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Monday, March 19, 2007

Real damage

The Oregonian must take its own unions head-on
Legislature can't pay for the out-of-state billionaire owner's private labor problems

You've heard of leaving nothing to the imagination? The marriage between Si Newhouse's The Oregonian and Oregon's government unions is inflicting the opposite problem on Oregon. It leaves everything to the imagination.

After voters chose to change directions in 2006, it's no surprise that some Oregonians would imagine Republicans had lost their way. But while the new bipartisanship appears to require everyone to lay down lots of Big Love for Big Labor, it doesn't explain why. Or even if it's a good idea.

That's largely been left to The Oregonian to determine. And guess what: Human beings, seeking compensation, tend to exaggerate their demands. If that's predictable, what is not surprising is how meekly state and local governments have gone along with the Newhouse-Union intimidation.

"We look at what they put down on their wish list," one Washington County official said last week. "But we really don't pay a great deal of attention to the cost."

Neither do most other jurisdictions. Overwhelmed by strike demands, they don't have time to investigate unions thoroughly. And the dollar amounts don't matter, anyway, officials say, because there's plenty of taxpayer money flowing in over the transom to pay for PERS and automatic step increases.

True, there's no way to pay $12.6 billion. As of Friday, that's how much the roughly 7,500 government worker bargaining units in Oregon had demanded in exchange for a statewide no-strike promise. Yet if the state imposed a prudent way to measure and verify what it actually spends, that method in and of itself would help to curtail exorbitant demands.

Typically, the amount unions demand for not striking is based on whatever the total amount of private property in the state might be worth today. Take, for instance, one $9.5 million demand, recently analyzed by the National Right to Work Committee. The dollar amount is based on the hope of building a new level of local government to administer farmland issues.

That is, it's based on whatever the unions can extort today, not on what the people might need in the way of services. Any level of funding will usually compete with thousands of other priorities. Today, however, the sky is the limit.

Thus, ironically, government unions actually benefit Si Newhouse and The Oregonian. They can pursue promotion of the union agenda in Salem, as a down payment for holding off the organizing campaign brewing at 1320 SW Broadway.

If The Oregonian really cared about Oregon, it would deal with its union problem privately, not via the public purse. The dollar amounts for demands would be based on The Oregonian's monopoly advantage that Sam Newhouse never possessed originally - but that his sons enjoy now, thanks to 57 years of anti-competitive practices.

And here's another problem with that $9.5 million demand we mentioned earlier. Had the state confiscated The Oregonian as a strategic public resource, sold it for roughly $7,000,000 in the early 1970s, put the proceeds in a bank, paid interest on it, and then returned the money to the claimant, the Right to Work Committee estimates it would have been worth $83,805,500. That's a tenth of what The Oregonian is actually worth today.

Strangely enough, the proponents of giving unions everything they want actually suggested a similar strategy for calculating fair demands. In arguing that the Oregon Supreme Court should uphold the Newhouse's monopoly against newspaper guild claims on its wealth, the newspaper's attorney argued that "if the state had confiscated $1,000 from the Newhouse family's savings account ... and 32 years later it is decided by popular vote that this was unfair, presumably all would agree that repayment should include an amount to offset lost interest as well as principal. That is all that is required under the new bipartisanship."

The Oregonian now seems to have forgotten they ever suggested this approach. We trust it hasn't slipped the minds of the Oregon Supreme Court justices, who ultimately upheld the Newhouses. The Oregonian should have quickly adopted this way of calculating its position on union demands. The Oregon Legislature should still adopt it.

Because there's another big problem here. If state and local governments don't put some lead in their pencils, how will taxpayers ever know for certain that any intimidation by unions even took place?

Recent calculations by the Right to Work Committee show many unions have lost nothing, or only a fraction of what they imagine they've lost. As for that $9.5 million demand? Not long after it was filed, the Committee reported, "a neighboring bargaining unit offered in writing to provide protection to farmers for $12,500 an acre or $676,000." The local government turned this down, preferring to wait for the state's anticipated agreement to pay the $9.5 million.

Who wouldn't?

We don't accept The Oregonian's absurd notion that people should pay for the hypothetical losses on speculative values of their monopoly newspaper. But if Oregonians still believe this nonsense, then the process of paying off the unions should have some toehold in reality. If the dollar amounts were calculated fairly and realistically, the Right to Work Committee concluded a great deal of private property could still be saved from the jaws of collectivism.

If legislators still cannot bring themselves to end the Big Labor scam, they must at least set a uniform method of limiting the growth of taxes and fees. They must put a stop to the wildly exaggerated expectations unions and Si Newhouse have dialed up.

The 2006 election threatened real damage to our state - based on dollar amounts that reside, mainly, in in the imaginations of billionaires Si and Donald Newhouse.

The Oregonian, OPINION By The Editors, Mar. 19

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