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This page contains a single entry from the blog posted on January 14, 2009 2:19 AM. The previous post in this blog was Bush's last week. The next post in this blog is Venn Diagram of the Week. Many more can be found on the main index page or by looking through the archives.

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Wednesday, January 14, 2009

In Portland, the "creative class" does the math

The magic of local politicians' and bureaucrats' arithmetic never ceases to amaze. By "fast-tracking" pork construction projects, building low-income housing, and making loans to small businesses, the City of Portland says it's going to "add 4,985 jobs." Even taking into account that most of the jobs will last only as long as it takes to slap up some particle-board apartments and a minor league ballpark, that number seems awfully high. But don't hold your breath waiting for the local media to demand detail for the jobs claim -- both reporters left on the beat are now busy on other stories.

Speaking of math, $500 million for 5,000 jobs equals $100,000 of taxpayer money per job. How much of that $100,000 do Merritt Paulson and Hoffman Construction get to skim off?

Comments (42)

How many potholes does $500M fill?

Oh that's right, we need more streetcars, so it probably won't even fill one.

But Sam said that it is a "win, win" situation where the city saves money, people have jobs and the taxpayers don't pay anything!

Sam is like a local Bush, surrounding himself with people that agree and perpetuate his ideas. There is no room for dissent at s***ty hall.

Realize most of those jobs are 2-3 years worth of construction jobs. So basically the city of Portland is hiring construction workers. Construction done = jobs gone.

Maybe if one of these people had a job for a real profit-and-loss business instead of the government, they might understand the raw basics of how things work.

Hmmm. Just like Bush/Cheney et al used the war on terror to push through every crooked thing they wanted to do under the guise of doing good and protecting us, so goes the gang at City Hall. Now while we are distracted with the economy they will ram every gravy deal and giveaway through for the wealthy developers with the theme of 'stimulus'. Stimulus is now the code-word for funneling tax dollars away from essential services into the pockets of their cronies.
Too many parallels with the Bush administration to count....

Are these 5,000 jobs anything like the 10,000 biotech jobs Vera Katz promised the City when she approved the So What construction scam?

So basically the city of Portland is hiring construction workers. Construction done = jobs gone.

right. and the 5,000 is entirely a made up number, like "10,000 biotech jobs." like wind turbines on a bridge, people have no idea what the result actually will be.

there's a word for human activity that repeatedly and desperately relies on a "stimulus" to prop them up until the next stimulus: addiction.

Now I've seen everything in Portland . . . comparing Sam Adams to Bush / Cheney. What's next, Randy Leonard as John McCain and Amanda Fritz as Sarah Palin (were those really her kids on the campaign flyers)? It just shows that there is a central tenet to all politicians, which is "take care of your friends first."

$500 million for 5,000 jobs equals $100,000 of taxpayer money per job.

Which is true, but only if you assume that all the construction materials are free. This isn't the same as hiring 5000 philosophers to think big thoughts for $100,000 each.

Realize most of those jobs are 2-3 years worth of construction jobs. So basically the city of Portland is hiring construction workers. Construction done = jobs gone.

That's true. Except that when it's over, whatever they constructed remains. They're adding something to the physical space.

And note that the idea is that its a "stimulus" package - i.e. a temporary boost in spending in order to encourage private-sector economic growth. So it's perfectly reasonable for it to be limited in time.

Now, arguing over which projects make sense is a reasonable discussion, of course.

...when it's over, whatever they constructed remains

Remember, there's never an accounting in these numbers for the long-term budget to do proper maintenance on what is proposed. If history is our guide, it will deteriorate until the next stimulus program is needed to replace it.

Kari always sees the world through rose colored glasses. Those forever symbols like Portlandia are paradigms of ego driven stupidity, fits right in with the scam parade.

"Except that when it's over, whatever they constructed remains. They're adding something to the physical space."

My biggest issue, is that it will be used for monument building.

Example, Sam has this dream for the I-5 bridge that's pushing $5B by the time all the consultants get thru. They just know how to work these guys over when they have the look of love in their eyes.

In reality, a simpler bridge without ornamental wind turbines would probably cost 60% less. Of course, Sam will have a fit if it is not exactly done his way.

Hey! For only $20,000 I'll go around telling everyone how happily employed I am. That's a savings of 80%, right?

Hmmm, I'm not an economologist, but this looks like classic communist-style redistribution of income. $500 million taken from the taxpayers, the city takes a cut (say 70% maybe) for the "materials" cost (street car trolleys, gold-plated toilets, hipster light-rail art, Homer Williams, etc.), the rest go to a selected group of individuals (using a lottery selection I'm guessing) that get the jobs, assuming the labor is all local (ha!). Unless street cars, toilets and abstract hipster art are large revenue generators (maybe they make good tourist attractions), the big numbers on the balance sheet will probably be red.

Isn't this how the Soviet Union collapsed?

When I used to drink, it was the response to everything: Feeling bad - drink, feel like celebrating - drink, feel like thinking - drink, feel like playing music - drink.
No matter what happens in Portland the response is to spend and spend big. The proof is in the condo craze where we spent big to subsidize a market that was already going crazy on its own. Now we have an economic downturn and the response is - once again - to spend big.
You can't help yourself 'til you realize you have a problem.
I think the comparisons between Bush and Sam Adams are right on. Neither one of them has a focus on governing well. The job is a tedious backdrop to live out your dreams on. In Bush's case he was the military tough guy. In Sam's he is the developer visionary of Portland. Both paths count on imaginary money from the future and both paths will lead to economic collapse.

Hey, instead of creating new jobs how about just SAVING existing ones? Thanks to the genious leadership up on Pill Hill 15% of the information technology staff just got laid off. I'm not sure what the numbers are for other departments. I feel bad for the remaining staff that are stuck doing "more with less". And for those doctors and nurses that need computers to do their jobs. Good luck when something stops working. Especially since they made everyone more technology dependant by spending millions to purchase Epic software (which went over budget by the way)and deciding to put computers in every exam room for the nurses and docs to do their charting.

$500 million for 5,000 jobs? At best, this is only one side of the calculation. How many jobs are lost because the taxpayers have $500,000 less in their pockets? Could it be that the whole scheme is a net loser in jobs?

Of course, it is impossible to know. That is why the accounting for political make-work projects is sometimes referred to as smoke-and-mirrors.


Following up on d's comment regarding OHSU, the development of Pill Hill in SoWa should be a lesson to everyone interested in the economic development of Portland.

The lesson is this: Subsidies that lead a business away from its core purpose don't help anyone. Subsidies must be focused on enhancing existing strengths and competitive advantages of a business. Otherwise, subsidies lead businesses into areas of competive disadvantage, and that creates cascading problems for the business that's being subsidized. Losses beget more losses, and more of the core business must be hacked away to save the new expansions. The only way the whole enterprise can continue is with a never-ending cycle of dependence on subsidies.

This is what is happening at OHSU. Its expansion into SoWa has not advanced its core purpose as much as expanding into a less-expensive area would have, and as a consequence, its whole business model is now at risk. Instead of bringing thousands of jobs to Portland, the original investment was used to dig a big hole that we'll throw money into until the day OHSU refocuses on its core purpose.

Make it interesting and worthwhile so manufacturing, agriculture, and service industries will locate here rather than anywhere else.

If it is less cumbersome to do in the Portland Metro area rather than anywhere else, then jobs will be created here and stay here.

People complain about the subsidies that companies like Intel have received, but ignore the payroll taxes that Intel employees pay to Oregon and the property taxes paid to Washington county. Same goes for OHSU - no jobs created, then no new tax revenues. Creating government jobs does nothing for the economy.

How many businesses have given up on the Portland Metro area, only to pop-up elsewhere in the country?

I agree with the other comments, that construction projects produce jobs are short term. Only a continuous stream of projects will have a positive, long term impact.

As for layoffs and other reductions, companies can only last so long if there are not enough revenues to pay their fixed costs - labor, materials, and facilities. If business is down and there are no cash reserves, then adjusting employment levels is the eventual outcome.

Jim,
That's such a coherent explanation and it applies to so many aspects of our current predicament.
Subsidies are pretend. In the case of the housing bubble, one goal was to have more people own homes but rather than building an economy that paid them enough to own homes, we pretended it was working and got them in the homes first. Now we have to pay trillions to keep the pretend game going.
Jobs should grow like plants. They call factories plants, don't they? Our people are trying to put everything the plant needs in place and then hope it takes root, but if it's a desert, it's a desert no matter if we pretend it's fertile soil or not.
Help. I'm in an analogy and I can't get out.

"$500 million for 5,000 jobs equals $100,000 of taxpayer money per job."

Pissing into a hurricane.

Its unsurprising that ersatz liberals (like Kari Chisholm) are sanguine about the transfer of more largess to fat-cat developers and their vapid sycophants at city hall. People who support these beautification projects for the "creative" class make me sick. I for one would be glad to help beat "Portlandia" into scrap when the rioting inevitably starts.

When was the last time a prominent PDX democrat focused on poverty and social services? Progressive values are an afterthought in this bizarro city.

You see, Sam thinks he's smart. When he worked for Katz he rounded the 9,985 SoWhat bio-tech jobs to 10,000, with no substantiation. But now he impresses us with 4,985 jobs created which sounds "smart", but still no basis.

The other thing I find fascinating about this thread is that finally I see that people are dropping the perspectives of Republican and Democrat on this stimulus issue (except for Kari), and other issues too. There's hope.

We may finally be seeing the disconnect between our politicians, bureaucrats, commissions, and our incessantly same-old-people on committees and at hearings from the general public.

Well said:

The lesson is this: Subsidies that lead a business away from its core purpose don't help anyone. Subsidies must be focused on enhancing existing strengths and competitive advantages of a business. Otherwise, subsidies lead businesses into areas of competive disadvantage, and that creates cascading problems for the business that's being subsidized. Losses beget more losses, and more of the core business must be hacked away to save the new expansions. The only way the whole enterprise can continue is with a never-ending cycle of dependence on subsidies.

And what that means is that the only time subsidies are likely to work is when they are applied to the activities that don't need a subsidy because they are focused on those strengths.

The best example of ill-considered subsidy pork is one from the supposed progressives: Portland and Oregon are both forcing residents to give what amounts to an infinite subsidy for agrofuels (a mandate that you must purchase something that you would never purchase without the mandate is essentially an infinite subsidy).

This is on top of ladles of direct cash subsidies that Oregon is pouring over the existing federal subsidies. Net result: higher food prices, dramatically higher greenhouse emissions, and zero reduction in fossil fuel usage and zero impact on fossil fuel prices, not to mention $7/gallon biodiesel for Portland.

It's the Triple Crown of bad consequences of science illiteracy in power. Now the folks who pushed it are all backing away (rhetorically), admitting that what we're subsidizing is not good --- meanwhile, the subsidies keep flowing, the budget hole keeps growing, and there's no reporting on whether any of the goals or good intentions are being attained.

This isn't the same as hiring 5000 philosophers to think big thoughts for $100,000 each.

No, that would be ODOT at the state level.

The $500 million is OUR money. It's not growing on the City of Portland money tree.

This is simply Sam's way of fast tracking his previous boondoggles and cloaking them in "job creation" happy thoughts.

The only project that will pay for itself is the reservoir expansion at Powell Butte, and the council knows they need a cryptosporidium filtration/treatment plant to go along with it, but they don't want to blow the full $500 million on something we actually need. Right, Commissioner Leonard?... (crickets chirping)

The rest of the light rail/affordable housing/condo mafia projects are just more gravy for the Arlington Club overlords and Sam's union sponsors. They win: the taxpayer loses.

Someone who focused on needed infrastructure repair and maintenance (be it roads, schools or employment) might be seen as dull but at this time I'd gladly forego a "visionary" for someone who was a responsible conservator of our money and who considered the needs of the entire population rather than those of a few.

If you've lost your job you don't go out and buy a brand new car to go looking for another job while your family sits at home starving and naked.

Why not just announce a tax holiday for local businesses. No need to spend any tax dollars to stimulate the economy - just leave those same dollars in the pockets of citizens - DUH!

Portland would be better off if they took $1M and used that as prize money in a business plan contest. They could award 600K -1st place, 300K -2nd and 100K -3rd.

I suspect that in 10 years, the businesses created by this venture will have more employees than anything the city is wanting to do with that $500M will create long term.

Where in Portland's charter does it say that the City should to stimulate the economy when times are tough?

Musician, Everyone who would call attention to negative, obstructionist trivia like charters and missions has escaped or been purged.

There are, however, things that can be counted on in this world, like death and taxes. In this case, the rule is that the wildness of the consequences in the third act is proportional to the wildness of the hubris demonstrated in the first. Buckle your seatbelts.

Speaking of math, $500 million for 5,000 jobs equals $100,000 of taxpayer money per job.

Which isn't so bad when you figure that many of those jobs are created by catching up on the infrastructure backlog, meaning it's not just welfare for construction workers, it's a material improvement in our streets, sewers, and buildings. I don't understand how folks can criticize Portland for not keeping up on its infrastructure, but then also criticize them when they do.

Realize most of those jobs are 2-3 years worth of construction jobs. So basically the city of Portland is hiring construction workers. Construction done = jobs gone.

That's how construction works, they go from job to job with very little guarantee of an income between jobs. I think the workers who get hired for these projects who are sitting at home aren't going to complain about the "2-3 years" of a paycheck.

catching up on the infrastructure backlog

You can bet your bottom dollar that little or none of the $500 million will go toward maintenance and repair of anything. It's all for new, shiny toys, most of which aren't needed.

That's how construction works

See Bill McDonald's comment above. Construction jobs are like drugs.

AC,

When Samadams announces any of that $500M is going to fill the potholes on NE Sandy, he'll get my vote now and forever. Why is he instead talking about taking away lanes so we can install a streetcar? That's not an infrastructure backlog, that's creating another layer of B.S. we can't afford.

If City Hall was full of smart people, they'd give every citizen $1000 on the condition that they spend it locally on services or buying from local vendors. THAT would be an immediate stimulus.

There's a link to the list of projects here. One of the PDOT projects is called "Sandy & 57th."

There seems to be stuff on there to complain about, but also a lot of mundane street and sewer maintenance.

Like Sam the Tram's frenetic, incoherent 100 days' agenda of half-baked ideas, the project list contains much that is not new. It's mostly a new way of packaging up garbage like the Burnside-Couch couplet, getting federal funding for part of it, and then borrowing the rest.

The big ticket items are decidedly NOT maintenance, and when the funding falls short, the toys will get built and the maintenance will remain undone. Gibbs Street pedestrian bridge? Don't make me laugh. Merritt Paulson's stadiums will be showing signs of age before you ever walk across that.

So, Amanda. Are you going to stand up against this?

the "stimulus plan" isn't a stimuls plan at all. the stuff Adams is claiming to be "fast tracking" won't move much faster than it would have anyway--and he knows it. it's a "first 100 days" publicity gimmick.

and "new construction jobs" will, at best, be a mix of people already employed taking the new jobs, and of existing positions extending. it's not "5,000 new jobs." Adams knows this, too.

in other words, Adams isn't going to do anything new, but you can count on him taking credit for all the good, and blaming the bad on "well, we just couldn't foresee that."

So, Amanda. Are you going to stand up against this?

I'm seeing her moving slowly and already beginning to pander. I'd hoped she'd be a strong voice in City Council but so far, her efforts have mostly consisted of sound bites praising Adams.

now, I'm beginning to wonder if we won't see a lot of job security maneuvering on the part of Fish and Fritz. both have tried repeatedly and furiously to be on the Council. barring disaster, you can count on both of them to fight hard to stay.

"... arguing over which projects make sense is a reasonable discussion ..." -- Kari C.

"... Isn't this how the Soviet Union collapsed?" -- Ryan C.

(No, the USSR disassembled, into the respective countries and territories which had been forcibly assembled into the Union to begin with -- like taking the Lego toy apart to be Lego blocks again. "Disassembled" as a result of spending the Eurasian land's riches on military force imposing the policy that the respective territories be 'administrated' together ... to form a combined taxable area large enough to yield the overmuch money sufficient, to pay for manufacturing the overwrought military muscle squeezing the regions together (in fear of what's outside the group) ... in extremis until the local pieces were squeezed dry, penniless, lifeless ... local-less.)

Projects, shmojects! You want 'stimulus' and 'jobs'?, then first fix policy. (Which is 'fixed' as cheaply as hiring an intellectual egghead 'philosopher' to 'think up' policy thoughts -- no 'materials' costs. Though sure, first you need (the informative schools of) the infrastructure 'chicken' to lay the 'egghead'; you can't squeeze information out of a 'Top Secret Classified' policy, nor single-minded mind-control Drone Talk-radio, it's sterile, antiseptic, unnatural ... nothing 'hatches.' You've got to lay a few eggs first, before you get one to break, and spill its guts, to make a philosophical (lit., 'love of learning') omelet.)

Brute force is not a durable policy to make your way (and 'projects') in the world. Eventually the brute gets exhausted; (all the crude oil 'steroids' is used up, all the metal ores are mined out of the Earth, all the cross-cultural pollination necessary for fertility is lost when one MasterRace monoculture murders everyone else and ends up alone on the planet and singular: sterile -- you can't rub two sticks together when you only got one stick).

One Laptop Per Child -- now that's a policy for organic longevity, procreating fertile imaginations.

Repeal the War on Homegrown Garden-variety Drugs, (also, start war on pills, and 'nationalism pill' pushers); and, by a policy of No Policy, allow anybody to cultivate hemp, spawn fungi, brew malts, distill spirits -- to test and trade and tax. There's your (localself-employment) 'jobs' and 'stimulus'; hatched.

One Laptop Per Child and grow hemp to tax are just two concrete 'policy ideas' off the top of my head. Reserving the right to revise and extend my remarks and maybe think of more later ... what does it pay?

---
[I'm fairly sure Sam Adams is informed enough to appreciate the better value of policy, as opposed to 'projects.' Some of the Drone Talk comments here sound suffering in small-minded 'gay bashing.']

Its unsurprising that ersatz liberals (like Kari Chisholm) are sanguine about the transfer of more largess to fat-cat developers and their vapid sycophants at city hall. People who support these beautification projects for the "creative" class make me sick.

For the record, I don't support the "transfer or more largess to fat-cat developers" or "beautification projects for the 'creative' class".

In fact, what I wrote above was: "Now, arguing over which projects make sense is a reasonable discussion, of course."

Personally, I think potholes should be high on the list. Maybe even paving all those stupid unpaved streets scattered all over town.


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Beverly Cleary - A Girl from Yamhill, a Memoir
Kent Haruf - Plainsong
Hope Larson - A Wrinkle in Time, the Graphic Novel
Rudyard Kipling - Kim
Peter Ames Carlin - Bruce
Fran Cannon Slayton - When the Whistle Blows
Neil Young - Waging Heavy Peace
Mark Bego - Aretha Franklin, the Queen of Soul (2012 ed.)
Jenny Lawson - Let's Pretend This Never Happened
J.D. Salinger - Franny and Zooey
Charles Dickens - A Christmas Carol
Timothy Egan - The Big Burn
Deborah Eisenberg - Transactions in a Foreign Currency
Kurt Vonnegut Jr. - Slaughterhouse Five
Kathryn Lance - Pandora's Genes
Cheryl Strayed - Wild
Fyodor Dostoyevsky - The Brothers Karamazov
Jack London - The House of Pride, and Other Tales of Hawaii
Jack Walker - The Extraordinary Rendition of Vincent Dellamaria
Colum McCann - Let the Great World Spin
Niccolò Machiavelli - The Prince
Harper Lee - To Kill a Mockingbird
Emma McLaughlin & Nicola Kraus - The Nanny Diaries
Brian Selznick - The Invention of Hugo Cabret
Sharon Creech - Walk Two Moons
Keith Richards - Life
F. Sionil Jose - Dusk
Natalie Babbitt - Tuck Everlasting
Justin Halpern - S#*t My Dad Says
Mark Herrmann - The Curmudgeon's Guide to Practicing Law
Barry Glassner - The Gospel of Food
Phil Stanford - The Peyton-Allan Files
Jesse Katz - The Opposite Field
Evelyn Waugh - Brideshead Revisited
J.K. Rowling - Harry Potter and the Sorcerer's Stone
David Sedaris - Holidays on Ice
Donald Miller - A Million Miles in a Thousand Years
Mitch Albom - Have a Little Faith
C.S. Lewis - The Magician's Nephew
F. Scott Fitzgerald - The Great Gatsby
William Shakespeare - A Midsummer Night's Dream
Ivan Doig - Bucking the Sun
Penda Diakité - I Lost My Tooth in Africa
Grace Lin - The Year of the Rat
Oscar Hijuelos - Mr. Ives' Christmas
Madeline L'Engle - A Wrinkle in Time
Steven Hart - The Last Three Miles
David Sedaris - Me Talk Pretty One Day
Karen Armstrong - The Spiral Staircase
Charles Larson - The Portland Murders
Adrian Wojnarowski - The Miracle of St. Anthony
William H. Colby - Long Goodbye
Steven D. Stark - Meet the Beatles
Phil Stanford - Portland Confidential
Rick Moody - Garden State
Jonathan Schwartz - All in Good Time
David Sedaris - Dress Your Family in Corduroy and Denim
Anthony Holden - Big Deal
Robert J. Spitzer - The Spirit of Leadership
James McManus - Positively Fifth Street
Jeff Noon - Vurt

Road Work

Miles run year to date: 280
At this date last year: 129
Total run in 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269


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