Jobs Policy and Ivory Towers

Can the state make s dent on unemployment? A Republican says yes and one economist says nah.Prominent Oregonians offered sharply different — and somewhat ironic — views last week on whether state government can affect the economy. A well known economist said the state is merely along for the ride, while the Senate's top Republican insisted state actions can dampen job growth or propel creation of small business

Joe Cortright, a private economist known for popularizing the idea of traded-sector jobs, told a legislative committee the state is along for the ride and cannot affect the future.

Senate Republican Leader Ted Ferrioli disagreed with Cortright in an op-ed piece published by The Oregonian: "I'd like to advise these economists to install some windows into their ivory towers. I am afraid they are ignoring the living testimony of Oregon's thousands of small businesses if they help perpetuate that overregulation and excessive tax burden have nothing to do with the economic distress of businesses or our ability to recruit new employers to Oregon. A cursory look at the state's excessive minimum wage, top tax rate and regulatory creep all reveal these factors to be significant forces affecting Oregon's economic future."

Senate and House Republicans have charged there were too few job-creation proposals considered in the 2011 session. This debate is bound to continue between now and the February legislative session, as well as into the political campaign season.

Meanwhile, major business lobby organizations, including Associated Oregon Industries, the Oregon Business Council and the Portland Business Alliance, have been developing a jobs agenda for both the 2012 and 2013 legislative sessions.

AOI is holding a Business Policy Forum on regulatory issues in early October. The Oregon Committee, a group of lobbyists that has been gathering to consider proposals as an alternative to the angry debate over taxes after the 2009 legislative session, is preparing economic development and jobs proposals. A large delegation of Oregon policymakers, including legislators and the governor, just returned from a trade mission to China in an attempt to buttress ties with that country's bulging economy..

Rep. Brian Clem, D-Salem, gave a speech in Salem last week in which he touted the beneficial effects of House Bill 3000, the Buy Oregon First Action, which passed in the 2011 session. He said HB 3000 is the kind of action lawmakers can take to boost economic prospects.

Whether and which economic development proposals gain traction depends on politics — what party is in charge, what political leaders want to do, what the public supports and what the governor does.

Speaking of the governor, Democrat John Kitzhaber is facing a reality that all state governors face. The success of his tenure will ride, at least in part, on the health of Oregon's economy. If the economy remains stuck in the mud, he will bear some of the blame, just as he claim credit if the economy rebounds.

But, taking credit, whether Democrat or Republican, depends on doing something. The question is whether the optimistic, activist viewpoint of Ferrioli will prevail or whether Cortright's view that the state is a hapless bystander becomes the order of the day.

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[The author, CFM partner Dave Fiskum, has followed the ups and downs of Oregon's economy for more than 30 years. He has lobbied for many organizations and served as deputy director of the Oregon Economic Development Department in the Administration of Governor Victor Atiyeh.]