Austerity, Resistance and Results From Portland’s Budget Process

By Solidarity Against Austerity

Click here for image gallery from campaign events.

On June 20, 2013, the Portland, Oregon City Council unanimously voted to approve a budget that had been one of the most grassroots-contested examples of austerity in recent memory. Earlier, in a vote to approve the framework of this budget on May 29, the City Council’s long-maintained show of consensus was broken when Commissioner Amanda Fritz voted “no.” (More on her vote later). However, by the final budget vote last Thursday she had been compelled to change her mind.

How has the 2013 budget process developed? When the Portland Budget process began several months ago, newly elected Mayor Charlie Hales announced a $25 million deficit in the city’s General Fund. Each bureau was told to submit budgets with 10 percent cuts, signaling Hales’ determination to oversee mass lay-offs and the slashing or elimination of essential programs that many Portlanders have come to rely on.

This latest round of cuts promised to be the worst of several successive years of austerity measures. Each time city officials have told the public that “temporary” sacrifices needed to be made now to enable the economy to turn around tomorrow. Each time there was no turn-around and more cuts were, predictably, peddled the next year despite this economic “tonic’s” miserable record.

We say “predictably” because you cannot build up a city while slashing away at its community members’ jobs and social safety net. Each job lost, each service cut results in less money for people to put into the economy. Without a thriving consumer base no economy can lift itself out of the crisis we have been suffering since 2008. Consequently, each year cuts in Portland and elsewhere have damaged the prospects of a recovery and contributed to a downward spiral.

Corporate politicians continue to aggressively impose this approach, regardless of its results, because they have a death-grip on a “logic” that has been proven dead wrong in both economic theory and experience. If their insane notion that the road to recovery is paved with policies that enrich the wealthy and big business while dismantling programs that serve public needs were true, then we ought to have seen a real recovery by now. These officials’ budget “fixes” deepen the economy’s fundamental problems and inequality.

This is the fallacy of “austerity.” And the evidence is overwhelming: throughout Europe depressed economies have resulted from a blind commitment to implementing austerity measures.

Grassroots Push Back

What worked to move developments towards a better outcome? In Portland, Mayor Hales’ and the City Council’s pursuit of austerity was met with a public outpouring at public budget hearings against its adverse effects. This culminated on April 11 when over 400 protesting participants surprised the City Council with their vast numbers and overwhelmed their staff. Attending were members of the Multnomah County Youth Commission, Laborers’ Local 483, Portland Community College, Friends of Trees, Portland Safety Net, SUN Schools, Eastside Action Plan, Elders in Action, AFSCME Local 189, and numerous others. They stunned City Council with emotional and at times confrontational testimony while many were dressed in red to show solidarity and carried an array of signs in defense of threatened social programs.

Also attending were members of Jobs with Justice, the People’s Budget Project, and Solidarity Against Austerity. These groups saw the hearing as an opportunity to begin building unity among the majority of Portland’s working class communities to oppose all cuts and protest City Council’s refusal to discuss alternatives to austerity. They announced their presence with a banner they posted above the door of the meeting saying “COMMUNITIES UNITED TO STOP CUTS” and passed out hundreds of stickers and signs with this message as well as “RAISE REVENUE – NOT UNEMPLOYMENT.” In their testimonials they frequently turned to address the audience, arguing why the cuts are destructive and unnecessary, pointing out that the money could be found in the hands of the 1%, and explaining how the City Council could get this money to serve Portland’s communities.

Council members were visibly displeased to see people in the audience respond in large numbers to requests from activists to stand or raise their hands and signs in opposition to cuts. There was vocal support from the audience for no-cuts and loud objections when City Council tried to cut off anti-austerity testimony. Testifiers also spoke to how we will have more power if we unite against all cuts rather than beg City Council not to cut individual programs. In contrast to previous public budget hearings, the event on April 11th took on the character of a fierce protest.

This protest had an impact. The City Council had to adjust their tactics. Two more public hearings were added to those already scheduled. It was announced that the General Fund deficit was now reduced to $21.5 million rather than $25 million. City officials began to “find” funding for some of the popular programs on the chopping block. Nevertheless, opposition to the City Council’s austerity measures continued at the next public budget hearing. On May 16 firefighters stood side by side with housing advocates from Right 2 Survive, city workers from AFSCME 189, and social workers focused on treating the victims of human trafficking, at a large press conference outside City Hall, demanding no cuts to their services. The press conference was accompanied by street theater, a pie giveaway and a banner saying “Bake a Bigger Pie!” — in reference to the need to raise revenue by taxing the wealthy and big corporations who are currently being provided huge tax breaks rather than paying their fair share.

About an hour before the start of the budget hearing on May 16th, the mayor announced they had devised new ways to lessen cuts by working with the Multnomah County government. Many programs had their funding at least partially restored from the cuts they were expecting. SUN community schools, a domestic violence center, and a needle exchange program were given a reprieve – for this year at least.

Had it not been for the outpouring of opposition on April 11, combined with demands for an alternative to austerity, City Council would not have been compelled to “find” additional sources of funding.


This outcome was not what Mayor Hales wanted originally, as is evident from his initial hardball posturing. Grassroots public opposition forced him to take a more flexible approach.

Nevertheless, we are still left with a cuts-only budget. The Office of Healthy Working Rivers is gone. Fire fighters and maintenance workers are being laid off. There will be at least $100,000 less for homeless shelters. Two hundred thousand dollars will be cut from Friends of Trees. Fifty thousand dollars will be cut from Hillsdale and Alberta Street programs. Janus Youth, which works with human trafficking victims, will be cut 25 percent. These are a few already underfunded programs taking a big hit.

The Portland city government has announced that there will be only 26 pink slips handed out as a result of cuts. However, at least 142 jobs are slated for elimination, the majority being currently unoccupied positions and new openings as a result of early retirements. These are jobs that should be filled, not disappeared. City Council’s line that there will be only 26 pink slips handed out is an attempt to cover up the long-term damage their cuts will inflict on our communities.

The City Council has not even entertained the idea of raising revenue from the wealthy individuals and corporations who can most easily afford higher taxes. This is particularly scandalous since their wealth has been growing so rapidly while everyone else is losing ground. Without progressive tax measures, big corporations and the wealthy will continue gobbling up an obscene share of any economic gains that have been made in the age of austerity, and Portland will undoubtedly face additional cuts next year.

Other deep-rooted problems revealed themselves in this budget process. The non-profit non-partisan U.S. Public Interest Research Group (PIRG) has given Portland’s budget a D- for its lack of transparency. Not even the City Commissioners have a full grasp of the budget, as was clear when Commissioner Dan Saltzman said of the newly found funding sources, “I’m glad these things were added, but I’m not sure where all that money came from.”

This lack of transparency is especially apparent when it comes to Portland’s Internal Service Funds (ISF) budget. The way the fund works is that city bureaus are charged for a range of administrative services that are centrally provided, such as facilities, fleet, printing, IT support, employee health insurance, liability, workers’ comp, and legal needs. It is set up as a money-in money-out fund and, therefore, should remain at roughly the same amount every year. However, this fund has grown from $68.8 million five years ago to $106.7 million today.

According to the City’s own documents, the Internal Service Funds are unrestricted and available for any legal purpose. Opponents of austerity argued that the $21.5 million deficit in the General Fund could be filled by transferring money from the ISF. This one-time emergency measure could fix the immediate crisis and give the City Council time to develop revenue-raising measures. Yet at one of the last public budget hearings, the City Council announced that the ISF was not as “unrestricted” as they thought. The reasons for the ISF’s growth, what programs it funds and why these funds are restricted in contrast with what the city government’s own documents state have yet to be explained.


The budget process lacked any genuine democracy based on an informed public. At the budget hearings attendees were told that there just wasn’t any money available and that they’d better explain why the particular programs they favor should not be cut — end of story. The City Council even went so far as to solicit ideas for cuts from the community. The false claim that Portland is broke was meant to rig the outcome of these hearings, push aside the issue of economic inequality in Portland, and leave Portland’s communities fighting among themselves for crumbs.

Even within the narrow world of the City Council, democratic processes fell far short of what would normally be expected. This was part of the motivation behind Commissioner Amanda Fritz’s “no” vote on the budget. Explaining her vote she said of the process:

“From my perspective, this has been a less collaborative Budget process than any of the past four years. Services that I consider highest priority for City funding have been dismissed as either not important, or someone else’s responsibility. Until today, the five members of the Council have not met as a ‘board of directors’ to discuss the information we heard in the Budget work sessions, or to set shared priorities. There wasn’t even one work session to air each Council member’s concerns. Since the release of the Mayor’s Proposed Budget, over half a million dollars of new money has appeared, yet there was no discussion about how to allocate this new money.”

This statement gives the impression that budget priorities are being decided by Mayor Hales away from the oversight of the public and even other elected officials.

Fritz’s remarks stand in stark contrast to Mayor Hales’s prior public statements on the budget process. The Portland Mercury recently reported that the mayor rebuked Janus Youth workers for “embarrassing him” with their public testimony about human trafficking and “strongly urged them not to come to future hearings.” All of these accounts make us question Hales’s regard for democratic public participation.

Where To Go From Here

If long-term solutions are to be found for Portland’s budget and economic difficulties, they will come from a social movement independent of the politicians and their corporate backers. For too long Portland’s budget has benefited big business and the wealthy at the expense of the vast majority. For a budget that puts Portland’s communities first, these priorities will have to be reversed. That means that even Portland’s 1% will have to pay their fair share to make this “The City That Works” for the uplift of all, not the greed of a few.

In an Oregonian Op-ed by Economics professors Robin Hahnel (Portland State University) and Marty Hart-Landsberg (Lewis & Clark University) entitled “Austerity is not the way to fix Portland’s budget,” a number of concrete proposals were put forward that would start to do this. Their ideas include a progressive county income tax, changing the city’s flat business licensing tax to a progressive system, and restructuring the Portland Development Commission policies to make sure that gains from redevelopment are shared. These could raise enough revenue so that we would no longer be talking about filling holes in the budget but would instead be providing jobs, expanding social services, hiring more teachers, and sustainably rebuilding our infrastructure.

The grassroots struggle over the city budget in 2013 helped to spread the popularity of such an approach and established a network of union and community members who are willing to unite around it. By focusing on building unity around concrete revenue-raising proposals, by exposing how budget priorities are set and how they hurt our communities, and by organizing to expand our movement, we will be better able to face the challenges coming our way in 2014.

TIME TO BAKE A BIGGER PIE! No Cuts! Raise Revenue!

TIME TO BAKE A BIGGER PIE! No Cuts! Raise Revenue!

5:00pm -6:30pm
Bring a dish and your revenue-raising ideas to share.
Sign up to testify at the Budget Forum and then join us for dinner. Pies are encouraged!
1221 SW 4th Ave.
There is enough pie for everyone!
Mayor Hales and City Council say there is a $25 million shortfall. The City of Portland’s 2013-14 proposed austerity budget proposes 10% cuts, which means laying off 395 people and cutting essential service including: housing programs, community centers, jobs, funding for parks maintenance, SUN after-school programs, youth employment services, fire stations, Multnomah Youth Commission, East Portland Action Plan and much more.

There is an alternative to austerity. We can stop giving tax breaks to rich corporations and individuals, tap Internal Service Funds, and prevent job loss and preserve vital services.

We don’t have to fight over crumbs!
Join us as we unite our community to stop the cuts and raise revenue!
Wear red if you can to show solidarity.

Bring a dish and your revenue-raising ideas to share. Sign up to testify at the Budget Forum and then join us for dinner. Pies are encouraged!

Twenty Questions Our City Council Needs to Answer Before They Pass the FY 2013-14 Budget.


1. Where’s the discussion of revenue options in the budget analysis?

2. Is Portland discontinuing corporate tax breaks to remedy the financial shortfall?

3. Why did City of Portland officials consider an enterprise zone (tax break) for Nike, when Nike has billions in off-shore tax shelter accounts, and Nike just got a huge tax break from the State legislature , and the City of Portland needs revenue?

4. Some Portland industries directly supply tar sands natural gas extraction including Evraz, Precision Castparts, and ESCO. When is City Council going to impose a carbon tax on these corporations? The carbon tax could be used for truly green jobs here in Portland.

5. Affordable housing money was used to finance the Headwaters development in SW Portland even though it does not provide housing for low income people. What are you doing to return that money to the affordable housing budget?

6. When are you going to stop using affordable housing money for projects that serve people in the upper 20% of income distribution?

7. When are you going to discontinue the tax breaks on the Headwater units?

8. Why are you saying we have to choose between repairing potholes and putting in sidewalks? We need to maintain our roads and put sidewalks in all residential neighborhoods.

9. Why aren’t you prioritizing maintenance? Maintenance of existing infrastructure is vital, especially in tough economic times. We need to hire more maintenance workers, not lay them off.

10. In tough times people turn to their local parks and recreation services more. Why aren’t you prioritizing these essential services, especially when those departments have been continually cut back in the last few years?

11. We say we care about youth, and crime prevention, about education. Why are there cuts to youth Tri Met passes which provide essential transportation to school and work for our young people?

12 Why are cuts proposed to youth jobs programs?

13.. According to a recent report by US PIRG  the City of Portland ranks a D- for transparency in public fund spending.  What actions if any is this council prepared to undertake in order to reach a level of transparency as called out by this report?

14. What are the fifty largest businesses in Portland? What taxes did they pay since 1983?

15. Will you be willing to call a moratorium on tax breaks (including URA’s, TIFs and Enterprise zones)?

16. The 2009 OCCFM audit says that tax breaks to telecommunications companies result in 11.5 million dollar annual shortfall in taxes. What action are you willing to take to rectify this?

17. Are you willing to tax the telecomm companies instead of the consumers?

18. Why are you considering cutting funding to the Center that serves the neediest of people who are houseless? Major funds went into building the center, but you have to fund programs, not just buildings.

19. What  businesses have received tax breaks in exchange for promises of jobs?

20. Where are the follow-up studies on those tax breaks that show the resulting jobs?


Message to City Council: DON’T CUT OUR COMMUNITIES

PDXbudgetforum pete

PDX Community Budget Forum at George Middle School 3/12/13

Testimony delivered by Portland resident Pete Hybertsen at the March 12th Community Budget Forum with Portland City Council:

I’m not here to advocate for cuts of any kind. I’m here because until tonight the proper name for the program  you are promoting has been conspicuously absent from this debate. What you are proposing is austerity. It’s just that plain and simple and austerity has worsened public services and unemployment everywhere it has been imposed on a community. We have many real world examples that show us this.

Mayor Hales, in a recent interview you characterized this budget issue as “a temporary squeeze that will ease up,” at which point we will be able to “build a strong foundation for the future.” That sounds an awful lot to me like what we were told last year, and the year before that and the year before that. How many “temporary squeezes” do the most vulnerable in our community have to endure before we talk about the chronic unemployment and underemployment that is undermining opportunity for Portlanders, particularly young people who want to contribute to building our community rather than dismantling it.

When I first moved out here, I wanted to be a public school teacher. And you know, I would have considered it an honor to do my part to help the kids attending schools like this one. Years of budget cuts have made that aspiration seem all but unobtainable now, offering only the assurance of debt and an uncertain ability to earn a living providing a public service.

I don’t know how you can believe that you can build a foundation for the future on yearly cuts. If you really intend to build for the future then why has openness to revenue raised from wealthy individuals and businesses been absent from this debate? Why is local stimulus treated as an impossibility?

Austerity demands that good people and good programs be pitted against one another to fight over artificially limited resources. I refuse to participate in that process. We deserve better than cuts every year. Young people deserve support and an opportunity to help out. Considering that you all are among the few people with total job security for the next four years, I expect more creativity than this. Because I’m running out of hope that next year will be any better.

Kneel Before the “Job Creators”… Or Stand for Something Better

By Nicholas Caleb | Republished from Blue Oregon.

The idea that the public good is synonymous with the economic good, as defined by the success of very narrow set of monopoly and individual interests, dominates our political system. If democracy and community interests get in the way of this ideology, as they often do, they are seen as dispensable.

Nike’s recent coup d’état to secure itself a virtual exception from paying anything close to a reasonable tax rate for up to 30 years on large scale developments — no matter what fiscal conditions emerge in the future — marks a significant departure from the way big money usually influences state policy.

As if corporate interests didn’t have enough influence in government through back-room deals, lobbyists, campaign contributions, the revolving door, and front groups like the American Legislative Exchange Council, Nike openly and flagrantly signed its company name to a not-so-veiled threat against the State and its embarrassingly pliant lame-duck legislature: “Give us what we want right now or we’ll take our secret jobs to another state!” Because numerous articles have already laid bare Nike’s economic excesses and bad corporate citizenship — like their already astonishingly low tax rate,outrageously high executive compensation, and off-shore tax havens — I am interested in exploring a narrative that extends beyond the debate around tax policy and into questions of what we actually mean when we use the words “democracy” and “representation” in local and state politics. Rather than an exception to otherwise decent policymaking, I see this Nike tax deal as a prime example of a disturbing trend where public process is relegated to something barely more than a formality between the narrow desires of the wealthy and their eventual satisfaction.

Despite Oregon’s progressive reputation, the last few months have shown that we are on the verge of becoming a state where large corporations can simply invent a crisis (or just invoke the word “JOBS” in light of the current economic desperation) and demand whatever concessions they want. In addition, it has become possible that coal will run down our rivers and railways as a “green” state opens the gates to climate suicide, our public water will be sold to private firmsso they can sell it back to us at upwards of 10,000 times the price of a gallon of water, and we will waste tax revenue on a bridge that will increase sprawl when we should be developing sustainable cities. In short, the inconceivable became conceivable almost overnight as the veil of progressivism was lifted to reveal a political machine apparently unwilling to oppose bad policy or offer any new ideas in the age of austerity.

As citizens, we’re continually bombarded with all manner of crisis rhetoric, which is largely presented uncritically by the media. Of course, this is exactly the dynamic that Naomi Klein identified and documented in The Shock Doctrine: when powerful interests want something that is unpopular, they wait for or create a crisis, and opportunistically push the agenda while everyone is distracted and/or scared.

That is how the shock doctrine works: the original disaster—the coup, the terrorist attack, the market meltdown, the war, the tsunami, the hurricane—puts the entire population into a state of collective shock. The falling bombs, the bursts of terror, the pounding of winds serve to soften up whole societies much as the blaring music and blows in the torture cells soften up prisoners. Like the terrorized prisoner who gives up the names of comrades and renounces his faith, shocked societies often give up things they would otherwise fiercely protect. Jamar Perry and his fellow evacuees at the Baton Rouge shelter were supposed to give up their housing projects and public schools. After the tsunami, the fishing people in Sri Lanka were supposed to give up their valuable beachfront land to hoteliers. Iraqis, if all had gone according to plan, were supposed to be so shocked and awed that they would give up control of their oil reserves, their state companies and their sovereignty to U.S. military bases and green zones. (p. 17)

Nationally, we see one crisis materialize in the form of the fiscal cliff debate, which, but for extreme public outrage looked as though it would be an excuse tochip away at the last of our social safety net and, though far better than it could have been, still found a way to end with all sorts of corporate welfare. However, because the deal all but ensured a repeat of the debt ceiling crisis very soon, and Obama has revealed a willingness to negotiate on everything, we can expect the safety net to be a bargaining chip again when the next emergency is declared. One of the most audacious uses of crisis preceded the TARP bailout where we couldn’t even attach conditions to the funds, like “don’t use this $800 billion to pay yourselves bonuses”, because we had to act quickly or the world economy would collapse. It seems that each crisis to justify giving up more of our democratic power, social benefits, and civil rights to the richest people to have ever existed is more ridiculous than the last. We can’t know what pressing crises we will face in the future, but we can be pretty sure that we will have to make the poor and working classes give up more to fix them.

For Nike, Kitzhaber, and the state legislature, the invented crisis was the fragile emotional states of Nike’s executives, who weren’t feeling confident enough about the future of tax policy in Oregon to commit to a capital investment in the state. Nike provided the public with no evidence of why their insecurity required such urgent action and simply demanded that the government bend to its will. Is it not ridiculous that Nike, the world’s largest apparel company, can produce multi billion dollar advertising campaigns to create a brand identity around competitive themes like confidence, risk-taking, and toughness while simultaneously conjuring up a state emergency out of a lack of investment confidence? It is nice to imagine these extraordinarily wealthy analysts, lawyers, and executives shaking and quivering with uncertainty about their future in their gaudy global headquarters; however, since Nike was threatening to invest in another state if it demands weren’t immediately met, perhaps it is more accurate to highlight their clear-cut strategy: economic extortion. This threat was, for a Democratic legislature, enough to abandon due process — the rock on which the legitimacy of liberalism rests —  on an issue of enormous consequence for the future. One wonders what this institution is good for if we can’t have adequate process on the most important decisions. If all you have to do is make an economic threat and the government will capitulate (and simultaneously issue half-hearted and wretched rationales for it), why does this institution exist at all?

Not only is calling a lack of confidence an emergency an outright absurdity (especially in a time period where plenty of actual crises have presented themselves in the last few months), it reveals a deep cynicism within corporate capitalism and the relation of these overgrown institutions to the government. Our democracy is so broken that this type of secret, preferential treatment is completely legal and according to Nigel Jaquiss, quite normal. In fact, such subsidies, tax breaks, picking up the tab on externalities, etc. provide the only possible way in which American capitalism can remain so profitable. The public domain is simply transferred into the coffers of private industry, but we haven’t seen the openness with which this type of corruption is perpetrated since before the Great Depression. At least the conservatives occasionally call it crony capitalism. In Oregon, the Democratic Party’s elected officials apparently celebrate it as good governance. As Brendan Monaghan accurately put it, passing the law put “Democrats in the awkward position of owning the label as the party of corporate welfare. More important, they implicitly conceded that lower taxes do, in fact, stimulate business growth.” This is not the only time in recent months that elected Democrats have about-faced against purported party positions.

For some perspective, compare the response of Kitz and the legislature to an actual crisis that is already wreaking havoc around the globe: climate change. Keep in mind that the State of Oregon wholly accepts that climate change is real and has committed to doing something about it. At present, at least two major developments stand to strongly impact climate change: coal export terminals and the Columbia River Crossing. Northwest coal exports, if they are allowed, are actually projected to contribute more carbon dioxide to the atmosphere than the contents of the (actively delayed) Keystone XL Pipeline and, in no uncertain terms, represent a commitment of our civilization to climate suicide (as do all major fossil fuel developments including oil and natural gas). With the size of this emergency, you would almost think it fortuitous that Oregon, as such a green state, has the power to stop or significantly impact its chances simply by denying the terminal permits (though there are plenty of other ways it could be stopped). Here, Kitzhaber has a virtual veto and yet the public process goes on with the Oregon Department of Environmental Quality routinely telling packed public forums that they refuse to even consider climate impacts of the exports and won’t take into account the fact that Ambre Energy has already lied to Washington regulators about its proposed developments. (“We won’t hold it against them”, DEQ says.) Furthermore, the DEQ has limited its inquiry to such a narrow scope that it seems almost inevitable that the permits will be granted. Similarly, Kitzhaber and the Oregon legislature have revived an unpopular (and what seemed dead) CRC development proposal despite the fact that to meet our climate goals we need to be drastically reducing, not increasing, the use of the automobile. So much for our commitment on that front!

So why does the location of a manufacturing facility, a relatively routine business decision, receive an emergency legislative session while a huge opportunity to do our part to to stop a global crisis goes not only ignored, but boldly repudiated? The answer is almost too obvious: money owns our government and the electoral process, both parties have accepted the neoliberal worldview, and no one with any ideas or imagination for a new economy can challenge this hegemony from within the system. Instead, the idea that the public good is synonymous with the economic good, as defined by the success of very narrow set of monopoly and individual interests, dominates our political system. If democracy and community interests get in the way of this ideology, as they often do, they are seen as dispensable.

In Oregon, the long-standing legislative power for representatives to decide tax policy has been deemed inconvenient, so it must be sacrificed to the altar of new economic developments. However, there is already talk of extending this “tax certainty” to businesses that might simply threaten to move existing operations if they aren’t guaranteed a permanent tax rate. And, under the ideology that Oregon Democrats have signed on to, why shouldn’t they? If it’s good enough for Nike, why shouldn’t every business enjoy a permanently low tax rate to ensure maximum investor confidence? What arguments will the Democrats be able to make with a straight face after this deal? Only Nike deserves this treatment? Onlynew facilities require exceptions to the rules? If so, how is that justifiable? What if Nike, or anyone else big enough, demands exceptions to environmental laws for new or existing facilities? The awful precedent has been set, blood is in the water, and I expect a lot more of these discussions to become very regular. The race to the bottom just shifted into high gear.

Of course, not everyone is as torn up about the final stages of gutting our already ineffective democratic institutions as I am. To others, this is just reality. Sal Peralta described the “realist’s” position in a comment in Val Hoyle and Jules Bailey’s article in support of the bill:

With respect to the public policy involved… welcome to the new normal with respect to dealing with massive corporations. The fact is that companies that take in billions in revenue and employ thousands of workers have a great deal of leverage over state & local governments, and if Oregon doesn’t want to sit down at the negotiating table with Nike, jurisdictions in other states will be more than happy to fill that void.

It is important to understand where we are going if we allow exceptions to the rules and bind ourselves from regulating or taxing large businesses. It’s important to note that when we make these commitments via contract, unless there is some legal basis for invalidation that I’m not aware of, we are Constitutionally bound to abide by these decisions. Not even an initiative to amend the Constitution could overturn these contracts.

It is also important to understand the relationship of the corporation to nation-states in the the larger context of “free trade” and globalization. These types of special rules for transnational corporations already exist in so-called developing countries. I have personal experience with legal formulations for exemptions called special economic zones (SEZs are also referred to as free trade zones, export promotion zones, or other names depending on the specific country and technical rules) that have been normalized all across Asia and the Indian subcontinent. Simply put, transnational corporations strong arm sovereign nations into creating geographical zones that become exceptions to the general laws, rules, and regulations of the larger state apparatus. This generally means lowered or no taxes, embarrassingly weak environmental or labor standards, no export duties, etc.; anything and everything to maximize the profit of the corporations. It should come as no surprise that Nike already receives special treatment internationally as many of its sub-contracted production facilities in ChinaIndia,Taiwan and elsewhere are located in SEZs. (Subcontracting out its sweatshop operations is also a way that Nike can make claims that its employees earn average salaries of $100,000.) “Qualifying investment contracts” appears to be Nike’s mechanism for weaseling similar exceptions into the norms of Oregon governance.

The international trade and globalization angle is also extremely important for understanding the consistent stagnation in the wages, decline benefits, and decay of social protections of the American working class over the last 40 years — papered over by the mass extension of consumer credit and the crushing debt that accompanies it. As a result:  (1) corporations have enjoyed extraordinary profits and the wealthy a greater share of the pie, (2) massive advances in science have been used for social control and simulation technologies rather than those that might give us time to experience more independence and a higher quality of life, and (3) mass society has refused to take meaningful (well, any) measures to interrupt the consumer-cult death march toward global environmental catastrophe.

Consider that the Nike demand on Oregon is on the same order of significance as the attempted elimination of collective bargaining in Wisconsin and the so-called right to work law that just passed in Michigan. Superficially, the Nike deal differs as it is not directly attacking union rights, but instead the revenue stream, which is the source of what funds public employees and their unions. Indirectly, this strategy provides organized capital with an increased ability to lower labor standards and bust the rights and power of labor unions and unorganized workers. When corporations refuse to pay taxes and demand more out of the public coffers, revenue for schools, public employees, regulatory agencies, and pretty much the whole New Deal social safety net disappears as we have to cut, cut, cut. Indirectly, again, more people are unemployed as the wealthy hoard more money or invest some of the money in jobs that will pay far less and give fewer benefits than unionized employment. In practical terms, this trend has been developing for quite some time and the era of American exceptionalism — where a certain portion of this society, the so-called middle class, got to have its cake on the backs of the rest of the world and eat it too — is already over; but most of us just haven’t received the memo yet. As with most problems, the first step is in admitting its full extent. In this case, it’s understanding that within the social realities we’ve created in our society through the capitalist experiment, the working class has almost no institutional power to make change. (A few resources that are indispensable for understanding this history are David Havey’s A Brief History of Neoliberalism, Leo Panitch and Sam Gindin’s The Making of Global Capitalism, Chris Hedges’ the Death of the Liberal Class, and of course, Howard Zinn’s A People’s History of the United States.)

Despite the eruption of a domestic and international resistance to the continuation of this order (brutally repressed in the US by a public/private security-state alliance), the mainstream political dialogue has not shifted except to re-appropriate the language of class war in order to win elections before continuing on a path of austerity — preferentially taking care of the interests of the wealthy in an era of supposed economic crisis. It remains to be seen whether this last round of elections — in which the ideal candidate of the 1% was thoroughly repudiated — will produce bodies that continue to capitulate to extortionists, scramble for positions of authority that are accepted as subordinate to corporate power, sell off the rest of the public domain so it can be sold right back to us in the new incarnation of the company store, continue to make excuses for why we can’t do anything substantive even when “we” win elections, and watch the environment go into free-fall collapse. Call me a skeptic, but I think it’s going to take a little bit more than elections to influence a change of course.

Though I refuse to accept the inevitability of economic and environmental collapse, I also don’t desire to engage in wish thinking or half-heartedly invoke the fantasy of the inevitability of progress. Instead, I want to continue to develop and articulate a vision to utilize remaining institutional power to transition to a system of greater self-determination for human individuals and communities while utilizing technology to achieve actual sustainable cities and trade networks instead of the same ol’ crap in a greenwashed package. Much work needs to be done on the policy side, coalitions need to be built and nurtured, but we first need to orient ourselves in a state of mind that refuses to go along with the popular “wisdom.” We must identify the real emergencies instead of allowing ourselves to be scared into the neoliberal vision of completely unregulated capitalism. Rather than scrambling to protect and further swell the bank accounts of the already enormously wealthy, perhaps we might find other issues more worthy of our immediate attention. Here are a few that seem more crisis-like to me: climate change, the destruction of the public K-12 and university system, the decay of the social safety net, the lack of affordable and readily available health care, ever-increasing food and energy costs, a child mortality rate that is highestamong wealthy nations, immense consumer debt, the attack on unions, having 10 times as many empty houses as homeless people (while we create even more with the scary pace of foreclosures and evictions). Adding campaign finance reform as a priority would also make it much easier for any body to concentrate on the issues that real people face.

The time is ripe to form the elusive labor, social, and environmental sustainability coalitions that would instantly serve as a game changer in terms of the political power of the working class and thus, terrify the corporate oligarchy even more than Occupy did. Here, I’d like to invoke the spirit of Rebecca Solnit’s recent article in The Nation which boldly articulated a commitment to the fight against climate change and listed some excellent examples of organized resistance to the course of destruction on which we are headed. 2011 was the year of the global uprising. 2012 saw a continuation of resistance and cultural evolution, despite the fact that it was largely ignored by the mainstream media and established power. 2013 is Year 0; the year we say no more to the exploitation of mind, body, community, and environment while we audaciously forge a new way forward.

At least one citizen group, Solidarity Against Austerity coalition (many of who worked furiously to forge at least some public opposition to the Nike deal) will meet on Jan. 5, 5 PM — location TBA (but will be updated on the Facebook event page ASAP) — to discuss next steps. Nike’s actions will take center stage in the agenda.

[1/5/13 UPDATE: Open meeting to plan next action related to Nike deal on Saturday, Jan 12th at 5pm at St. Francis Church in SE Portland.]