Let Businesses Speak Truth to Folly
Chuck Sheketoff
Recent news stories highlight a major challenge that legislative leaders faced when they adopted their balanced budget plan: the refusal by some business lobbying groups and some otherwise reasonable people to acknowledge that the public sector is an important part of the economy.
First, the Statesman Journal reported how rebuilding the Oregon State Hospital was benefiting about 100 Oregon businesses (PDF), many of them local to the Salem area. The breadth of the impact was clear — employing workers from landscapers, plumbers, roofers and electricians to engineers and glass and flooring suppliers. As chronicled there and in the Gresham Outlook, a 109-year-old business is reopening a mothballed facility in Gresham to make bricks for the project (PDF). The $280 million state hospital project is putting significant public money — yes, tax dollars — into the pockets of businesses operating in Oregon.
Many of the construction-related businesses benefiting directly from the project may be members of the Oregon-Columbia Chapter of the Associated General Contractors (AGC). Yet, two days after the Statesman Journal story ran, The Oregonian hit the stands with an article featuring that trade association’s opposition to the revenue package that was part of the balanced budget plan (PDF). Apparently, AGC wants voters to ignore the fact that the state hospital project is the largest use of General Fund financing this biennium and that state income tax revenues support General Fund-financed construction jobs.
Some of the disconnect stems from lobbyists perpetuating the myth that state taxes somehow take money out of the economy. The claim may be good bumper sticker fodder, but it is the equivalent in economic theory of the claims of Flat Earth Society members. Sadly, too many politicians and business lobbyists spout the deceptive bumper sticker talk, no matter how absurd.
The public sector is an integral part of the economy, not separate from it. Find me a business that has two cash registers, one for government employees’ purchases and one for everyone else. In every corner of Oregon the private sector benefits directly and indirectly from public spending.
The economic flat-earthers ignore headlines like “State hospital project provides an economic injection for Oregon businesses” and instead complain that public sector employment has not fallen like private sector employment during the Great Recession. Never mind the role the public sector has played as a safety net for the private sector and its employees. Never mind the thousands of private sector jobs throughout Oregon that are directly or indirectly the result of public sector spending, including jobs on the state mental hospital construction project, in the health care industry made possible with Medicaid dollars, with private businesses that provide food to government office buildings and meetings, and with private sector providers of services to emotionally disturbed children and to our elderly and disabled at long-term care facilities, to name a few. Never mind that we all should be thankful the public sector was the last actor standing in the face of the worldwide economic collapse.
Instead, the economic flat-earthers try to whip up public employment envy as a way to mask their own refusal to acknowledge the reality that private sector employers need a healthy public sector.
So how should Oregon’s legislators counter the economic flat-earthers?
I think the best practice would be to bring evidence of its absurdity directly to Oregonians throughout the state. Any business that does business directly with the state — a contract to provide services or supplies, work on a public works construction job, receive a tax credit subsidy, or benefit from a publicly-funded program such as those provided by job training or small business development centers — should be required by the Legislature to make public presentations about the important role that public sector spending had on their business or to put “your tax dollars at work” notices on their trucks, buildings, letterhead and such.
Oregonians would be well served by hearing firsthand from the businesses that accrue the benefits exactly how public sector spending is part of the economy. Imagine how many people would hear about government’s important role among private-sector businesses in Oregon if just the 100 Oregon businesses benefiting from just the Oregon State Hospital job had each made two community presentations about the importance of that work to their business?
People would remember the stories the businesses told. And just as they know that the earth isn’t flat, more Oregonians would know from the business community itself that the public sector is an important part of the economy in Oregon.
Chuck Sheketoff is the executive director of the Oregon Center for Public Policy. You can sign up to receive email notification of OCPP materials at www.ocpp.org
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connect with blueoregon
Dec 31, '09
The Voters' Guide booklet includes a statement in opposition from the Salem Area Chamber of Commerce. I can't imagine many parts of the state that will get hammered harder than Salem if these go down.
Dec 31, '09
"Sadly, too many politicians and business lobbyists spout the deceptive bumper sticker talk, no matter how absurd."
Absurd? The idea that you can take money from business and it is not coming out of the economy is absurd. So what if the money is being spent by business friends of the legislators does this really mean progress? This is simply wool over the eyes. The writer simply wants to replace economic freedom with Statist central planning. Not progress at all if you ask me.
"People would remember the stories the businesses told. And just as they know that the earth isn’t flat, more Oregonians would know from the business community itself that the public sector is an important part of the economy in Oregon."
People who think government that is controlled by lobbyists can spend money more effectively and understand our needs better are closer to being flat earthers. Keep in mind top down control has its roots in the medieval era when people believed the planet was flat. Only during the Renaissance did men begin to value humans as individuals. You collective taxation and spending scheme is much closer to the central planning of kings than enlightened ones.
Yehaah these taxes are great! pay them gladly because look at the fabulous impact! Can't you see your bottom line growing! This is almost insulting in tone and promotes the idea we are kindergartners in our minds. This sounds like pro-stimulus jargon to me.
Dec 31, '09
People simply do not know how policy making works. Here is policy making 101 for you guys: Step 1. Identify a business need you have and come up with a tax or law that will help fund it and if possible reduce competition. Step 2 Use a lobbyist or be your own lobbyists and contact a legislator or someone who has access to one and tell him about this "problem" and create a safety concern around this "problem" if possible. Be sure you have something to offer the legislator like public support or you are part of a PAC or something he needs. If you can't offer him something under the legal bribery laws, you are of no good to him. 3. Have your plan submitted to a subcommittee to be reviewed by a panel of "Citizen Experts" Once you have a version for the floor 4. Take it to the main body and use your influence to get it passed. Party line counts a lot here and so does seniority.
How to get your bills funded when there are not enough tax dollars 101: This is a challange because while most people will pay taxs for police, schools and social services most do not see the urgency the lobbyists do in getting their packages funded so fund them first and leave the basics to the voters. The voters will rarely not fund the very items they created goverment to provide. Play mind violence with them about how these services will fail until they give in and pass the new tax.
1:31 p.m.
Dec 31, '09
I'm not sure about public presentations, but the principle is a good one. How about requiring that every business that accepts public funds to do work is required to place an ad in their local paper outlining how much and what they did for that money?
I'd think progressives would like the public demonstration of value and conservatives (and many progressives) would like the effect it would have on exposing waste to public view.
Dec 31, '09
Well said, Chuck! I think open disclosure of their tax returns would be another gesture that should be promoted.
Dec 31, '09
As a businessman, I would like to speak truth to folly. The public sector is an important part of the economy.
But, the only way the public sector makes a positive contribution to the economy is when it provides goods and services more cost effectively than the private sector could on its own. Good examples are roads, dams, and bridges, courts to enforce the rule of law, and national defense.
The public sector detracts from the economy when it extracts taxes to provide goods and services in a less cost effective manner, such as designing and building cars, lending money to favored businesses, subsidizing food production, or dare I say it, educating children.
Private sector employers need a public sector that works for them, not the other way around.
Dec 31, '09
Clearly public capital improvement projects benefit those in the private sector. In my day job I have had a lot of contact with companies in the sand and gravel industry. They are some of the biggest beneficiaries of public works contracting, yet some of the owners and operators are the most conservative anti-government and anti-tax folks I have ever met. An interesting disconnect in my opinion.
Dec 31, '09
Those are good points Bill. The Education part is the greatest challenge I see us facing. We are all on the grid with State education. It does not work well and it getting worse, so our challenge is to create something better but Not State run. The question being how? The rest of your post has very credible points because we have experienced them and anyone in business knows that government does not take into consideration all the possibilities in market decisions. Also once private schools would be established some lobbyist would come along and find a "problem" that would need policy and taxation as a "fix". Btw compulsory "public" education was a policy promoted by the KKK in the 1920s. They effectively lobbied to have it instituted as law because they did not want people learning from their parents or private schools, especially Catholics.
Dec 31, '09
" it provides goods and services more cost effectively than the private sector could on its own. "
It would be really interesting to see someone holding this view telling the folks at Cherry City Electric (or the other local businesses on the SJ list of state hospital contractors)this to their faces and seeing their reactions.
Theory is one thing. A private company getting a contract is something else.
Dec 31, '09
"We are all on the grid with State education. It does not work well and it getting worse, so our challenge is to create something better but Not State run. "
If you have actually been to a local public school and don't like what is being done, go volunteer at a local private school. Whether it be a Catholic school or some other private school, they can always use volunteers.
Of course, that would mean actually doing something in the real world, not just blogging.
3:20 p.m.
Dec 31, '09
Galen,
In addition to the KKK, I expect that Stalin, Hitler, and Mao all supported compulsory public education. I can't imagine why the American public has supported it in the face of such examples.
Dec 31, '09
So, since a free, public education was supported by fascists and communists, we should have none of it.
You know, I read somewhere, that Hitler, Mao and the KKK also ate food, drank water, and breathed air! Clearly, those activities are anti-freedom and we should stop them at once!
(But as individuals, of course. Wouldn't want to do anything that came close to "collective action.")
You first.
Dec 31, '09
"Of course, that would mean actually doing something in the real world, not just blogging."
pot calling the kettle.....?
We did kind of get off subject with Education. The fact is thought state run schools are no good and telling people to go volunteer is not going to fix it as long as it is state run. keep in mind the state does not have to respond to anyone so they would simply welcome your free labor or reject it based on how they feel or what some bureaucrat may say.
I love Jaybeats response. He is faced with evidence of social collective failure and changes subject from collective failuers to eating as if they are on in the same. I am delighted though there are no real responses to these statements. This means people are at least thinking or know they cannot answer them.
Dec 31, '09
Currently I work in a program called AVID---look it up at avidonline.com.
Anyone who has not been around teenagers recently should find a way to get involved---the students I work with are in some ways more positive and more mature than certain adults I know.
My first campaign where I actually went door to door is coming up on 40 years ago.
Person to person is always more effective than blogging, phone banks, TV ads, imho.
But of course on a blog there are those who believe no one leaving comments has any real world experience unless it is someone they know personally.
Dec 31, '09
That would be avidonline.org you put .com. I will check it out. The assumptions are going both ways FYI.
Dec 31, '09
Well said Chuck! I think it is also important that businesses acknowledge, and citizens understand, that the private sector benefits greatly from a strong public sector in more ways than through direct contracts. One example of vital public sector significance that I can share from my own business is the value of our public schools, specifically Mt. Hood Community College. MHCC has an outstanding auto technician training program that turns out between 30 and 40 students per year prepared to earn $35K/year and more. Over 95% of their graduates are employed in their chosen field at the time of their graduation. I have participated in this training program for over 12 years, as an employer of both student interns and full-time employees as well as a member of the program’s advisory board. I can tell you I don’t know of a better automotive internship program, public or private. The reason my story is important is that the program may well be cut in half if Ballot Measures 66 and 67 fail. The 2-year MHCC program currently operates with 4 instructors. Last spring, during State-wide budget cutting, 2 of those instructors nearly lost their jobs. If 66 & 67 fail, they will almost certainly be gone. For me that will mean I will have a student intern only every other term, for all automotive employers it will mean they have half as many applicants to fill open positions, and for the students it will mean only half as many will be eligible for these good family-wage jobs. And of course Oregon will suffer because in all likelihood those who couldn’t get into the much-diminished program will continue to be unemployed or under-employed. I can think of many other examples of the public sector’s importance to my business success but I can see this example most clearly because its significance seems so immediate.
Dec 31, '09
Chemeketa enters into contracts with employers new to the area to handle specialized training. How can that be possible if private sector is completely self sufficient and don't need no public sector?
And who maintains roads, provides a justice system, etc.
Dec 31, '09
I spend my own time and money to train my employees. I value them and after I train them they are worth more and get paid for that experience. I must pay them more to keep them from leaving. I do not expect tax payers to foot the bill. Because I pay the tax and do not get trained employees I am short the funds to hire 3 people I need. I wonder how this impacts others and now that I think about it, I wonder what impact this central planning is having on the economy as a whole? I see many unforeseen consequences of this. To add measure 66 and 67 into the pot is like cannibalization.
Dec 31, '09
LT:
In Galen's imaginary world all righteous employers, no matter how large or how small, have all the resources and time necessary to evaluate and hire potential employees, create and administer both theoretical and practical training regimens, establish all necessary standards and certifications, create and administer the necessary aprenticeship and intern programs, and still run a successful business. It is only we mortals here on earth who require the assistance of the "nanny state" to become successful and profitable. Shame on us. LOL
Dec 31, '09
Great, Jim!
I have worked in retail and dealt face to face with customers. I have also worked in education.
Sometimes I suspect the most vocal opponents of our reality-based point of view have ever worked in either occupation.
Or for that matter, ever had public sector customers. Some business sells computers, software, tables, office supplies, food for lunches/vending machines, etc. to public sector locations---it is not like there are collective farms that grow the food and then process it.
Jan 1, '10
Johnny has the answer
Jan 1, '10
The economic flat-earthers also conveniently overlook the reality that public sector employees also pay full taxes on their income--so, in effect, they're required to pay their own salary. Methinks that if any of them were in a similar position, they'd be griping mightily about it and demanding an exemption from the taxes that take away from their full salary (I realize that most of these folks somehow think that public sector employees don't pay taxes).
But that leads to another reality point. Cut the public sector, and you cut the tax income from public sector employees. That ends up hurting state budgets even further, and leads to another round of budget and employee cuts....the circle goes on.
Of course, it's convenient to claim public school failure. Load the public schools down with unfunded mandates and populations that private schools don't have to serve (unlike public schools, private schools get to pick and choose their attendees, so disruptive and disabled kids get shunted off into the public system), let the private schools skim off the cream, and of course the public schools will look like a mess.
And compulsory schooling forces everyone into the public system? LOL. I guess the thriving network of home schoolers are outlaws.
Jan 1, '10
OK, I agree that most of the money the state spends ends up in the state economy (unless you want to count OHSU opening a bio-tech center in FLorida.)
My point is, if you left that $100 in the pocket of a tax payer, he'd probable spend all of it in ORegon. IF we give $100 tax to Oregon, probably $50 ends up in the economy building and producting things.
Nonetheless, it is an interesting concept. How do you feel about out of state money spent on campaigns in Oregon?
Jan 1, '10
Gee thanks. It never occured to me that the Tram created some short term jobs and employee consuming.
Your position justifies every government spending scheme and program.
I feel so much better.
Sort of like I felt when my friend Steve Clark at the Tribune told us Biotech skeptics that the packaging plant in Hillsboro should silence our critisism about no biotech research jobs being created with the 100s of millions in tax dollars "invested".
Jan 1, '10
I heard to get a government contract with the State of Oregon one must be unionized or a member of a Union or so called Union Labor. Is this true?
Jan 1, '10
"I heard to get a government contract with the State of Oregon one must be unionized or a member of a Union or so called Union Labor. Is this true?"
Right! And you have to agree to kick back 10% of the contract into the Governor's slush fund, too. LOL. Galen, you are so weak. You pretend to be so politcally astute and well-informed. What a poseur.
Jan 1, '10
Good effort, Chuck, but you're wasting your time. Too many people (like "Galen") have been brainwashed with the right-wing dogma that all spending by "the gummint" is bad and taxes must be ALWAYS cut and NEVER increased.
Jan 1, '10
Posted by: dartagnan | Jan 1, 2010 5:50:29 PM
Good effort, Chuck, but you're wasting your time. Too many people (like "Galen") have been brainwashed with the right-wing dogma
Don't you have enough link spammers and dittoheads on here that you don't have to invent more? Galen has established that he is thinking for himself, even if you don't approve of his ideas or mode of expression. If he happens to agree with whomever, that doesn't demonstrate they originated the idea. As we have said, most right wing ideas are tired and old. That plus karma = a lot of people saying the same thing.
More and more anybody that doesn't give the article a pithy little attaboy is considered a troll. Almost wrote "pity". Freudian that.
Jan 1, '10
I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.
Alena
http://smallbusinessgrant.info
Jan 2, '10
Can we call this current depression by it's correct name, the Bush Depression, please?
Jan 2, '10
I was just asking a question Houser. You did not seem to answer it. Try using your mind instead of your anger. I was told by an individual you did need to be Union, but I have no way to verify it. If you don't have something intelligent say well....
Houser you are just angry because the system works for you and your little toys might be reduced. You can call me names and get emotional, but it serves nothing if there is no intelligent remark behind it. I used to think like you Houser before I studied a bit more on the subject. You guys who are so "open minded" that you never care to read a bit about how socialism and government intervention reduces freedom. I had a guy the other day that had to go to a dictionary to tell me what freedom was. Think about that for a moment people. If you don't know what freedom is how you can come close to understanding how economic policy impacts freedom?
Peri Brown, your ideas are not new they are in fact older than mine. They just seem new because you have not read enough history and philosophy. Socialism is not new, it is the age old state supremacy mindset that the world has been run by since the stone age. The guy on top knows what is best for everyone. You have been winning for a century now with more and more socialism. American's are waking up to this nonsense though a bit slowly.
Jan 3, '10
Galen, to your question regarding compulsory unionization in order to get a state contrct - No, the bidder does not have to be unionized in order to become a state contractor. This notion is false.
However, depending on the contract funding, the successful bidder may be required to show they meet various prevailing wage and benefits requirements. This can be accomplished without being a union shop.
Jan 3, '10
Posted by: Astaga.com lifestyle on the net | Jan 3, 2010 12:52:39 AM
The economic flat-earthers ignore headlines like “State hospital project provides an economic injection for Oregon businesses”
Hi sir i cant download the pdf about State hospital project provides an economic injection for Oregon businesses, in my PC links not worked..
<h2>How sad is it when the link spammers are contributing more than some posters...</h2>