A region in decline

Once known for resilience, the Northwest now seems baffled as regards an economic strategy for the recession.
Once known for resilience, the Northwest now seems baffled as regards an economic strategy for the recession.
Mike Parks, dean of Northwest financial journalists, has changed his R word for the coming year from "resilience" to "recession." the Northwest's go-go economy, Parks writes in the newest Pacific Northwest Letter,($) is now a go-slow economy, with weakness across almost all sectors except population growth.

The dramatic loss of steam is already clear in the 2008 numbers. The core states of Washington, Oregon, and Idaho recorded payroll growth last year of only 0.2%, as compared to 3.1% in 2006 and a still-hefty 2.2% in 2007. This year, Parks estimates, the three states will be shedding about 1,000 jobs per week.

Among the new negative factors: a strengthening dollar is cutting into agricultural exports; aerospace, having ramped up to solve 787 supply problems, is probably now going to start shedding jobs, despite all the orders for new jets; the declining price of oil takes away some of the urgency for airlines to replace fuel-inefficient planes; the construction boom that was turning Idaho and Montana into "playgrounds for the rich" is clearly in a downward spiral, which also affects Oregon lumber markets; and Idaho and Oregon remain hurt by the downturn in the computer-electronics sector, much of which is manufactured outside Portland and Boise.

Isn't it time the region woke up? So far, the reaction of political and financial leaders has been to grab for all the stimulus bucks, putting dreams like a new convention center for Seattle right up against the federal trough. Another sign of business as usual is the use of threats (Boeing moving to Alabama, Microsoft getting REALLY ANGRY, hoteliers exacting political retribution if they don't get a convention center) to push along pet projects. Efforts to have a concerted, focused economic strategy were mounted after the 2001 downturn, with such efforts as the Prosperity Partnership, but they usually just create more rivalries among the regions and the agencies.

The regional political institutions are weak, and so is the business leadership, which has tended to migrate in the past decade from Northwest stable industries to the headier realms of venture capital and risky startups. The past generation of Northwest banking, timber, and manufacturing leaders is now supplanted by a new generation, but this generation is yet to find its political role, its influential organizations, and its publicly trusted spokespersons. Other metro regions, notably Denver, Phoenix, San Diego, are starting to make Seattle look like a region in decline.


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