Saturday, November 28, 2009

Goodbye, Black Friday - Hello, Cyber Monday

Posted By on Sat, Nov 28, 2009 at 11:52 PM

Black Friday 2009 has come and gone. Thankfully, there were no fatalities this year.

There were, however, two brawls at Wal-Mart stores in Southern California, according to Portland Examiner blogger Christina Gregoire: “In Upland, a manager had to call in police because two customers were fighting inside the store.  Also, the Rancho Cucamonga Wal-Mart had to call for help when two customers were knocking each other around in the electronics section. There were no serious injuries.”

Before we start feeling all smug and superior toward those vulgar Californians, the same blogger reports there was a full-scale melee at the Jantzen Beach Toys ‘R’ Us near Portland “as two women started swearing and spitting at each other.  About 100 people who were lined up in the dark started plowing in front of each other.  Fortunately, 14 police units were dispatched and got things under control.”

For some reason, The Oregonian chose to downplay this incident: “Police responded to a tussle that broke out at the Jantzen Beach Toys ‘R’ Us store as shoppers who'd started the line on Thanksgiving night clashed with late-comers gathering by the door.”

Fourteen police cars dispatched? Some “tussle.”

Still it was an improvement over last year, when the Black Friday shopping frenzy produced at least three fatalities. A Long Island Wal-Mart employee was trampled to death as crazed shoppers crashed through the store's glass doors just before the scheduled 5 a.m. opening. “According to police, officers who arrived to perform CPR on the dying man were also stepped on and injured, as was a pregnant woman,” Wikipedia records. Meanwhile, “two men shot each other to death in a Palm Desert, California Toys ‘R’ Us after they argued in the store over a toy.”

And it’s all in honor of the Prince of Peace.

I’ve been around for more than 60 Black Fridays now and I can’t remember when or how things started to get so crazy. According to Wikipedia again (for what it’s worth) the term “Black Friday” was first applied to the day after Thanksgiving in the mid-1960s by Philadelphia police, who hated contending with the crowds and traffic jams downtown. But there wasn’t any mention of shopping-inspired violence.

My guess is that the Black Friday insanity started after stores began opening their doors earlier and earlier – 6 a.m., 5 a.m., sometimes even 4 a.m. This has much the same effect as putting hundreds of starving wolves in a cage, dangling a cow carcass in front of the cage, then throwing open the cage.

The early returns show that Black Friday sales this year were basically flat compared with last year – up a mere 0.5%. Much of that has to do with the lingering recession, of course.

But I wonder if retailers haven’t gone so far overboard in hyping the Black Friday madness that it’s counterproductive – that a lot of people are either too scared or too repulsed to take part in the ordeal. Market observers point to a growing trend by shoppers to skip Black Friday and get equally good or even better bargains on “Cyber Monday” without having to wake up at 3 a.m. and risk life and limb.

Sounds like a good deal to me.

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Friday, November 27, 2009

Oregon GOP's Prize Turkey Is Back

Posted By on Fri, Nov 27, 2009 at 6:20 PM

Appropriately enough for the week of Turkey Day, political activist-cum-racketeer Bill Sizemore has announced he’s going to seek the Republican nomination for governor.

In a statement released to the far-right-wing NW Republican blog, Sizemore said he was running to “break the stranglehold the public employee unions have on the state of Oregon” because “he is the only one willing to challenge that behemoth head on.”

Sizemore, who now lives in Redmond, used to be a leading champion of anti-union and anti-tax ballot measures in Oregon until 2000, when a jury convicted two of his organizations on racketeering charges. In 2008 he ended up spending a day in jail on contempt of court charges stemming from his refusal to sign certain state and federal tax forms.

Sizemore admitted that his history, plus a court order barring him from engaging in any political fundraising, could prove a handicap. Also, on Dec. 21 the two state teachers’ unions are going to court to ask to have Sizemore jailed until he complies with a judge’s order to straighten out his finances.

But Sizemore vowed to push ahead anyway.

“I may have to run my campaign from inside a jail cell,” he said in his news release, “but either we break the stranglehold the public employee unions have on this state or the future of Oregon will be a grim one.”

Sizemore lost in a landslide to Gov. John Kitzhaber in 1998 and is likely to face the ex-governor again if he wins the GOP primary – an event that state GOP Chairman Bob Tiernan thinks is both unlikely and undesirable.

When The Oregonian’s Jeff Mapes called him for comment on Sizemore’s announcement, Tiernan said it surprised him and that he thought Sizemore “went off the deep end eight or nine years ago.”

That prompted Sizemore to fire back that Tiernan ought to resign if he wins the primary. “This is the first time I can remember a party head stating publicly that one of his party's candidates, a serious, well known candidate at that, went off the deep end years ago,” Sizemore said.

Well, we can buy the “well known” part.

Over on the liberal Blue Oregon blog, Carla Axtman sees Sizemore’s announcement as just another money-raising scam. She speculates that Sizemore is hoping he really will have to campaign from inside a jail cell so he can “lead his ardent supporters into the belief that he's Oregon's version of Nelson Mandela. He'll claim himself a political prisoner, locked away in an effort to keep him from thwarting the evil unions as they lay waste in their socialist takeover of our state.”

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Monday, November 23, 2009

Homer Pulls the Plug on His Bubble Blog

Posted By on Mon, Nov 23, 2009 at 8:55 PM

The mysterious proprietor of the BendBubble2 blog – I Hate to Burst Your Bubble, alias Homer, alias Butter, alias Paul-Doh – announced Sunday that after almost three years he’s hanging it up.

We have to give Homeboy props for being one of the first, if not THE first, to declare publicly that the emperors of Bend real estate were absolutely buck naked and our boom was a creation of smoke and mirrors as phony as the tourist industry’s claims of 300 days of sunshine and golf in January.

And for three years Homer continued to write perceptively, provocatively and often entertainingly (if you didn’t object to the blood-curdling obscenities) about our local real estate mess, how it got that way and where it’s going. A sample (heavily censored) from this week’s entry:

“This place has been CUT UP into ANT-SIZED plots of dirt, NEVER TO BE UNDONE, in an attempt to profit as much as is humanly possible from what is now an asset that only a (BLEEP)ING PSYCHOPATH would want – a house. But not just a house, a house that is practically INSIDE the (bleep)ing house next door.

“(BLEEP) you (bleep)ing builders, and the Bend City Councilor SELL OUT MOTHER(BLEEP)ERS for doing this. There is no UNDO button for this. These (bleep)holes will act as a blight FOR DECADES on this town.”

As a regular reader, my only gripes were that some of his weekly stream-of-consciousness rants were so long as to be virtually unreadable, and he refused to moderate comments so that his site became a sanctuary for every anonymous nutbag in Central Oregon, and far beyond.

So thanks, goodbye and good luck, Homer – if this really is goodbye. I have a feeling you’re going to pop up in a new incarnation someday, somewhere.

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Friday, November 20, 2009

365 Days of Fraud a Year?

Posted By on Fri, Nov 20, 2009 at 8:52 PM

Bend has always touted its beauty, its charm, its “healthy outdoor lifestyle” and its mythical “300 days of sunshine a year.” But we may be on our way to inadvertently becoming famous as something else: the real estate fraud capital of the United States.

Today a federal grand jury in Eugene handed up indictments against 13 people in connection with the Desert Sun Development company. The indictments charge that fraudulent activities by DSD’s principals – Tyler Fitsimons, 31, of Prineville; Shannon Egeland, 35, of La Grande and Jeremy Kendall, 33, of Redmond – and others associated with the company and its developments caused financial institutions to lose $9 million. The crimes alleged include conspiracy, bank fraud, making false loan applications to banks and money laundering, according to a news release issued by federal prosecutors.

In its story on the case today, The Oregonian notes that in May 2008 it published an exposé of "Desert Sun’s controversial employee home ownership program, in which the company assisted employees [to] get financing to build or buy homes. Many of the employees got nothing but vacant lots or partially built homes and a half-million dollar mortgage.”

In addition to the home ownership deals, today’s indictments charge fraud in connection with financing of commercial projects.

“The indictment alleges that the defendants sought construction financing for five commercial buildings in Bend and Redmond Oregon which were never built,” the news release says. “As part of the scheme, the defendants are alleged to have made representations that construction was underway when it was not.”

Besides the three principals, those indicted include John Partin of Bend, owner of Advance Steel; Robert Brink of Junction City, a construction loan officer at Umpqua Bank; DSD employee Garret Towne of Culver; mortgage brokers Shaun Little and Del Barber, both of Bend; bank loan officer Jeffrey Sprague of Bend; loan processor Barbara Hotchkiss of Redmond; building materials supplier Kevin Palotay of Bend; Teresa Ausbrooks of Bend, alleged to have made false statements about her income in applying for a bank loan to pay for a house DSD was building for her; and Michael Wilson of South Carolina, alleged to have been DSD’s residential construction superintendent.

Speaking of lifestyles, the release also mentions that the indictment “seeks forfeiture of a Ferrari, two Viper automobiles, and other assets related to the fraud and money laundering allegations.”

(I would just like to note in passing that all but one two of the alleged perps are good old Central Oregon boys and girls, not the stereotypical greasy California developer with a Lamborghini, a silicone-inflated trophy wife and 20 pounds of gold chains on his chest. We grow plenty of our own crooks here – no need to import ‘em.)

“The economic hit that a community like Bend takes in a case like this one is very real,” said Arthur Balizan, special agent in charge of the FBI in Oregon. “When a development company collapses under the pressure of fraud - as is alleged in this case - we are left with millions of dollars in losses, empty lots and abandoned buildings. Everyone loses.”

The real crime is that during the bubble days the local news media largely ignored the possibility that real estate fraud was happening in Central Oregon, including warnings from appraisal expert Richard Hagar, who began giving seminars here about fraud and how to avoid it way back in 2005.

Another crime is that, though the Desert Sun case is probably just the proverbial tip of the iceberg, the great majority of the scam artists who brought about Bend’s bubble and catastrophic bust most likely will skate.

“Off the top of his head, Hagar can think of at least 30 Bend residents who would deserve to be indicted, tried, and convicted for their role in the fraudulent activities that artificially inflated the local community's housing bubble,” Christina Davidson wrote in The Atlantic in early October. “However, he says, ‘The reality is only about 5% will ever be caught.’”

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Thursday, November 19, 2009

Walden Goes After the Feds on Swine Flu Mess

Posted By on Thu, Nov 19, 2009 at 8:27 PM

Last month Greg Walden caught the H1H1 (“swine”) flu, and he wasn’t happy about it. He also isn’t happy about the way the government handled the swine flu epidemic.

Yesterday the 2nd District Republican grilled federal officials in front of a House committee on why there’s a shortage of swine flu vaccine after the government earlier said there’d be plenty.

“We had testimony Sept. 15 from [Health and Human Services] Secretary [Kathleen] Sebelius and everything seemed to be on track and fine,” Walden asked HHS Assistant Secretary Nicole Laurie. “So, explain – who, did the manufacturers, weren't they straight with you? What's this rosy picture piece?" (See Walden’s question and Laurie’s response here)

It’s a good question, and a fair one. But if Walden really wants to get to the bottom of the swine flu vaccine mess he should haul a few drug company CEOs in front of his committee and ask them some pertinent questions.

Especially: “Why are you still using an antiquated technology to produce flu vaccine?”

The present method for making flu vaccine – growing the virus in chicken eggs – is the same that was used in the 1950s. A faster method is available: growing the virus in cultures of mammalian cells. Using that technology it’s possible to produce vaccine by the vat instead of a pint at a time.

Yet the federal Food and Drug Administration is just now getting around to approving the first cell-cultured flu vaccine for the American market – and that vaccine is for the regular seasonal flu, not swine flu.

Way back in April, the New York Times foresaw there wouldn’t be enough vaccine to deal with the coming H1N1 pandemic because of reliance on the time-consuming and archaic chicken-egg method. It noted that the federal government had awarded “$1.3 billion, spread among several manufacturers, to develop ways of producing the vaccine in vats of animal cells rather than in eggs. … The results so far have been mixed. Solvay, which was awarded the biggest federal grant, nearly $300 million, decided it was economically too risky to build a flu vaccine plant in the United States.”

Only one flu vaccine manufacturer, Novartis, so far has committed to building a cell-culture plant in the US. “The federal government is providing nearly $500 million in construction costs and guaranteed vaccine purchases,” the Times noted.

The drug makers are dragging their feet for the usual reason – money. Flu vaccine isn’t a high-profit item, and every year you have to gear up to produce one for a different flu strain. From the bottom-line standpoint, it makes more sense to invest in new drugs to cure erectile dysfunction than in new technologies that could stop a flu pandemic.

The swine flu snafu has conservatives asking, “If the government can’t even run a vaccination program, how can it run the health care system?” To me, it raises another question: “Does it make sense anymore to have a health care system that’s driven by the profit motive?”  

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Wednesday, November 18, 2009

Welcome to Chelm-on-the-Deschutes

Posted By on Wed, Nov 18, 2009 at 9:44 PM

In Jewish folklore there is a town called Chelm in which all the inhabitants are complete idiots.

Over the years many jokes have been told about the foolishness of the people of Chelm. For example:

Two men of Chelm are digging a foundation for a house. One says to the other, “We have a problem. What are we going to do with all this dirt we’re digging out for the foundation?”

“Not to worry,” the other man says. “We’ll dig another hole and put it in there.”

The first man is satisfied with this solution for a while. But then he says, “Wait a minute – that won’t work! Where will we put the dirt from the second hole?”

“No problem,” the other man assures him. “We’ll just dig a hole twice as big and put the dirt from the foundation and the other hole in there.”

There’s something very Chelm-like about the behavior of Bend’s “leaders” when it comes to dealing with growth. They haven’t figured out how to fix the mess created by the latest boom and bust yet, but they’re doing their damnedest to get another boom cranked up.

For example, the Business section of this morning’s Bulletin proclaims: “Over next 10 years, Central Oregon expected to see strong job growth … Economists say it will be fastest rate in the state.”

“State economists estimate that 11,000 new jobs will spring up in Central Oregon by 2018, while the state as a whole will see an increase of about 163,000 total jobs,” the story begins. “Job growth in Central Oregon’s three counties — Deschutes, Jefferson and Crook — is expected to rise the fastest in the state, increasing from 2008 staffing numbers by 14 percent, to 92,340 jobs. That’s compared with statewide growth estimated at about 9 percent.”

What’s the reasoning behind this rosy forecast?

“Over the last 10 years, Central Oregon has grown tons faster than the state,” according to Carolyn Eagan, Central Oregon’s regional economist. (“Tons faster” – that sounds real scientific, doesn’t it?)

“There was nothing to me that would indicate that wouldn’t happen after the recession,” Eagan continued.

In other words: Central Oregon had rapid job growth in the previous 10 years; therefore it will have rapid job growth in the next 10 years. Q.E.D.

Eagan says she doesn’t see any reason to think the next 10 years won’t be like the last boom period. I’m not an economist, but I think I can glimpse one: Virtually all of the region’s past job growth was driven by the real estate bubble, and it’s delusional to think another such bubble is going to inflate here within the next 10 years – if ever.

Nor should we want it to. The problem with bubbles is they burst. And when they do, it’s a disaster. People lose their jobs, their homes, their investments.

Meanwhile the city, which has become dependent on an ever-increasing revenue stream from rampant growth, finds itself without money to pay for the schools, police, firefighters, sewers, roads and other things that new development requires.

Yet the same characters who led the cheering for the previous bubble are out there shaking their pom-poms for a new one. Less than a week ago, for example, The Bulletin was trumpeting the news that Bend’s inventory of unsold houses had “plummeted.”

We could take the bubble and bust as an opportunity to re-examine our way of managing growth and try to create a pattern of steady, sustainable development instead of repeating the boom-and-bust cycle endlessly.

But my bet is we’ll just go on digging more holes.

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Saturday, November 14, 2009

Walden Demonstrations Prove to be a Dud

Posted By on Sat, Nov 14, 2009 at 7:10 PM

The anticipated big showdown Friday over Congressman Greg Walden’s vote on health care reform turned out to be a bit of a fizzle: Instead of encountering each other at Walden’s office, the Walden supporters stood on one corner of Greenwood and Wall and the opponents stood on the opposite corner, holding signs, shouting slogans and getting honks and waves from passing cars.

Walden was the only member of Oregon’s five-member congressional delegation to cast a vote against the health care reform package last week, and also to vote for the Stupka-Pitts anti-abortion amendment that was tacked onto the bill. The amendment and the reform bill both passed.

In Bend Friday, the pro-health care reform faction appeared to be better organized – anyway, they had more professional-looking signs – maybe because they started preparing earlier. The anti-reform counter-protest was kind of a last-minute response.

The rival crowds (if you can call them that; they were hardly big enough to merit the name) looked about equal in size. And although KOHD (see their video here) described them as “hostile,” they both seemed to be pretty polite and non-confrontational. (This is Bend, after all.)

A couple of the signs on the anti-reform side – “Obama Is a Killer,” for example – were a bit of over the top. But the only thing I really object to is the appearance of my picture on one of the anti-reformers’ placards. (If you watch closely you can see it about 40 seconds into the video.)

I would like to make it perfectly clear that I do not associate myself in any way with the anti-reform faction, and I deplore and denounce the unauthorized use of my picture in any rally, protest, demonstration or tea party by said faction.

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Friday, November 13, 2009

Let the Good Real Estate Times Roll! (Yawn.)

Posted By on Fri, Nov 13, 2009 at 8:26 PM

Happy days are here again in the local real estate market, if you go by the headline in yesterday’s Bulletin.

“Housing inventory plummets in Bend,” the headline said.

“Plummets,” no less. Not merely “drops” or “falls” or “declines,” but “plummets.”

The proof of the plummet, according to a report by the local Bratton Appraisal Group, is that in mid-November of 2008 there were 1,365 single-family homes on the Bend market, but as of Nov. 10 this year there were only 782.

The drop in inventory, according to Bratton, is mainly due to an increase in sales. In October 175 single-family homes were sold in Bend, the most in any month since August 2006.

So the outlook is nothing but blue skies from now on, right? Well, maybe. But there are other possible factors behind the inventory drop that The Bulletin doesn’t appear to have looked at – or at least given much weight to.

For instance, how many homes have been taken off the market because their owners have simply given up trying to sell them? How many others have been taken off temporarily because we’re now in winter, and winter is always the toughest time to sell a house?

Maybe the biggest question is how much “shadow inventory” is lurking out there in the form of houses that are in the foreclosure process or have been foreclosed on but not put on the market yet. The Bulletin story does address that issue, somewhat.

Bill Watkins, a California economist who tracks the Bend market closely, “believes banks have generally been slow to list foreclosure properties, and that may account for some of Bend’s decline in inventory,” the story says. “More than 3,000 notices of default [the first stage in the foreclosure process] have been filed in Deschutes County this year. ‘There’s some evidence banks are slowing down their foreclosure process to keep the market more orderly, but that’s probably not enough to account for a 50 percent decline in inventory,’ Watkins said.”

And the experts acknowledge that the recent buying spree (such as it is) has been driven by low mortgage interest rates and the $8,000 federal tax credit for first-time buyers. That credit was due to expire at the end of this month, but Congress extended it to April 30. It also enacted a $6,500 credit for buyers who have lived in their present houses for at least five years, and that should spur sales too.

But what happens then? It reminds me of the old joke about the guy who leaped off the top of the Empire State Building and, as he passed the 35th floor, called out: “So far, so good!”

If The Bulletin didn’t have a track record of first being in denial about the bursting of the bubble (“It won’t happen here – Bend is too special!”) and then trumpeting every crumb of positive real estate news as if it was the Second Coming, I might put more credence in this latest declaration that the good times are about to roll again. As it is, I’ll wait and see.

Meanwhile, Jeff Mapes of The Oregonian is hailing developer Dave Hill for trying to transform the former Brightwood mill site on SW Century Drive into a retail center – sort of a mini-Old Mill District.

“Clearly, some folks are betting that Bend has too much going for it to stay down for long,” Mapes writes. “It's the kind of optimism I've seen in communities that have made the transition from their traditional natural resource-based economy.”

I wish Hill all the success in the world, but frankly I don’t see what Bend has going for it now that it didn’t have when the bubble popped. In fact, it has a lot less now in terms of jobs and economic opportunity.

And as for transitioning from a natural resource-based economy, Bend has been trying to do that without much success for about 30 years.



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Thursday, November 12, 2009

Libs vs. Teabaggers Smackdown in Bend Tomorrow?

Posted By on Thu, Nov 12, 2009 at 7:49 PM

There could be a showdown between liberals and the tea party faction tomorrow at Rep. Greg Walden's Bend office - or maybe not.

Last week Walden cast a vote in the House against the Democrats' health care reform bill, which includes a form of the "public option" - government-supported health insurance that people could choose instead of a private insurance policy. He also voted for the Stupka-Pitts amendment, which prohibits any federal money from going to any insurance plan, public or private, that pays for abortion except under very limited circumstances.

The liberal MoveOn organization sent out a mass e-mail on Monday urging people to show up at Walden's office at 1051 NW Bond St. at noon Friday to protest Walden's votes in the House and express support for passage of a similar bill by the Senate.

"The House bill isn't flawless," the e-mail said. "It includes a compromise version of the public option and an ugly anti-choice amendment. But it's a huge step forward: it would expand coverage to 96% of Americans, offer more choice through a national public option, and help end Big Insurance's stranglehold on our health care system. And the only way we'll get anything like it through the Senate is if we all come out right now and demand it."

Rather belatedly, the right-wingers apparently decided to attempt a counter-demonstration.

"A liberal rally has been planned at Congressman Greg Walden's office at noon on Friday, November 13th to support the Obama government take-over of our health system and more regulations in our lives and in our doctor's office," the Oregon Catalyst blog wrote yesterday in the usual hysterical fashion. "This has prompted some to call for a counter-rally at Congressman Greg Walden's office at 11:45 as a show of support for Walden and the free-market [sic]. Expect to see a converging of people this Friday at [Walden's office]. This could be interesting."

One thing that's already interesting is that the right-wingers are telling their troops to muster at Walden's office 15 minutes before noon. Are they hoping to get there before the liberals do and cram the office so they can't get in?

I'm thinking MoveOn should have researched the voter registration rolls of the Bend area before calling for this thing. There are still a hell of a lot more conservatives than liberals in this neck of the woods - as evidenced by the fact that John McCain carried Deschutes County over Obama (narrowly) in 2008.

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Saturday, November 7, 2009

Ex-Blazer Enters Governor Race - Almost

Posted By on Sat, Nov 7, 2009 at 7:39 PM

Chris Dudley, who some around here may remember for playing two six seasons at center for the Portland Trailblazers, is putting out feelers about a run for governor on the Republican ticket next year.

The 6’11” Dudley had a not particularly distinguished NBA career, knocking around among six different teams and amassing a career average of 3.9 points and 6.2 rebounds per game. He retired from pro ball in 1998, after which he founded the Chris Dudley Foundation to help kids with diabetes. (Dudley himself was diagnosed with diabetes at age 16.)

Dudley hasn’t formally announced his candidacy yet, but he’s put up a one-page website that announces the formation of “Friends of Chris Dudley” and asks for donations. “I'll make a decision soon and report back,” he says on the site.

Whether he ends up running or not, the reaction to Dudley’s exploratory move provides insight into the curious thought processes of Oregon conservatives.

For instance, most people would regard Dudley’s charitable work as a positive, but at least some Oregon Republicans don’t. “Working with charities ought not correlate directly with good government. ‘Charitable’ politicians have a tendency to donate billions of dollars of other peoples’ money to help the poor and the needy via government run social programs,” says one anonymous comment on the Oregon Catalyst blog.

Another objection to Dudley, as conservatives see it, is that he’s working with Portland political strategist Dan Lavey, who also advised former Sen. Gordon Smith, whom conservative Oregon Republicans see as a betrayer of the One True Faith.

“Dan Lavey is calling the shots on Dudley?” writes another Oregon Catalyst commenter. “Oh boy, talk about the kiss of death! This is a very bad sign for Chris Dudley's prospects. … Lavey engineered Gordon Smith's loss [in 2008] by systematically ensuring that Smith, year in and year out, continued to give the middle finger to conservatives.”

Let’s see … Oregon is one of the bluest states in the country. It hasn’t voted for a Republican presidential candidate since 1984. It hasn’t elected a Republican governor since 1986 1982. It has only one Republican in Congress. Democrats control both houses of the state legislature. Not a single Republican holds a statewide office.

And Gordon Smith lost because he wasn’t conservative enough. The logic is breathtaking.

When you get tired of laughing over that, check out the funny video The Oregonian’s Jeff Mapes has put up on his blog showing Dudley getting knocked on his ass by Shaquille O’Neal. It might turn out to be a preview of what the Democratic gubernatorial nominee will do to him.

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Friday, November 6, 2009

Mount Bachelor Academy: Some Unpleasant Questions

Posted By on Fri, Nov 6, 2009 at 9:39 PM

Things are not looking good for Mount Bachelor Academy, one of those special boarding schools for rich kids with problems. The state Department of Human Services has suspended the Prineville school’s license and told parents to take their kids away.

And this morning’s Bulletin reports that the Crook County Sheriff’s Office is looking at a possible criminal investigation.

The problems at the academy have been known since last April, when a number of students and at least one employee reported cases of physical and psychological abuse.

TIME magazine wrote back then that “according to 10 students, two separate parents and a part-time employee interviewed by TIME … Mount Bachelor Academy regularly uses intensely humiliating tactics as treatment. For instance, in required seminars that the school calls Lifesteps, students say staff members of the residential program have instructed girls, some of whom say they have been victims of rape or sexual abuse, to dress in provocative clothing — fishnet stockings, high heels and miniskirts — and perform lap dances for male students as therapy.” Students allegedly also were deprived of sleep, food or use of the bathroom as part of their “therapy.”

Bend merchant and blogger Duncan McGeary sees a funny side to this, speculating on whether it will add to Central Oregon’s reputation as the world epicenter of weirdness: “Holy Cow. Right up there with the deer fragger, the pregnant man, and the balloon lawn chair guy.”

For me, the story of Mount Bachelor Academy raises some more troubling questions. Such as: “Why the hell did it take the state so long to shut the place down?” Six months seems like more than enough time to either verify or discredit allegations made last April.

And the April accusations weren’t even the first red flag: According to TIME, similar charges led the Oregon DHS to investigate the academy back in 1998.

Second question: Why are places like Mount Bachelor Academy allowed to operate in what appears to be a virtual regulatory vacuum? The company that owns it, the Aspen Education Group, operates 16 other boarding schools and camps all around the country. These programs are not cheap: Tuition at Mount Bachelor Academy ran to $6,400 a month.

Aspen’s website provides no information beyond vague generalities about the therapies used or the credentials of the staffs at its schools. The website’s list of corporate officers doesn’t indicate that any of them hold an MD or Ph.D.

The site does, however, offer an “assessment test” to help parents decide if they should send their child to an Aspen facility, asking among other things whether he or she has “disregarded family rules and parental guidance” or “had problems in school (i.e. poor grades, challenging authority, etc.)” (Try to find a kid, especially a teenager, who hasn’t done those things at one time or another.)

Mount Bachelor Academy and other boarding schools that use a similar “therapeutic” approach also have an unsavory intellectual pedigree.

According to the TIME story last April, “The techniques that Mount Bachelor allegedly uses, while unconventional, are not new. They are similar to the tenets of the once popular ‘human potential movement’ of the 1960s and '70s, which purported to change people's lives through intense emotional experiences. The movement grew out of the practices of Synanon  and other California experiments in utopian living, which later helped spawn so-called large group awareness training programs, such as LifeSpring and est.

“Synanon began as a drug-rehabilitation program before morphing into a controversial cult” – which was disbanded after being involved in various criminal activities – “and is credited with putting forth the idea that confrontation and boot-camp-style breakdown tactics could cure teen misbehavior and addiction.”

“Although many people report being helped by cathartic seminars, studies suggest that programs like LifeSpring do not produce lasting change,” the TIME story continues. “Indeed, in the 1980s and early 1990s, LifeSpring lost millions of dollars in lawsuits related to suicides and psychiatric hospitalizations of participants. Most mental-health experts today strongly disagree with the use of brutal confrontation or humiliation as therapy — particularly for vulnerable youths who have troubled pasts.”

Now for the third and probably most troubling question: Why, after so many horror stories have come out, do parents continue to send their children to these schools? I’m sure most of them have their kids’ best interests at heart – or think they do. But I can’t help wondering how many just want to get a troublesome child out of the way and are willing to pay heavily for it.

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Thursday, November 5, 2009

Drive, Drive, Drive for Prosperity!

Posted By on Thu, Nov 5, 2009 at 12:16 AM

The pronouncements of Dr. Randall Podenza, an economist associated with the right-wing Cascade Policy Institute, usually leave me scratching my head. But his latest one had me wanting to ram it into a wall.

Podenza’s thesis boils down to this: More driving = more prosperity. As reported on the Oregon Catalyst blog, Podenza’s study “finds that ‘VMT [Vehicle Miles Traveled] is a large and statistically significant driver of GDP [Gross Domestic Product]’ and cautions that artificial attempts to limit driving through taxation or regulation will cause a significant decrease in economic output.”

CPI President John A. Charles Jr. declared: “If Oregon politicians believe in job creation and increased household income – as almost all claim they do – then they also have to be in favor of increased automobile driving and a better highway system. Reconciling the conflict between the positive effects of driving and our state’s anti-driving policies will be one of the central challenges for decision-makers in the near future.”

Does driving contribute to the GDP? Sure it does. But it’s important to understand what the GDP is. It’s a measure that includes all goods and services produced by the economy – without regard to whether they’re positive or negative, beneficial or harmful. Building a new prison adds to the GDP just the same as building a new high school.

The cost of buying, maintaining and repairing cars goes into the GDP. The cost of gasoline goes into the GDP. The cost of building and repairing highways goes into the GDP. The cost of paying police to patrol those highways goes into the GDP. The cost of medical care for those injured on those highways goes into the GDP. The cost of paying paramedics to pick up the bloody remains of those who are less lucky goes into the GDP.

So, yes, as driving increases, GDP increases. But not all of that increase is a good thing. And if people switch from cars to other modes of transportation, that will contribute to the GDP too. It will cost money – a lot of it – to build, operate and maintain the rail lines and bus lines they use.

It’s not hard to imagine Randall Podenza’s counterpart in the 1880s doing a study proving that increased use of horses contributed positively to GDP growth, and that the trend toward those newfangled “horseless carriages” was a menace to the national economy.

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