us Oregonians in the last 90 years by this progressive board, you'll probably agree that retiring this much lauded and often referred to agency is a bad idea.
There's a commission that deals with teachers. But we all know that teachers have the union. The tourism commission has stuff printed. And Oregon would be worse off with less printed stuff.
And I haven't even listed the councils and boards.
So why be surprised when our new Labor Commissioner establishes a new commission? He had to do it. Even though we have all these existing commissions, we didn't have one dedicated to civil rights. Of course we have judges and courts, but is that enough? We have men and women in the state senate and house, but is that enough? And of course we have Commissioner Avakian himself. But that obviously is not enough.
We needed another commission. And it took Labor (how do you spell it without the requisite "u"?) Commissioner Avakian to ring the bell on this new day. It seems redundant that a Commissioner would create a new commission. Why have a labour commission in the first place, if it lacks the authority for taking a view at civil rights protection? Could it be that the Bureau of Labor and Industry doesn't have the authority? Or, is it that Commissioner Avakian is trying to distance himself from that authority?
Well, if we are to be measured against other states by the number of our commissions, maybe it is just that we lack the number and sheer size of a state bureaucracy to compete with the big boys. It just seems silly that the more we do, the more we become like California.
So, let's applaud the work of our new Labor Commish. In the face of declining state revenues, he unabashedly moves to increase the size of our government.
Monday, May 11, 2009
Beyond the lives lost was the intention of these terrorists: to disrupt the economy of the United States of America. A goal that they achieved.
During the days and weeks that followed that morning's attacks, we reacted in horror. Fear. Anger. Beyond the loss of lives and the buildings that were the objects of these attacks, economic activity slowed to a crawl. I know. Just as you know. If you're in the private sector.
Cash stopped flowing. People were holding on to their cash "in case." If you think about it, most of us can remember businesses that went under in the months that followed. For those of us who survived there is a quiet, private badge that we can wear as survivors. Which makes us distinctly different than those who receive their paychecks from public dollars. During the weeks, months and years that have followed the events of 9/11, not a single government employee missed a check. Not a teacher. Not a planner. Which brings us to the chart below.
Al-Qaeda struck at the end of III Quarter, 2001. The contraction of our economy was immediate. To stimulate the economy, the government enacted a series of economic measures to stimulate investment and production. In the private sector. Unlike the bank crisis of last Fall, the crisis faced by companies like American Express were truly existential. AmEx lost people. Their offices. But, they carried on.
Insurance companies, it was feared, were facing some of the greatest claims ever faced. Insurance companies, it was feared, could fail. But, they carried on.
What did take place was a quick reduction in the amount of taxes that were levied against us. In the private sector. It gave us more of our money. And if you take a look at the graph above, we were tracking back to budgetary surpluses until the housing bubble popped. Government action was swift. And returned us back to our recent history's recent high level of federal budgetary shortfall. The deficit at the end of 2008 was, in inflation adjusted terms, about where we were at the low point found in 2004.
This crisis, we were told, was truly existential. Financial firms could fail. Insurance companies could fail. And the response to this failure was distinctly different.
In 2001, these firms and institutions carried on. This time, they were told that they couldn't carry on without the help and intervention of the federal government. But this time, instead of creating the macroeconomic effects necessary for self-healing, the government told us, and firms, that they would need to become directly involved in the administration of these businesses. TARP, TALF, Stimulus.
In the meantime, the markets are somewhat quietly knitting together the fabric of our nation's economy. Some days are better than others. Given the value of commercial and home mortgages that has to be wrung from the economy due to the real estate bubble, I've thought that the bottom of the market was going to be around 8500. Until the excess valuation from the real estate market is eliminated. I will admit I was somewhat amazed when values dropped to the 7000 level. But something happened along the way to recovery.
The Stimulus Bill. Just looking at the graph above it's easy to see that having the Democrats gain control of the House, Senate and Presidency has had a greater negative economic impact than did the attacks of 9/11.
Did government policy towards home ownership create the real estate bubble? Yes. Did Fannie Mae and Freddie Mac fraudulently acquire sub-standard housing mortgages? Yes. Is there any accountability for this massive fraud? Nope. And the players who were able to use Senate rules to resist reform of Freddie and Fannie now have control of the chamber...and it looks like their going to have the numbers to resist any call for accountability.
Markets are more powerful than governments. Just ask the doyens of the former Soviet Union. A country that had more than 75 years of practise in elites determining the production practises of a nation. For those of you with a background in mathematics there must be an appreciation for the size of the matrices used in their calculations to advance the moral superiority of the modern socialist nation. (Note to Governor Kulongoski: these planners are available at below market wages!) Also, with those with a background in mathematics, it is apparent from the graph above that our economy had reached a turning point in 2004, and the our federal budgetary deficit was on track to move back into surpluses within the next few years. Had not the real estate bubble popped.
The market is repairing. Even in the face of withering future inflation rates. The market knows it's going to have to create a lot of wealth to pay for this vision of the future. Too bad that fewer and fewer of us will have private sector jobs to pay for this vision. But, I guess, that's the plan. Or, should I say, Vision?