A Question for the Future
By Scott R. Cooper, Crook County Judge
first published in the Central Oregonian of Prineville, February 2008
Did you ever check out the fine print on your retirement account statement or on the bottom of a brokerage account statement? Inevitably, these documents always contain the magic words: “Past performance is no guarantee of future results,” The phrase applies to local economies as well as to stock market performance.
I was reminded of this again review this week’s advance sheet announcing yet another increase in Crook County’s unemployment numbers, which rose to 9.5 percent at the end of January.
How is it possible that only a year ago we were boasting the lowest unemployment rates since the 1960s and the fifth fastest growing rate of employment in the state? What happened?
In short, the real estate market collapsed, and with it went Crook County’s economy.
Crook County is highly sensitive to swings in the national, state and local housing market. Direct employment in the construction trades provides about 5 percent of Crook County’s employment base. But that’s just the tip of the iceberg: Employment in Crook County‘s wood products manufacturing sector, which is heavily dependent on a healthy housing market, accounts for 14 percent of the county’s workforce. Eliminate these two sectors, and nearly one in five jobs disappears.
And that’s without counting the indirect jobs associated with the construction industry—transportation jobs, retail sales jobs, real estate jobs, etc., etc. etc….
If you’re not worried yet, you should be.
The past few years have treated Crook County extraordinarily well. Many of our long-time citizens cashed in on rising land prices to salt away nest eggs, secure retirements and fund new business ventures. The downtown roared to life with new businesses and improved shopping and the number of business units increased by 50 percent between 2000 and 2006. Bank deposits soared, public services improved, cultural offerings increased. State and regional newspapers hailed our community as an Oregon “hot spot”, and other communities paid visits to find out what we were doing so they might copy.
Then came the crash--not because of anything we did wrong as a community but because we were victimized by the burst of the national housing bubble, the emergence of the subprime market crisis, rising fuel prices and a panicky financial industry. But while none of these things were our fault, it is our responsibility to ask ourselves now, “What’s next?”
In the next few months, we as a community are going to have to address some stark questions: What are we willing to trade to secure an economic future? Should the welfare of many be sacrificed to quell the fears of the few? Can a limited-growth environment co-exist with a healthy economy? These are issues worth pondering as you consider how to mark your ballot for candidates and measures in May.
I personally view growth as a goose that continues to lay golden eggs. I think that progress by its very nature demands change, as hard as that may be for some people to accept. In the history of the world, there has never been a more efficient system for allocating resources than the forces of market capitalism and its power to direct resources to their highest and best use is undeniable.
Conversely, tampering with the laws of supply and demand risks artificially interrupting these forces and poses grave risks to a community’s economic health. Whether through ballot-driven efforts to eliminate certain industries or government-led efforts to interfere in private-sector decisions about how to define what is pretty, the community and its economic future is placed at risk when government and/or voters interfere with the logical progression of market forces.
Crook County finds itself at a crossroads. Some of our citizens have concluded that the past few years are the model of where the community will go in the future, and they believe it is imperative to slow the progress down in order to keep the community from changing so fundamentally that it becomes unrecognizable. Others, I among them, believe that the experience of the past few years has been an anomaly and that government should be slow and deliberate about doing anything that will tie an anchor to the legs of our progress and risk stopping it altogether.
As you decide in the next few months which of these camps you fall into, just remember the investment banker’s motto: “Past performance is no guarantee of future results,” and vote accordingly.
first published in the Central Oregonian of Prineville, February 2008
Did you ever check out the fine print on your retirement account statement or on the bottom of a brokerage account statement? Inevitably, these documents always contain the magic words: “Past performance is no guarantee of future results,” The phrase applies to local economies as well as to stock market performance.
I was reminded of this again review this week’s advance sheet announcing yet another increase in Crook County’s unemployment numbers, which rose to 9.5 percent at the end of January.
How is it possible that only a year ago we were boasting the lowest unemployment rates since the 1960s and the fifth fastest growing rate of employment in the state? What happened?
In short, the real estate market collapsed, and with it went Crook County’s economy.
Crook County is highly sensitive to swings in the national, state and local housing market. Direct employment in the construction trades provides about 5 percent of Crook County’s employment base. But that’s just the tip of the iceberg: Employment in Crook County‘s wood products manufacturing sector, which is heavily dependent on a healthy housing market, accounts for 14 percent of the county’s workforce. Eliminate these two sectors, and nearly one in five jobs disappears.
And that’s without counting the indirect jobs associated with the construction industry—transportation jobs, retail sales jobs, real estate jobs, etc., etc. etc….
If you’re not worried yet, you should be.
The past few years have treated Crook County extraordinarily well. Many of our long-time citizens cashed in on rising land prices to salt away nest eggs, secure retirements and fund new business ventures. The downtown roared to life with new businesses and improved shopping and the number of business units increased by 50 percent between 2000 and 2006. Bank deposits soared, public services improved, cultural offerings increased. State and regional newspapers hailed our community as an Oregon “hot spot”, and other communities paid visits to find out what we were doing so they might copy.
Then came the crash--not because of anything we did wrong as a community but because we were victimized by the burst of the national housing bubble, the emergence of the subprime market crisis, rising fuel prices and a panicky financial industry. But while none of these things were our fault, it is our responsibility to ask ourselves now, “What’s next?”
In the next few months, we as a community are going to have to address some stark questions: What are we willing to trade to secure an economic future? Should the welfare of many be sacrificed to quell the fears of the few? Can a limited-growth environment co-exist with a healthy economy? These are issues worth pondering as you consider how to mark your ballot for candidates and measures in May.
I personally view growth as a goose that continues to lay golden eggs. I think that progress by its very nature demands change, as hard as that may be for some people to accept. In the history of the world, there has never been a more efficient system for allocating resources than the forces of market capitalism and its power to direct resources to their highest and best use is undeniable.
Conversely, tampering with the laws of supply and demand risks artificially interrupting these forces and poses grave risks to a community’s economic health. Whether through ballot-driven efforts to eliminate certain industries or government-led efforts to interfere in private-sector decisions about how to define what is pretty, the community and its economic future is placed at risk when government and/or voters interfere with the logical progression of market forces.
Crook County finds itself at a crossroads. Some of our citizens have concluded that the past few years are the model of where the community will go in the future, and they believe it is imperative to slow the progress down in order to keep the community from changing so fundamentally that it becomes unrecognizable. Others, I among them, believe that the experience of the past few years has been an anomaly and that government should be slow and deliberate about doing anything that will tie an anchor to the legs of our progress and risk stopping it altogether.
As you decide in the next few months which of these camps you fall into, just remember the investment banker’s motto: “Past performance is no guarantee of future results,” and vote accordingly.
posted by Scott Cooper | 11:10 PM
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