- Eye on Media
The World newspaper has published a list of examples affirming why wooing outside capitalists to raise our economic fortunes isn’t a good idea. Dating from 1979 with the closure of the GP mill in Coos Bay followed by Weyerhaeuser’s North Bend mill all the way through the recent shutdowns of Oregon Resources and American Bridge the south coast is a textbook case of the folly of allowing a handful of employers to dominate the region and a microcosm of what is happening across the country.
In recent years we have witnessed some colossal failures of capitalism from Enron to Lehman Bros to the mortgage meltdown to the bankruptcies of Birmingham, Stockton and now Detroit. Clearly, capitalism as it is currently engineered is not working and the taxpayer is paying the price for perpetuating a flawed system.
The paper doesn’t mention the taxpayer incentives provided to these companies in the form of special assessments, property tax abatement and other tax credits but the public paid dearly for the jobs provided by these companies. Included in the list is the Port’s multimillion dollar acquisition and refurbishment of the railroad to service a handful of shippers. At a recent BOC meeting, Port CEO David Koch proudly announced that the Coquille plywood plant operated by Roseburg Forest Products can now ship products “competitively”. Koch went on to declare that another $40 million is necessary to bring the rail line speeds above ten miles per hour but that the economic health of the railroad is assured because housing starts are up nationally. While true investment broker, Peter Schiff points out this is by no means a trend and even this is fully subsidized and can be attributed in part to a flurry of natural catastrophes requiring massive rebuilding.
This is irrational exuberance, according to Schiff, as the market is fully subsidized by the Fed. “The U.S. government is guaranteeing all mortgages, and then buying them up,” explained Schiff, “it’s an artificial market, but the Fed, rather than Lehman Brothers, owns it.”
The point here is not that the efforts of the Port and other economic development agencies aren’t well meaning it is that they are driven by an industrial development philosophy more suited to the 19th century, like most capitalist ventures are heavily subsidized by the taxpayer and are entirely dependent upon market forces beyond local control. Even if we had a magical cargo teleportation tool American Bridge would have still shutdown because its only alliance is to its shareholders, not to the community or its workers. Coos County wants to play with the big boys but even with a single track rail line its geographic limitations mean it will never be a division one player.
Despite the decades of empirical evidence that industrial development is not benefiting the working class local leaders and legislators persist in taking these enormously risky gambles. The proposed Jordan Cove LNG project is a prime example of risky investment because widespread bans on hydraulic fracturing could dry up access to natural gas. Consider also the enormous footprint associated with this project vis a vis a 224 mile long pipeline a third of mile wide and 1300 acres on the North Spit to create less than 100 associated permanent jobs. Then consider the jobs lost and the lowered property values directly attributable to that same footprint.
Most of these economic development schemes are not well thought out nor do the benefit the masses, only a few will prosper and most of those will not reside in Coos County. Meanwhile, the real meat and potatoes of a local economy, small businesses and farms, go largely ignored and unsupported.
There are movements beginning around the globe and in the US to build up local economies that are not reliant upon big industry and fossil fuels. Communities are rising out of the quagmire by designing dynamic systems unique to their special needs but it requires a willingness to talk about alternatives to the status quo.