2020: Will the mainstream media make a difference?

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There’s a lot of tortured handwringing going on among the mainstream media about how they covered the 2016 presidential race and what they need to do to fix things for 2020.

“…we have a chance to do things differently than we did the last time around – to redeem ourselves,” columnist Frank Bruni opined in The New York Times on Jan. 13, 2018. “Our success or failure will affect our stature at a time of rickety public trust in us.”

Bruni’s column focused on the role of the “mainstream, establishment media” and its responsibility to clean up its act, to avoid writing about the spectacle and cover, instead, substance, fitness for office and competing visions of government.

Sounds all very serious and high-minded. But Bruni’s angst is too late.

The fact is, what the mainstream, establishment print and television media have to say about politics simply doesn’t matter as much anymore because people are going elsewhere to find out what’s going on and what people think about it.

“The conversation that should concern everyone, in both media and politics, is not about what gets covered,” Peter Hamby recently wrote in Vanity Fair.  “It’s about what gets attention.”

“At a time when technology is transforming voter behavior at unprecedented speed, this is a problem that the mainstream media, even on its best behavior, cannot possibly solve without a drastic reimagining of what journalism is and how it reaches contemporary audiences.”

Diminishing influence

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In 1950, almost every American household read a daily newspaper

In 1950, almost every American household read a daily newspaper. By 2000, only 50 percent of Americans read a printed newspaper on a daily basis.

As I write this in Jan. 2019, I’m sitting at a large, bustling coffee shop. A couple dozen people of all ages are busily engaged at their laptops. Not a single person is reading a newspaper.

The fact is fewer Americans read a daily newspaper today than in 1950, while the U.S. population has more than doubled. And the prognosis isn’t good. With just 2 percent of teenagers reading a newspaper on a regular basis, few are developing a newspaper reading habit.

Unlike the individualized, algorithm-determined, constantly updated news delivered to consumers online, print newspapers offer identical mass communications to their customers. And by the time the news in print newspapers reaches the intended audience, not only is it stale, but it has been superceded by newer news.

During the 2016 election, a survey of U.S. adults by the Pew Research Center revealed  that print versions of both local and national newspapers were named as key sources for election news and information by only 3% and 2% of respondents respectively. Late night comedy shows did just as well as sources at 3%.  (Maybe that explains why Sen. Kirsten Gillibrand (D-NY) announced she was forming a presidential exploratory committee during a Jan. 15 appearance on “The Late Show with Stephen Colbert”)

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And even if you did read print newspapers during the election, policy issues — what the nominees would do if elected—got little press coverage in print outlets. In the 2016 general election, policy issues accounted for just 10 percent of the news coverage—less than a fourth the space given to the horserace between the candidates, according to a Shorenstein Center study.

And even if you did read print newspapers during the election, policy issues — what the nominees would do if elected—got little press coverage in print outlets. In the 2016 general election, policy issues accounted for just 10 percent of the news coverage—less than a fourth the space given to the horserace between the candidates, according to a Shorenstein Center study.

All this has translated into a drastic reduction in the influence of newspaper editorial endorsements.

“Once upon a time, a newspaper endorsement for a political candidate was about as good as it got,” Philip Bump wrote in the Washington Post  a couple weeks before the 2016 election. “In the era before the internet…big, important newspapers could shift the fortunes of people seeking the presidency. Nowadays, that’s … less of the case.”

Of the 269 U.S. newspapers that dispensed their wisdom by endorsing a presidential candidate in 2016, 240 endorsed Hillary Clinton and just 18 endorsed Donald Trump. Libertarian Gary Johnson secured nine endorsements and independent conservative Evan McMullin got one.

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Of the top 100 largest newspapers in America with the largest circulations, just two endorsed Trump,

As Politico media reporter Hadas Gold tweeted when Trump’s stunning victory became clear, “… newspaper endorsements DO NOT MATTER.”

That may be partly due to slipping public respect for the mainstream media.  In a Pew Research Center survey taken shortly after the November 2016 balloting, only one in five respondents gave the press a grade of “B” or higher for its performance. Four of five graded its performance as a “C” or lower, with half of them giving it an “F.”

Declining newspaper circulation

Much of the waning influence of print newspapers can also be attributed to circulation declines (or the reverse).

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In 1960, nearly 120 percent of households bought a daily newspaper (i.e. there were 1.2 papers sold per household). By 2017, fewer than 30 percent of households bought a daily newspaper.

In 1990, circulation of U.S. daily newspapers totaled 62.3 million weekday and 62.6 million Sunday. By 2009, circulation had sunk to 55.8 million daily and 59.4 million Sunday.

According to the Pew Research Center, in 2016, despite the excitement and turmoil of the national elections, weekday and Sunday circulation for U.S. daily newspapers – both print and digital – fell 8%, marking the 28th consecutive year of declines. Weekday circulation fell to 35 million and Sunday circulation to 38 million – the lowest levels since 1945.

The following year, the first of Tump’s term, was equally discouraging. Estimated total U.S. daily newspaper circulation (print and digital combined) in 2017 was 31 million for weekday and 34 million for Sunday, down 11% and 10%, respectively, from 2016.

Some of that decline is because the United States has lost almost 1,800 papers since 2004, including more than 60 dailies and 1,700 weeklies, leaving 7,112 in the country, according to The School of Media and Journalism at UNC.

California lost the most dailies of any state. In one case, the 140-year-old, 500-circulation Gridley Herald used to serve Gridley (population 6,000) in the central California county of Butte, 60 miles from Sacramento. On Aug. 29, 2018, the paper’s staff and the community were notified by the paper’s owner, GateHouse Media, that the final issue of the twice-weekly paper would be published the next day.

Daily newspaper circulation in California totaled about 5.7 million 15 years ago. In 2018, that was cut in half to 2.8 million.

If print circulation continues to drop at current rates, as many as one-half of the nation’s surviving dailies will no longer be in print by 2021, predicts Nicco Mele, director of the Shorenstein Center for Media, Politics and Public Policy at Harvard University..

One of the most striking examples of decline is in Silicon Valley. The San Jose Mercury News, rebranded as The Mercury News in 2016, was once an influential publication with about 400 reporters, editors, photographers, and artists.

According to The Columbia Journalism Review, the Mercury News was one of the first daily newspapers in the U.S. with an online presence, the first to put all its content on that site, the first to use the site to break news, and one of the first to migrate its growing online content to the web.

Its commitment to innovation and hard news led to daily circulation of 200,258 in 2009 making it the fifth largest daily newspaper in the United States.

But subsequent years of bad business decisions, declining classified advertising (including job listings), layoffs, McClatchy’s purchase of the paper’s owner, Knight Ridder, in 2006, and the subsequent sale of the Mercury News to the MediaNews Group caused the paper to slip. “…sadly the San Jose Merc is a mere shadow of its former self,” commented one online reviewer.

Not that long ago, the San Jose paper proclaimed itself “The Newspaper of Silicon Valley,” media business analyst Ken Doctor wrote in Newsonomics. “Silicon Valley has done quite well, becoming the global economic engine and driving great regional affluence. But the economically fecund region has become — in less than a decade — a news desert.”

Here at home, The Oregonian, a paper with a long and storied history, is a story of decline, too.

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The Oregonian Building, at the corner at the intersection of S.W. Sixth and Alder, occupied by the paper during 1892-1948.

In 1950, when Advance Publications bought the paper, its daily circulation was 214,916. For quite a while, things looked promising.

I joined The Oregonian as a business and politics reporter in 1987. It was a robust, well-respected paper, with a proud past and a much-anticipated future. Daily circulation was 319,624; Sunday circulation 375,914.

When I left the paper 10 years later in 1997 to take a corporate communications job, daily circulation was 360,000, Sunday circulation 450,000. It looked like the paper was on a roll.

But good times were not ahead. By 2012, daily circulation had sunk to 228,599, only slightly higher than in 1950. In subsequent years, daily circulation continued to slump, despite robust population growth in the Portland Metro Area.

Meanwhile, talented reporters have fled in droves, some pushed out, others motivated by buy-outs. At the same time the once powerful paper’s clout has diminished as it has abandoned rural Oregon and 7-day-a-week print distribution.

By 2018, The Oregonian had a print circulation of just 158,000 and distributed  to 15 fewer counties in Oregon and Washington than it did in 2004, when it had a circulation of 338,000, according to a UNC report on The Expanding News Desert.

A few smaller local Oregon papers are thriving, but most are suffering, too. And all of them have a tough time covering state and national politics consistently and with any depth.

Oregon Public Broadcasting OPB recently reported that Western Communications, which owns seven newspapers across the West, including the Bulletin in Bend, the Baker City Herald and the La Grande Observer, “is on the brink of foreclosure.” The company hasn’t paid nearly $1 million owed in local property taxes and interest and is between three and five years behind on taxes in counties across Oregon, OPB reported.

Comprehensive political coverage by the Eugene Register Guard is threatened, too. On March 1, 2018, GateHouse Media, the same company that closed the Gridley Herald, acquired the Register Guard, which had survived more than 90 years of independent, family ownership.

GateHouse publishes 130 daily newspapers. It has a reputation for tightfisted financial management accompanied by staff layoffs. It’s impact on the Register Guard has fit that pattern. In Dec. 2017, before the GateHouse takeover, the editorial and news staff at The Register-Guard totaled 42, according to the paper’s staff directory. Today the directory lists 27, of which just 12 are identified as reporters..

Not only has the Register Guard staff shrunk; so has its daily circulation, dropping from 54,325 in 2011 to 41,280 today.

“What’s happening with the Guard isn’t unique to the Guard,” Tim Gleason,professor and former dean at the University of Oregon School of Journalism and Communication, told the Eugene Weekly. “It’s what’s happening all over the country as these venture capital firms buy newspapers and then largely gut them.”

Of course, newspapers are being gutted whether or not they are investment targets.

In early January 2019, the Dallas Morning News eliminated 43 jobs, according to the Columbia Journalism Review, half of them in the newsroom, with the cuts  hitting reporters covering immigration, transportation, the environment, and the courts.

On Friday, February 1, The McClatchy Company, which owns properties such as the Miami Herald and the Kansas City Star, emailed staffers to announce that 450 employees would be offered voluntary buyouts as part of a “functional realignment,” essentially signaling that the jobs have been marked out of the budget. The news was first reported by the Miami New Times.

If print newspaper circulation across the board continues to drop at current rates, as many as one-half of the nation’s surviving dailies will no longer be in print by 2021, predicts Nicco Mele, director of the Shorenstein Center for Media, Politics and Public Policy at Harvard.

None of this is good news if you want an educated, informed public in a position to make wise judgments about public policy.

“The way to prevent irregular interpositions of the people is to give them full information of their affairs through the channel of the public papers, and to contrive that those papers should penetrate the whole mass of the people,” wrote Thomas Jefferson in 1787.

That is as true today.

How about network television news?

Given the decline of local print media, local network TV news is one of the few remaining sources of locally-focused journalism covering political issues, but local TV news has been experiencing declines as well.

Just from 2016 to 2017, the portion of Americans who often rely on local TV for their news fell 9 percentage points, from 46% to 37%, according to the Pew Research Center. Still, local tv news shows have multiple opportunities to cover educate their audience. The problem is that covering public policy is rarely their forte and it’s not what their audience is seeking.

Instead, local TV news is the outlet of choice by adults for weather, breaking news and traffic reports, although young adults are more likely to turn to the Internet, according to Pew Research.

Public policy and politics coverage is also suffering with a decline in the audiences for the national network news shows of NBC, ABC and CBS, although some scholars believe television news viewing has little effect on issue learning. In other words,  watching increasing quantities of television news will not lead to greater knowledge about political issues because of the paucity of real issue information. You may know more about polls and personalities, but not so much about political issues that affect your life.

Remember when the family used to gather in the living room every night for the evening news, either the Huntley-Brinkley Report, CBS Evening News with Walter Cronkite or ABC Evening News with Frank Reynolds and Howard K. Smith? That was so long ago.

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All three network evening news shows have been losing audience steadily since then. By 1998, the three network evening newscasts reached a combined average of only about 30.4 million viewers in a country with a population of 276 million.

In 2016, even with a turbulent presidential campaign, the average viewership for the ABC, CBS and NBC evening newscasts was 24 million, according to a Pew Research Center  analysis.

Compare that to the ratings of a single showing of 2016’s number one primetime TV show, The Big Bang Theory, which averaged 19.9 million viewers, or with Super Bowl 50 on Feb. 7, 2016, which got 112.6 million average viewers, according to Nielsen.

By the 2017-18 television season, ABC’s evening news had an average of 8.6 million viewers, NBC Nightly News 8.15 million and CBS Evening News 6.2 million. That’s a total of 22.95 million.

 

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Lonesome Rhodes, a master manipulator.

In Elia Kazan’s classic movie “A Face in the Crowd,” Lonesome Rhodes, played brilliantly by Andy Griffiths, rises from an itinerant Ozark guitar picker to a local media rabble-rouser to TV superstar and a political power. “I’m not just an entertainer. I’m an influence, a wielder of opinion, a force… a force!”, he exclaimed at one point.

Newspaper publishers and TV news anchors may once have felt the same way, but their days are numbered.

This doesn’t mean, however, that the demand for news is going to collapse. It just means there’s going to be a need for more imagination in formatting and delivering it in ways that grab an audience and rewards them for their attention.

Vanity Fair’s Peter Hamby cited a twice-daily news show produced by NBC that runs on Snapchat. According to Digiday, the brief show, Stay Tuned, was created specifically for the vertical-screen mobile experience. In 2018, Stay Tuned averaged 25 – 35 million unique viewers per month on Snapchat, according to data provided to NBC News by Snap. Only one-third of that audience also watches, reads or listens to NBC News content on other platforms, so two-thirds are a new NBC audience.

To top it off, about 75 percent of the “Stay Tuned” audience is under 25 and 90 percent is under 34, according to Snapchat, a significant accomplishment given that reaching younger audiences has provers to be a challenge for traditional print and network TV.

So the future isn’t all grim. It will just be different.

 

 

 

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Merkley’s perjury charge: much ado about nothing

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Jeff Merkley, Oregon’s junior senator and potential aspirant for the Democratic presidential nomination, got the media publicity he wanted when he asked the FBI on Friday to open a perjury investigation into Homeland Security Secretary Kirstjen Nielsen.

In a press release posted on his website, Merkley said he asked for the investigation “…after new documents show that Nielsen lied in sworn testimony to Congress about the administration’s family separation policy.”

To add to the allure of his charge, Merkley said he obtained the incriminating document from a whistleblower,

Following up on his press release, Merkley tweeted:

“I’m formally requesting that the @FBI investigate whether @SecNielsen committed perjury during her testimony under oath before @HouseJudiciary. The memo I released yesterday flat-out contradicts her statement that there was no child separation policy.”

But there’s one problem. The document, which Merkley said proved his case, proves no such thing.

The document, available here, is, in fact, quite clearly a draft of options, with multiple comments and suggested edits. Titled “Policy Options to Respond to Border Surge of Illegal Immigration,” it lays out options for dealing with 16 issues, including: Increase prosecution of family unit parents; Separate family units; Adjudication of cases in immigration court; and Interpretation of special immigrant juvenile visas.

As Roll Call, a newspaper and website that reports news of legislative and political maneuverings on Capitol Hill, has reported, the memo shows that “…officials from the Departments of Justice and Homeland Security were exploring (emphasis added) family separation polices as a deterrent for illegal immigrants…”

In the same vein, the New York Times reported the document “…showed that Ms. Nielsen’s staff considered a range of options for dealing with the influx of families seeking asylum, including a policy that would ‘separate family units.’ “

A spokeswoman for the Homeland Security department also has denied Merkley’s charges. “What this predecisional, predeliberative memo — as well as previously leaked predecisional, predeliberative documents — shows is that the secretary was provided a menu of options to prevent the humanitarian crisis we predicted at that time and which has manifested itself today,” the spokeswoman, Katie Waldman, said to the New York Times in an email.

So Merkley ginned up a controversy out of thin air. But what the hell, he got a lot of media coverage. Isn’t that what it’s really all about?

Gov. Kate Brown’s 2019 inaugural address (annotated to reflect reality)

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Gov. Kate  Brown delivering inaugural address, Jan. 14, 2019

Good afternoon everyone. (At least I can say that with a straight face.)

Thank you all so much for being here. (And, boy, am I glad to be here, instead of at home because I lost to that rich dude, Knute)

Senate President Peter Courtney, Speaker Tina Kotek, thank you. (Yea, we got a supermajority this time, so we can raise taxes like crazy. People don’t call me “Governor Gimmee” for nothing.)

To our Tribal Chairs and leaders, welcome. (Keep those campaign contributions coming and I’ll do what I can to help you. But, by the way, I see Confederated Tribes of Grand Ronde, operator of the Spirit Mountain Casino, donated only $55,000 to the Kate Brown Committee. You can do better. You folks are rolling in dough.)

To newly elected legislators, congratulations and welcome. (Sorry, but this doesn’t include you, Rep. Cheri Helt R-Bend, or any of your weenie Republican colleagues)

It’s an incredible honor to serve Oregon for four more years. (And, whew, now I don’t have to look for a job)

Today is a little bittersweet for me, as this ceremony marks my final four years as governor of (Oregon (That’s 1460 days, you sad sack Republicans). But, aside from how this feels for me (Am I looking humble enough?), this is an important moment for our state.

In many ways, Oregon is progressing (See how I snuck in “progressive”?) on ground that many of our neighbors wish they could tread. (Except, of course, for our gigantic unfunded PERS liabilities, our embarrassing high school graduation rate, homeless people camping and using drugs all over the place, an affordable housing crisis, unbearable traffic congestion in the Portland Metro Area, a broken state foster care system, and so on.)

Our unemployment rate is the lowest on record.

We have one of the fastest job growth rates in the country.

And in November, Oregonians defeated ballot measures that would have moved us backwards. Together, we used our vote to affirm Oregon values.

In many ways we stand alone. (What does that tell you?)

For years we have struggled to overcome the impacts of recession on our state revenue, to build up adequate funding for our education system, and stabilize access to health care.

For many families, the cost of housing, health care, child care, and higher education are all outpacing wage growth. (So forget about any cost-saving efforts or consideration of efficiencies. instead, we’re going to tax everybody and their brother to within an inch of their life, because that’s what we Democrats do, folks.)

And all of this is against the backdrop of a federal government that has never been in more disarray. (Like my dig at Trump?)

Now is the time to put our state on a better path forward.

The first step is to ensure that our democracy is strong. And fight every effort to undermine it.

Voting is our country’s greatest collective responsibility, and we must vigorously safeguard the sanctity of our elections. While our elections institutions are amongst the best in the nation, we have more work to do to ensure that every single voice is heard.

I will work for campaign finance reform, fight for paid postage on our ballots, and expand our automatic voter registration system. (Yeah, I know, I’ve promised campaign finance reform  before and nothing has changed. Ignore the fact that Democrats have held the governorship since 1992 and the House and Senate since 2013, so I suppose we could have successfully tackled this issue before now if we were really serious about it)

I’d welcome your help. (Particularly your hard-earned money)

While other states are rolling back voting rights, Oregon is leading the way.

Vote by mail and Oregon’s motor voter have made it so that we have one of the highest voter participation rates in the country.

But when it comes to campaign finance, we are still the wild wild west. This needs to end. (Please ignore the fact that, as Forbes has pointed out, I’ve embraced the highly unethical practice of soliciting campaign cash from state contractors and that OpentheBooks.com found 557 state vendors gave $2.6 million in political donations to me– as secretary of state and governor – since 2012, while reaping $4.4 billion in state payments.)

No one should be able to buy a megaphone so loud that it drowns out all the other voices. (Are ya listening, Phil? By the way, please pay no attention to the large contributions I received in 2018 from labor unions (SEIU PACS- $500,000; Oregon Education Association PAC – $200,000; AFSCME – $100,000; American Federation of Teachers – $100,000; United Food & Commercial Workers, AFL/CIO – $100,000), Michael Bloomberg’s gun control non-profit –  $500,000, the pro-choice political action committee Emily’s List – $750,000), and the Democratic Governor’s Association – $1,025,000)

Next, we are facing an affordability crisis in health care and housing that needs to be addressed immediately.

Health care is a fundamental right. (Isn’t everything?)

Because of the work we’ve done to expand the Oregon Health Plan, today 94 percent of adults have access. (Please ignore the fact that Oregon’s Medicaid spending has experienced explosive budget-busting growth, posing extreme fiscal challenges. You see, Obamacare called for states to expand Medicaid to low income adults and provided federal funds to cover 100 percent of the costs of the newly eligible people from 2014 through 2016. The federal matching rate was then set to decrease over the next four years to 90 percent in 2020. Oregon’s legislature even went so far as to extend Medicaid to children brought to the United States illegally. Coverage began at the start of this year)

And because of the work we did to pass Cover All Kids, every single one of our children has access. (Including, by the way, an estimated 14,000 children of undocumented residents. The cost of extending health care to these children during an 18 month-period that started on Jan. 1, 2018 was projected to total $36.1 million, according to the state Department of Administrative Services. Sure, all this could be medical malpractice at the expense of all you U.S. citizens, but that’s not my problem. Besides, it let me appeal to my liberal base).

Let’s work together to make sure every Oregonian has the health care they need. (No expense is too much, right?)

We can’t keep doing the same thing expecting a different result, which is why I’m going to ask you to try something new.

If you approve a $20 million bonding package early this session, we can speed up construction of 200 units of permanent housing for the chronically homeless.

We also need to help Oregonians who have homes but are struggling with the high cost of rent. When problems arise, they need technical assistance to stay in their homes and not end up on the streets. We can help landlords and tenants navigate this tight housing market.

Speaker Kotek and Senator Burdick have innovative proposals that will give renters some peace of mind. (Ok, you and I know their rent control idea will be counterproductive, but lots of leftists want this and they don’t know economics. I read somewhere that “next to bombing, rent control is the most effective technique so far known for destroying cities.” Please don’t challenge me with quotes like that. And don’t bring up that researchers, using new data tracking individuals’ migration in San Francisco, found that rent control “increased renters’ probabilities of staying at their addresses by nearly 20%.” That meant apartment turnover went down. People with changing circumstances who would normally seek out other housing stayed where they were. That reduced the availability of their apartments to prospective new tenants. The researchers also found that landlords subject to rent control reduced rental housing supply by 15%, actually causing city-wide rent increases.)

Oregon families are counting on us. (Or at least current renters. People looking for new rental properties, maybe not so much)

\During my entire time as Governor, I have focused on spending every taxpayer dollar wisely. (Oops. Is my nose growing longer? I hope you’ve forgotten about such things as: the waste and incompetence at the Oregon Health Authority; how the Oregon Office of Emergency Management misspent $3 million in federal grants, triggering an audit and leaving the agency in the red;  that Oregon’s government waste hotline has been a waste of money; that for the past 13 years, Oregon government ignored its own requirement that large state agencies should have internal auditors keeping track of spending and rooting out waste and inefficiency.)

I am focused on several important items this session. And I put them in my budget.

First, adding internal auditors (I know, it’s about time, after 13 years), who will ensure that every state agency is delivering the level of service that Oregonians expect while saving every penny they can along the way.

Second, eliminating backlogs and decreasing wait times in critical areas, like child-care licensing and food safety inspections.

Third, modernizing the way we deliver services and purchase goods. We can save taxpayer dollars if we streamline the way state government does business. Especially by implementing a new centralized procurement system.

While we tackle today’s pressing fiscal challenges (I know, I’m not really tackling PERS, but what the hell), we also must address the challenges of our future.

Today, we stand at a turning point, with an opportunity to put Oregon on a better path forward.

I look forward to signing our clean energy jobs bill this session. (And I’m really looking forward to the $700 million a year the program is going to generate. Oh boy, oh boy!)

Higher education also needs to be more affordable and more accessible to Oregon families. The good news is, our current strong economy gives us the best chance in a generation to address persistent, structural challenges in our education system. The time is now. If we wait, we’ll only fall further behind when the economy eventually falters. (So let’s pass big tax increases now, when the economy is good, that Oregonians will have to pay when the economy sours in 2020)

At one time, every Oregonian was proud of our education system. It was a promise that if you chose to put down roots in Oregon, your children would receive a world-class education and have the opportunity to achieve their dreams. But over the past couple of decades we have failed to deliver on that promise. (Sure, I know we Democrats have been in charge for most of that time, but I don’t want to remind you of that)

How our state provides for the needs of our children is a marker of who we are as a community. After years of underinvestment, it’s going to take more than just additional funding to bring our schools back to a level we can be proud of.  (I have to admit, though, that I’m not sure when that proud period was. The four-year cohort graduation rate was 66.4% in 2010, 66% in 2000, 71.65% in 1990, the year Oregon voters passed Ballot Measure 5)  

We have failed our students of color and we have left rural Oregon behind. Now is the time to close that opportunity gap. (Ah ha, I’ve discovered rural oregon, which voted across the board for Knute Buehler)

Our education system is in desperate need of repair, reform, and reinvestment. It’s like an old house that hasn’t been maintained. The longer we wait, the more it will cost to fix it.

I will work with you, the business community, teachers, and parents to fund K-12 schools at a level that ensures our districts aren’t forced to make cuts. (But mostly I will work with the education unions and Nike. You see, in late November 2018, they got together to launch a coalition to push an expansive tax package through the legislature without any commitment to address problems with PERS. A lot of Oregonians who voted for me and other Democrats in November 2018 probably didn’t realize they were voting to raise their taxes big time. Too bad. A tsunami of taxes is about to wash over the state and wreak havoc with Oregonians’ budgets. if you’ve seen your pay go up because of Trump’s tax overhaul (which, by the way, Democrats in Congress want to roll back) or a pay raise, get ready to see your gains disappear down a tax rat hole. You gotta love it.)

My budget also includes resources to stabilize PERS rates for schools. This is in addition to the dedicated investments we began last year.

The unfunded liability in PERS is not going away. We must accelerate our work to stabilize PERS rates so that new dollars go directly into the classroom. (Sounds good, huh? But don’t expect any real progress on addressing PERS’ unfunded liability.)

We agree that we need to attract, train, and retain the best teachers in the country.

And we agree that we have to keep tuition affordable and open the doors to higher education. (Did I forget to mention that the share of state money in our state university budgets has been declining for years?)

My expectation is that these investments we’re making in education will improve outcomes for all of our kids. (If they don’t, I’ll be long gone and at least the education unions will be happy. That’s what’s really important after all the money they’ve contributed to my campaigns.)

Urban and rural, Democrat and Republican. We do what we’ve done time and again: put politics aside and serve the people of Oregon. (So long as the solutions are from the progressive grab bag.)

Today we have a choice. Are we willing to do the work to make the dream of a better Oregon come true?

We are.

The time is now. Our future is in front of us. (Isn’t that a terrific meaningless cliché? Or maybe I should have said “the future is now” or “the future is coming”) We have to turn the corner and make it a reality. Together we can build a better Oregon.

Thank you.

Rent control: another bad idea out of Salem

“Next to bombing, rent control is the most effective technique so far known for destroying cities.”   Assar Lindbeck, Professor of Economics

 

Four Civilians Killed by US Airstrikes in Syria's Deir Ezzor

“We have to keep people in their homes.”

That’s what Felisa Haggis, political director of Service Employees International Union Local 49, told Willamette Week in an argument for rent control.

That’s exactly what will happen, more people will stay in their homes longer, if Oregon’s Legislature approves a proposal by the Democrat leadership that would set an annual rent increase cap of 7 percent plus inflation.

A Working Paper just released by the Stanford Graduate School of Business backs up this statement.

But that’s not necessarily a good thing.

Using new data tracking individuals’ migration in San Francisco, researchers found that rent control “increased renters’ probabilities of staying at their addresses by nearly 20%.” That meant apartment turnover went down. People with changing circumstances who would normally seek out other housing stayed where they were. That reduced the availability of their apartments to prospective new tenants.

This was particularly the case with older households and households that had been living in their rent-controlled apartment for a number of years.

Howard Husock, vice president for research and publications at the Manhattan Institute, recently told Pew Trusts  that older people who live in rent-stabilized apartments have no incentive to leave.

“As a result, you’ve got a lot of young people in New York City doubled and tripled up,” Husock said. “And you’ve got affluent old people living in large [rent-stabilized] apartments with empty bedrooms where their kids once lived.”

“Longtime renters who have been living in rent-controlled units benefit greatly from rent control, while newcomers end up paying higher rents because the supply of available units is constricted,” the Working Paper said.

The Stanford researchers also found that landlords subject to rent control reduced rental housing supply by 15%, actually causing city-wide rent increases.

“As a result, you’ve got a lot of young people in New York City doubled and tripled up,” Husock said. “And you’ve got affluent old people living in large [rent-stabilized] apartments with empty bedrooms where their kids once lived.”

The Working Paper explained that landlords facing rent control regulations are more likely to convert units into condos or redevelop buildings to circumvent regulations, such as by demolishing their old housing and building new rental housing exempt from rent control.

This further reduces rental stock and drives up rents. Rent-controlled buildings were almost 10% more likely to convert to a condo or a Tenancy in Common, the researchers found.

Supporters argue rent control is the quickest and easiest way to provide relief to renters in danger of being priced out of their home, but the fact is it just makes the problem worse

In other words, rent control advocates in Salem are actually working against the best interests of a lot of the people they say they want to help.

 

 

 

 

Elizabeth Warren is starting off on the wrong foot

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Sen. Warren in the midst of a crowd in Storm Lake, Iowa

Just like President Trump, Sen. Elizabeth Warren is already fact-challenged.

Shortly after formally entering the 2020 presidential race on Dec. 31, Warren tried to highlight her commitment to the working class in an Iowa stump speech that called for a return to better days:

“When I was a kid, a minimum-wage job in America would support a family of three,” she said. “It would pay the mortgage, it would keep the utilities on; it would put food on the table. Today, a minimum-wage job in America will not keep a momma and a baby out of poverty. Think about that difference.”

Not so fast, Senator.

The fact is the good old days weren’t that good for minimum wage workers and their families.

Warren was born in Oklahoma City, OK on June 22, 1949, the fourth child of middle-class parents Pauline and Donald Jones Herring. She lived in Norman, OK until she was 11 years old, so she would have been a child of 10 there in 1959.

The federal minimum wage in 1959 was $1 an hour. A worker earning that amount and working 40 hours a week would have earned $2,080 a year.

Median family income in the United States in 1959 was $5,650, according to the U.S. Census. Mississippi took the honor of being the state with the lowest median family income, $2,884.

Oklahoma’s median income came in at $4,620 and Cleveland County, where Norman, OK is located, had a median family income of $5,067.

In other words, a family with one member employed full time and earning a minimum wage of $2,080 a year would have been hard-pressed to “pay the mortgage,…keep the utilities on; (and) put food on the table.”

In fact, families of three with an annual income of $2,080 and families of four with an annual income of $2973 would have been considered to be living in poverty in 1959, according to the U.S. Census Bureau.

The reality? A family with one wage earner working full time for a minimum wage in 1959 wasn’t really much better off than a similar family today.

Somebody working full-time at today’s federal minimum wage of $7.25 an hour earns just $15,080 a year – below the poverty line for even a family of two and $9,000 below the $23,850 poverty level for a family of four.

So, before she gets too nostalgic for the good old days, and before she makes another stump speech in her presidential campaign, Sen. Warren needs to do some homework.

 

 

 

 

 

Dear Oregon taxpayers: Nike is not your friend

Oregon business leaders voted Nike, Inc. Oregon’s Most Admired Company Across all Industries in 2018.

Given Nike’s history of gaming Oregon’s tax system, it’s hard to understand why.

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Nike has been skilled at staying ahead of the taxman in  Oregon.

Nike’s early tax avoidance efforts focused on aggressively lobbying Oregon’s Legislature to adopt a single sales factor system for taxing corporate income.

In 1965, Oregon adopted provisions that provided a method for dividing corporate taxable income among states according to each state’s share of a corporation’s property, payroll and sales.

Each of those factors was given equal weight until 1991 when the state shifted to 50% weighted sales and 25% for payroll and property. In 2003 the sales factor increased to 80%. In 2005, under pressure from Nike and some other large multistate employers,the state moved entirely to single sales factor, meaning 100% for sales and 0% for payroll or property.

The shift meant that Nike, with large portions of its property and payroll in Oregon, but a small share of its U.S. sales, was in a position to shave a hefty amount from its corporate income tax bill.

The Oregon Department of Revenue estimated that the shift 10 single sales factor would reduce total tax revenue by $77.6 million in the 2005-07 biennium alone.

Nike was thrilled, but as time went on it wanted more. In particular, it wanted to cement the single-sales factor system in place for the long-term.

In 2013, behind-the-scenes maneuvering by Nike resulted in a deal under which the state promised not to change Nike’s single sales factor tax treatment for 30 years if the company agreed to expand in Oregon. That meant Nike would be exempt if the state decided to include measures such as payroll or property value in its corporate income tax calculations.

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Nike was thrilled again, but some tax policy experts criticized the deal. “… enacting legislation that for practical purposes is directed to, at most, a handful of companies is not ideal tax policy, as this policy provides benefits to certain taxpayers that are not available to the vast majority of other companies,” a Grant Thornton LLP paper said.

Nike’s next move came in 2018, when public employee unions wanted to get a ballot measure passed that would require Oregon companies to reveal to the public the state taxes they pay.

Nike wasn’t thrilled with that prospect, so it cut a deal with public employee unions and Gov. Kate Brown to kill the measure. In return, Brown and the unions got assurances that Nike would oppose  Initiative Petition 31, a measure that would make it harder for the legislature to raise taxes, and Initiative Petition 37 that would ban taxes on food in OregonAt that point, supporters of both initiatives had already turned in enough signatures to get the proposals on the ballot as Measures 103 and 104.

The deal, secured by an alliance of strange bedfellows, protected Nike from the threat of having to disclose how much it pays in taxes and, in turn, how much tax revenue the state gave up by agreeing to the single sales factor tax.

Coming out a winner again, Nike protected its narrow self-interest at the expense of full corporate transparency and Oregon taxpayers at large.

As Gov. Brown and the unions had hoped, the anti-tax initiatives went down to defeat in the Nov. 2018 election. Not only that, but the Democrats, with help from campaign contributions by Nike, won a supermajority in the state House and Senate. That will give them the ability to craft statewide bond measures and to raise taxes without Republican support.

And that’s exactly what the Democrats plan to do, raise taxes…a lot.

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In late November 2018, Nike, public employee unions and a group of long-term care providers launched a coalition to push an expansive tax package through the Legislature without any commitment to address problems with the the state’s Public Employees Retirement System (PERS).

A lot of Oregonians who voted for Democrats in November 2018 probably didn’t realize they were voting to raise their taxes big time, but a tsunami of taxes is about to wash over the state and wreak havoc with Oregonians’ budgets.

If you’ve seen your pay go up because of Trump’s tax overhaul (which, by the way, Democrats in Congress want to roll back) or a pay raise, get ready to see your gains disappear down a tax rat hole.

Gov. Brown has proposed a $23.6 billion General Fund and Lottery Funds budget for 2019-2021.  The proposal includes $1.9 billion more for education and more money for the Oregon Health Plan, combating climate change, battling homelessness and modernizing Oregon’s computer systems.

But even with Brown’s proposed budget increase the state could be short $623 million, according to the Legislative Fiscal Office and Department of Administrative Services. That could mean pressure for even more taxes.

When 1 in 3 Americans can’t name their state’s governor, 4 of 5 can’t say who their state legislator is and consistent statewide media coverage of the goings–on in Salem is limited,  Oregon’s Democrats probably figure they can raise taxes as they please without much blowback from the public.

And Nike probably figures it can rely on its carefully curated social responsibility reputation to protect itself and avoid being singled out by Oregonians as an instigator and enabler of higher taxes on everybody but itself.

After all, what’s good for Nike is good for Oregon, right?