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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

January 12, 2010 at 9:40 AM

Is Tim Eyman the biggest threat to the Washington economy?

Top of the News: How, exactly, does Tim Eyman make his living? Just a question.

I think of him when I see what was once the nation’s finest ferry system struggle, among his other dolorous achievements. He’s back with yet another initiative, which would require a two-thirds majority of the Legislature or a public vote for all tax increases.

Such measures have been disastrous in other states. They also run contrary to American representative democracy. Perhaps worst of all, they keep elected officials afraid of having grown-up conversations with voters about the costs of government in complex, urbanized 21st century societies in a competitive world and how to appropriately fund them.

As conservatives used to say, there’s no free lunch. No wonder tax rates on the rich were 70 percent during the reign of terror of that socialist Dwight Eisenhower.

Washington has gained one of the nation’s strongest economies partly because of its investments in higher education, transportation, ports, incentives for high-end companies and high quality of life with parks, conservation, etc. It has lured world-class talent thanks to the diversity, tolerance, and stewardship that represent values such as caring for the most vulnerable citizens.

The state is already in a budget crisis that is threatening these advances; the fiscal shortfall is also throwing government employees, middle class citizens, onto the jobless rolls. In other words, the state’s fiscal crisis and cuts will bear heavily on Washington’s ability to compete in the world. And if low taxes were the only competitive elixir, places like Mississippi, Arizona and Somalia would be up there with Singapore.

Washington already has a misshapen tax system, with a regressive sales tax that hits the working poor the hardest. Yet we can’t even have a grown-up discussion because of fear of Eyman and the loud, “drown the government in a bathtub” trolls.

If Eyman is just here for initiative democracy — which the Founders would have considered mob rule — why are his always so destructive? How about an initiative to restore the ferry system, or increase university funding, or to make sure that the worst performing public schools have the resources to ensure success?

Just asking questions.

The Back Story: EnterpriseSeattle will hold its 38th annual economic forecast conference from 7:30 a.m. to 1:30 p.m. Thursday at the Washington State Convention and Trade Center. Gov. Chris Gregoire is the keynote speaker. They’ll have much to discuss.

On my list would be: retaining aerospace; identifying “Great Reset” threats to the regional economy, especially software, game development and biosciences, and developing strategies to counter them; how to maintain diversity in the economy, including the “messy,” unsexy industries that are still important; addressing persistent and structural unemployment, and maintaining and enhancing our research base.

This may be a very slow-growth decade. A possible result is that is mostly freezes things in place — not a bad thing for relatively strong Washington and Seattle. But that’s only a domestic picture. If China avoids a crash — by no means a given — and it, along with countries like India and Brazil resume robust expansions, the risks to our assets only increase.

Today’s Econ Haiku:

The big banks love fees

So how come they’re lining up

To oppose payback?

Comments | More in Tax policy

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