The Oregon Education Association Summit

Several of us attended the Oregon Education Association (OEA) Summit today as part of SEIU's effort to show solidarity with the teachers. Many unions bargain with the state and public bodies and all public employee bargaining in Oregon now seems to be concessions-driven. On the face of it, it appears that the Governor has been counting on divisions between the unions to help push concessions and block a united labor-driven political response to the state's economic crisis. SEIU and OEA have a special relationship formed through the leadership and political efforts of both unions so the show of solidarity today had special meaning.

Response from the teachers to SEIU was more-or-less positive once they understood that we were there to support them. The large number of SEIU members and staff who turned out to the action at Salem's downtown convention center must have seemed overwhelming to many OEA members. One OEA member going into the summit told me that she hoped that we could pull off a national one-day general strike or sick day in support of labor's demands and this seemed typical of the mood in the room this morning. The summit not only marked the difficult times we are facing, but also celebrated recent victories against the ultra-right forces like Loren Parks and Bill Sizemore.

I stayed for the speech given by Timothy Duy. Duy is an economist now teaching at the University of Oregon. He spoke for one hour and then took questions. OEA leaders who spoke briefly before Duy recognized the global nature of the current economic crisis and saw Duy's talk, and the summit generally, as giving people the tools needed to help them discuss the current crisis with others.

Duy believes that the roots of the crisis extend back to the 1980s and the economic restructuring which took place in those years. He believes that the US economy relies more now on consumer spending and debt than it did before the '80s. If consumer savings and debt once provided a certain cushion for the economy, both are greatly stressed now and this has left corporations to come up with new financial products. I think that I also heard Duy say that the system relied on a recession as consumer savings disappeared and as debt became unmanageable and that this one-hoped-for recession has been prolonged and is now problematic.

Duy also believes that we are seeing key economic indicators that previously signaled the beginnings of recessions take nose dives now in the midst of the crisis. Moreover, he says, the natural or historic economic base for building a rebounding economy is gone: the Federal Reserve dropped interest rates to zero, TARP has been used to stop a total collapse of the system and everything that could go wrong in an economy happened at the end of 2008. Traditional economic analysis no longer applies and there are substantial differences between what we are now experiencing and what the US went through in the 1980s. For that matter, "payroll decline" is sharper and deeper now than it was in the bad 2001-2003 period. Real unemployment in the US is now at 14.8 per cent.

The current crisis is international, Duy recognizes, and he says that this is driven by export and import balances. Since Oregon is a leading state in terms of exports this international crisis has a particular twist here. Oregon's economy is more volatile than the US economy overall. Temporary employment in Oregon is way down, even with a slight increase in January. Trucking activity here has been sliding for the last 3 or 4 months. The sharp decline in building projects in Oregon may be levelling off, but at an extraordinarily small rate or number. All consumer confidence indicators are similarly bleak. This has made developing a real state budget impossible to this point. We may see an additional downward economic forecast in Oregon in May.

And the worst has perhaps not yet hit us, said Duy. An optimistic view is that we might see some improvement by the end of 2009, but we may also not see significant job growth until late in 2010 and the economic crisis for state and public service workers could extend well into the 2011-2013 biennium. The stimulus is filling a hole, but that hole is deepening and so the hoped-for positive effects of the stimulus packages may be muted. The housing bubble pulled the US out of the last recession, but Duy could not identify an industry or growth plan which will pull us out of the current crisis. He argued for a larger stimulus package and said that the story of the 1929 depression is that that the stimulus package used in the 1930s wasn't enough and that the second world war was itself a kind of economic stimulus. Economists and politicians know how to fill holes but not how to jumpstart the economy under current conditions, Duy said.

Duy is a populist but his view of the crisis and its special features coincides with some of our own Marxist thinking on the subject. I regret that I could not stay to hear all of the questions or to learn how OEA members plan to respond to international and national events and do bargaining under these terrible conditions. If Duy meant to warn us about the danger of war being used as a means of rescuing the economy, I hope that the teachers present heard this loud and clear and that we will see a big labor turnout at the March 15 antiwar rally in Salem.

Duy's Fed Watch blog is here.