Month: May 2011

Rural Oregon Is Tired of Being Ignored

A statistic commonly used to highlight the economic hardship Oregonians bear is that Oregonians on average earn 91 cents to every dollar of average earned income nationwide. But that story is even more dramatic for rural Oregonians, who earn a mere 75 cents on the dollar when compared to personal income nationally. Yet, the Oregon legislature has done nothing significant to begin to change this dire situation, despite the fact that bills have been introduced that could help rural economies.


The few economic stimulus bills that have worked their way through the system are quite limited and will benefit urban areas far more than rural areas. Bills that could have an immediate and direct benefit to rural areas have been essentially ignored, like bills to allow more water withdrawal from the Columbia River, better management of our state forests, or a pilot project to privatize some management functions of our state parks. Instead of moving these important ideas forward, we have seen the persistent movement of ideas which continue to handicap already depressed economies, like increasing marine reserves or establishing additional unnecessary government imposed natural resource protection programs.


Rural Oregon is tired of either being completely ignored by the legislature or told that eco-tourism is the beacon of hope and we should be thrilled with the seasonal minimum wage jobs that have replaced living wage jobs once provided by a thriving renewable natural resource industry.


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KPOJ podcast of Mark Zusman of WW talking about Oregon Capitol News

Click on Listen (to the right) to hear Carl Wolfson talk to Mark Zusman, editor of Willamette Week, about WW’s story on Oregon Capitol News.

To listen to all of Carl Wolfson’s recent shows, click here.

To read the Willamette Week article, click here.

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Arizona’s Empowering Education Savings Accounts: An Example for Oregon

Leading by example, Arizona’s government recently passed a bill creating Arizona Empowerment Accounts. Under the new program, if a child with special needs leaves his or her traditional public school, a portion of the state funding that would have gone toward educating that student will go into an education savings account for that student. The money then can pay for other educational options: private school tuition, online courses, tutoring or homeschool curriculum. The money left when the child finishes high school can be used for college within four years of high school graduation.

This program harnesses the benefits of both vouchers and savings accounts. Vouchers have been shown by gold standard social science studies to improve educational outcomes for students who receive vouchers and even for those who remain behind in regular public schools. Nine out of the ten random assignment empirical studies found that vouchers improve student outcomes; one found no impact. 19 out of 18 studies found that vouchers positively impacted regular public schools; only one found no impact.

Vouchers help give kids the intellectual background to better succeed in life, while the savings function of the program will also likely increase students’ financial ability to attend college. Research has shown that having economic assets substantially increases kids’ educational outcomes and likelihood to attend college. Of children who expect to one day graduate from a four-year college, those with savings accounts are six times more likely to attend college by the time they are 23.

Educational savings accounts will empower families to choose the type of education that will best serve their kids, leading to better outcomes for students. Oregon’s legislators should take note and bring such great opportunities to our state.

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You’re teaching my child what?

Join U-Choose exploring public school and private education. Speakers will present information on degradation of curriculum, sex education, and political correctness.  Cost of public education will also be addressed, along with controversies in Portland and Tigard Tualatin and Lake Oswego School Districts.


Featured Topics/Speakers:


§         “Dumbing Down” of America’s Youth – Dr. Chana Cox, Retired Faculty, Lewis and Clark College


§         Sex “Hyper” Education Indoctrination – Suzanne Gallagher, Business Owner, Past President Eagle Forum Oregon


§         Education Spending in Oregon and Nationally – Christina Martin, Policy Analyst, Cascade Policy Institute



You will not want to miss this lively event!


Come share your views and experiences during U-Talk.  Children, teens, adults welcome.


When: Thursday June 2, 6:30pm- 9:00pm


Where:         Tigard Chamber of Commerce

12345 SW Main Street

Tigard, OR


If you are interested in learning more about this event, contact Debra at


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Replace “Buy Local” Laws with the Laws of Economics

In the Great Depression many Americans thought they would be better off if they only bought American products. Congress passed the Smoot-Hawley Tariff Act in 1930. It raised import duties to protect American businesses and farmers, becoming a symbol of “beggar-thy-neighbor” policies designed to improve one country’s lot at the expense of others. Of course, those “others” retaliated in kind, resulting in everyone becoming worse off as trade declined.


Trade is almost always beneficial because of the economic law of comparative advantage, which says that any two countries, states or localities can both benefit from trade when they have different relative costs for producing the same goods. Even if one place could produce all goods more efficiently (which is virtually never the case), it still can gain by trading with less-efficient places as long as they have different relative efficiencies.


Today, many Americans again believe that globalization and free trade are “stealing” American jobs and harming American small businesses and consumers. This has given rise to a new movement called Buy Local First. Its proponents argue that we will all be better off if we simply shop at local stores and buy locally made products. While there can be good reasons to prefer local merchants, imposing “buy local” ordinances and laws surely will end up harming most of us because consumers will be forced to pay extra money for things they could purchase less expensively from elsewhere.


One particularly instructive aspect of localism is the purchase of food. Purchasing all our food locally may benefit local farmers, but we forget that:


“Practically all the food which has become an integral part of our culture originated someplace else. Archeological evidence suggests that sheep were first domesticated in what is now Iraq; chickens, in Pakistan; cattle, in Greece and Anatolia. The Egyptians were among the earliest people to domesticate wheat. Apples are considered about as wholesomely American as anything can be, but the apple…seems to have come from central Asia. Pears and grapes are from central Asia, too. Oranges, peaches, apricots and Japanese plums, from China. Bananas, from India or Malaysia. Pineapples, from Brazil or Paraguay. Cherries, from northern Europe.”*


What would have happened if localists had imposed trade restrictions on food before we had chickens, cattle and apples? We have them now, they might say, but what other products won’t we have in the future if trade is restricted now?

The latest evidence that too many of us don’t understand the benefits of trade comes from the Oregon legislature, where the House recently passed, and the Senate likely will pass, HB 3000, the Buy Oregon First bill. It would allow state agencies to pay at least 10 percent more for goods fabricated or processed or services performed entirely within the state. Governor John Kitzhaber issued a press release stating that “this bill will help Oregon businesses by encouraging the development and growth of our local supply chains, which will help create local jobs and revitalize our state’s economy.”

Economists have exposed the fallacies of such thinking over the centuries. Henry George may have said it best in 1886 when he wrote:


“If to prevent trade were to stimulate industry and promote prosperity, then the localities where he was most isolated would show the first advances of man. The natural protection to home industry afforded by rugged mountain-chains, by burning deserts, or by seas too wide and tempestuous for…the early mariner, would have given us the first glimmerings of civilization and shown its most rapid growth. But, in fact, it is where trade could be best carried on that we find wealth first accumulating and civilization beginning. It is on accessible harbors, by navigable rivers and much traveled highways that we find cities arising and the arts and sciences developing.”**


Here in Oregon, we should recognize that Portland was located on two navigable rivers for a reason. Early settlers knew that having access to world markets was good. When people freely choose to trade with one another, consumers have access to more products at better prices, and workers have more job opportunities.


Adam Smith wrote in “The Wealth of Nations in 1776”, “Consumption is the sole end and purpose of all production, and the interest of the producers ought to be attended to only in so far as it may be necessary for promoting that of the consumer.”


Journalist James Glassman says of the Smith quote above, “That is a great lesson for all policymakers to bear in mind. Ask, does this policy help consumers? Free trade allows consumers to buy a cornucopia of higher quality goods from other countries at lower prices than they would pay if they were restricted to buying homemade goods. Trade is obviously a huge benefit for consumers….And, says Adam Smith, what is better for consumers is always better for an economy….It is indeed true that some producers are hurt by free trade. And we can expect producers−such as textile industries and their employees and tomato growers−to kick and scream over free trade. Fine. But consumers…benefit mightily.”***


Oregon legislators are desperate to create jobs, but any jobs created from the Buy Oregon First bill almost certainly will be offset by lost jobs and lost opportunities in the state as government agencies unnessesarily pay more for some products, thus having less to spend on others. While these choices may benefit some Oregon producers, they will almost certainly harm Oregon consumers in general.


Rather than enshrine Buy Local First into law, we should educate Oregonians about more time-tested laws: the laws of economics.


*Jim Powell, “How markets nurtured our civilization,” 1999.
** Henry George, “Protection or Free Trade,” 1886.
*** James K. Glassman, “The Blessings of Free Trade,” Cato Institute, May 1, 1998.




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Testimony on Renewable Energy credits

John Charles testified on HB 3571, regarding renewable energy credits, before the Senate Environment and Natural Resources Committee on May 12, 2011.

Click here to listen.  John starts at 1:31


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Testimony on Bottle Bill expansion

John testified against the Bottle Bill Expansion, HB 3145, before the Senate Environment and Natural Resources Committee on May 17, 2011.

Click here to listen.  John starts at 1:41




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TriMet is violating its Full Funding Grant Agreement with the federal government for MAX Green Line

A letter sent yesterday to the regional administrator of the Federal Transit Administration by Cascade Policy Institute President John A. Charles, Jr. claims that TriMet is violating Sections 2(d) and 12(b) of its Full Funding Grant Agreement (FFGA) with the federal government on its South Corridor I-205/Portland Mall light rail project.
According to Charles, TriMet’s Green Line service is 33% below what the agency originally planned for, yet the FFGA “requires the transit agency to successfully operate the light rail line and the rest of the transit system after the project opens for revenue service.”

TriMet has repeatedly claimed that the reductions of service on the Green Line and throughout the entire system during the past two years are the result of declining revenues caused by the recession. However, Charles points out that since TriMet’s payroll tax rate was first increased by the legislature in 2003 (and implemented in 2005), TriMet’s annual payroll tax revenues have increased by 34% and total general fund dollars by 44% (inclusive of revenue expected in the draft FY 12 budget).

Moreover, during the 2005-2010 period, TriMet took in $60.3 million in new tax revenue but spent only $13.9 million on operation of the Green Line, in violation of its contract with the FTA.  The Green Line was subsidized with $345.4 million in federal capital funds.

Charles requests that the FTA take steps to enforce the terms of the contract by requiring that TriMet operate the Green Line at 100% of the originally planned service levels, “or pay back one-third of the total federal grant funding used for capital construction.”

Cascade is also asking that “until one of these actions takes place, FTAwithhold all capital funding for future TriMet rail projects, including but not limited to the $1.5 billion Milwaukie light rail line and the $932 million rail extension to Vancouver, WA.”

Click here to read the full letter to FTA.


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Testimony in opposition to SB 909

Before the Joint Education subcommittee of Ways & Means
Regarding establishing an Oregon Education Investment Board to oversee a unified public education system from early childhood through post secondary education
May 19, 2011

Audio can be found Here. Steve begins at the 49:20 mark.

Chairs Komp and Monroe and members of the Committee, my name is Steve Buckstein. I’m Senior Policy Analyst and founder of Cascade Policy Institute, a non-partisan, non-profit public policy research organization based in Portland. Our mission is to promote policies that enhance individual liberty, personal responsibility and economic opportunity in Oregon.

I’m here to oppose SB 909 because I’m afraid that the legislature is about to fall into the “bigger is better” trap. You can’t unify everything from early childhood through post-secondary education without pushing power and control even farther away from the people who should matter most – parents and students.

You’re also about to fall into a related trap that says consolidating agencies, school districts, ESD’s, etc. will lead to efficiencies and cost savings.

Similar efforts have already been tried in Oregon, and failed. Starting before Dr. Kitzhaber became governor the first time, while he was Senate President, the legislature mandated a reduction in the number of school districts, hoping to see cost savings. Between 1992 and 2001 the number of districts fell from 277 to 198.

At the end of the process there were actually more central office staff per pupil than at the beginning. Also, non-teaching staff grew faster than teachers, and per student spending, adjusted for inflation, rose more than 11 percent.

You should ask how the new unifying effort embodied in SB 909 squares with the Education Act for the Twenty-First Century, which passed the legislature in 1991. Remember the certificates of initial and advanced mastery? Some of you probably don’t because they never gained any traction; they just cost taxpayers a lot of money.

And how does this new effort square with the Quality Education Model, which the legislature approved in 1999?

Why haven’t such efforts in the K-12 education system achieved their goals? Because, according to the late education policy analyst John Wenders, they “…suck power upward and away from parents and students into top down, centralized and inflexible political arrangements, where unions and other special interests have more political clout. This causes accountability to decline and results in higher per pupil costs and lower educational results.”*

Is the answer really to put everything from early childhood through post-secondary education into one centrally planned system? I’m sure the Governor and the people he’ll appoint to the Oregon Education Investment Board are very smart people. But no such group can hope to design a system that meets the needs of every, or even most, Oregon children and their parents.

To better meet those needs, we should be going in the opposite direction. Find ways to push power down from the current systems toward teachers, and parents and students. Whatever funding the legislature appropriates to education, give the parents and students much more say in where, and how, it’s spent. Until you can move in that direction, the least you should do is reject this latest attempt to push the power even further away from the people who the system is supposed to help.

Thank you.


* John T. Wenders, Ph.D., “Deconsolidate Oregon’s School Districts,” Cascade Policy Institute, March 2005.



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How to Turn Oregon’s Business Climate Around

Two recent reports confirm that Oregon has a long way to go if it wants to be seen as a business-friendly state.


Earlier this month, Chief Executive magazine released its latest survey of 550 CEO’s. They were asked to rank states for their business environment based on a wide range of criteria, including taxation, regulation, workforce and quality of living. Oregon came in at a disappointing number 33. The top five states, in order, were Texas, North Carolina, Florida, Tennessee and Georgia.


Last week, the co-authors of “Rich States, Poor States,” which ranks every state’s economic competitiveness, reported in the Wall Street Journal that two of the 15 policies they look at “have consistently stood out as the most important in predicting where jobs will be created and incomes will rise. First, states with no income tax generally outperform high income tax states. Second, states that have right-to-work laws grow faster than states with forced unionism.”

Authors Arthur Laffer and Stephen Moore further noted that “between 2000 and 2008, 4.8 million Americans moved from forced union states to right-to-work states—that’s one person every minute of every day.”

Oregon doesn’t have either of these two most important business-friendly policies. Not only do we have an income tax, but it’s the highest in the country at 11 percent right now. And, we allow forced unionization.


Oregonians, and their elected representatives who are looking for ways to improve our business climate and create jobs, need look no further than these two policies. Eliminate our income tax and end forced unionism, and watch Oregon grow.


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