TUESDAY, DECEMBER 7, 2021
Baker City, Oregon
A4
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news@bakercityherald.com
EDITORIAL
Public
money &
fossil fuel
investing
Oregon has more than $130 billion in state money
invested. It’s invested to make money for schools, for
state retirement plans and more.
And some people want the state to pull its invest-
ments from fossil fuel companies and other compa-
nies deemed inappropriate or undesirable.
For instance, state money is invested indirectly
in NSO Group through the state’s investments in
a private equity fi rm. Apple announced a few days
ago it was suing the Israeli-based company because
its Pegasus spyware is used to breach Apple prod-
ucts. Pegasus was allegedly used to gather informa-
tion that led to human rights activists, journalists,
business executives and others to be targeted. The
Washington Post reported Pegasus was used to
target phones connected to Jamal Khashoggi. He was
the Saudi columnist who was killed in 2018 in the
Saudi embassy in Istanbul. NSO has said it does not
operate the software that its clients use.
Are you proud as an Oregonian your tax dollars
are invested in fossil fuel companies and companies
like NSO?
Perhaps not. But the state can’t just pull its money
out. As state Treasurer Tobias Read and other mem-
bers of the state’s investment council have pointed
out, the overarching guidance and state law for the
council’s investments is “to make moneys as produc-
tive as possible.” State law would need to be changed.
There’s also been long-standing debate about the
power of divestment. If it is done with the direct
intention of fi nancially wounding companies, it may
not be that effective. Other investors may just scoop
up the opportunity to buy in when some divest.
Divestment can, though, create or reinforce a stig-
ma against certain kinds of businesses or business
practices. That may have a more powerful long-term
economic impact than just moving money around.
Divestment policy can get complicated. Who would
decide what is an inappropriate investment? What
would be the triggers? How often would that be
updated? Oregonians are already facing an unfunded
liability of more than $20 billion in its state retire-
ment system. If Oregon makes less money in those
investments, the liability goes up. That would mean
school districts in the state would have to pay even
more money for retirement plans for their employees
and less money on other school needs.
Divestment policy will make for good questions for
the candidates for governor in 2022.
Unsigned editorials are the opinion of the Baker
City Herald. Columns, letters and cartoons on this
page express the opinions of the authors and not
necessarily that of the Baker City Herald.
Your views
City should test water from new
well for chemicals
Baker City has been under terrible
management for a long time. Un-
ethical, self-serving, incompetent? At
times, I’d conclude all of the above but
today it’s the incompetence that both-
ers me. Look no further than the top of
Hillcrest and the city’s new “drinking-
water well” to see the latest example
of bad planning at the cost of millions
of dollars. Who was city manager dur-
ing the inception of this project?
Baker City’s municipal golf course
was fi rst opened in about 1935.
Therefore, the golf course ground has
undergone heavy chemical treatment
for the past 85 years. By this time, I
would suspect the groundwater below
the golf course might glow or be car-
rying toxins that might cause cancer.
The more we learn about glysophate
and other herbicides the more we are
learning about the dangers of con-
taminated groundwater below golf
courses. Research the topic on the
internet and you’ll fi nd volumes of
information.
Before going further into the most
expensive phase of this project, the
city should fi rst test the groundwater.
Specifi cally, the city should test for ni-
trates, nitrites, and what are referred
to as “forever chemicals.”
When the city climbed to the top
of a hill to drill down another 500 feet
below the base of that hill, to tap into
a probable toxic-stew, someone with
sense should have stepped in to stop
them.
After writing the above letter-to-the-
editor, I learned the state is going to
test 17 water sites in Oregon and two
sites in Baker County. I wonder if the
new drinking-water well is one of the
two sites to be tested.
Brian Addison
Baker City
OTHER VIEWS
Build Back Better, and inflation
By TRACY C. MILLER
After working on it for several
months, the House of Representatives
recently passed the Build Back Better
Act. It’s status in the Senate is uncer-
tain, but if enacted, it’s expected to
increase government spending by $1.75
trillion over 10 years.
With the legislation’s tax increases
and tougher IRS enforcement, the
Congressional Budget Offi ce estimates
a smaller, $250 billion increase in the
defi cit. But if temporary and sunset
provisions designed to keep the offi cial
cost down are eventually made per-
manent, as is likely with such things,
the total could conceivably increase by
as much as $2.5 trillion over those 10
years.
Whether or not the sticker price is
worth it, we must consider the hidden
cost of infl ation. President Biden claims
that because of the benefi ts to Ameri-
can workers and their families, it would
reduce infl ation. But the more it adds
to the national debt, the more infl ation
will rise.
Infl ation is not directly caused by
government defi cit spending. It’s the
result of the money supply, which is
controlled by the Federal Reserve, in-
creasing faster than the output of goods
and services. Since the beginning of the
pandemic, there has been close to a one-
to-one relationship between increases
in government defi cits and increases in
the money supply.
Government defi cits are funded by
selling treasury bonds. If defi cits are not
too large, they can be funded by borrow-
ing from the public and from foreign in-
vestors. But foreign investors have been
buying fewer U.S. government bonds
in recent years, and U.S. investors have
not increased their purchases of bonds
as the defi cit has increased. Thus, the
only way for the federal government to
sell the trillions of dollars of additional
bonds required to fund our recent, rapid
growth in government debt is for the
Fed to buy those bonds. This is where
the money supply increases.
We’re already experiencing the high-
est rates of infl ation in 30 years, and
it can be blamed on the expansion of
the money supply since the beginning
of the pandemic. In 2020, the money
supply increased by about 25%, and it
continues to increase at close to a 13%
annual rate in 2021.
As households spend more and
more of the additional money they ac-
cumulated from the various stimulus
programs over the last two years, prices
will continue to increase. Unless, that
is, the Fed reduces its purchases and
instead raises the interest rate it pays
on bank reserves. But large govern-
ment defi cits in the future would make
it harder to reduce bond purchases and
could increase political pressure on the
Fed to keep interest rates low.
That’s why the president’s claims
that the Build Back Better Act would
reduce infl ation is not based on sound
economic analysis. In addition to its
impact on defi cits, some of the spending,
such as the expanded child tax credit
(CTC), is likely to discourage work. The
original CTC, enacted as part of the
Tax Cut and Jobs Act passed early in
the Trump Administration, provided a
benefi t that increased with earned in-
come. The expanded CTC reduces this
incentive because parents with little or
no income receive the full amount of the
credit as a check from the government.
According to one estimate, it could
reduce employment by 1.5 million. Any-
thing that reduces employment would
reduce output, which would raise price
infl ation further.
The most expensive item in the
Build Back Better Act is a tax cut that
will largely benefi t those in the top 20%
of the income distribution in high-tax
states. Almost $300 billion of the bill’s
estimated cost comes from increasing
the cap on state and local taxes that can
be deducted from one’s federal income
tax liability.
Rather than increasing defi cit
spending and restoring tax loopholes
for the rich, why not focus on fully
funding Social Security and Medicare
benefi ts for retired Americans, since
those programs’ trust funds will soon
run out of money? It’s not exciting, but
taxes earmarked for those programs
no longer bring in enough to cover
promised program benefi ts — which in-
crease with infl ation. Why not consider
cutting spending or using revenue from
proposed tax increases to cover those
shortfalls? Reducing defi cits would
make it easier for the Fed to reduce the
size of its bond portfolio and raise inter-
est rates as necessary to bring infl ation
down.
Legislators must make these deci-
sions, but let’s be clear about the true
costs.
Tracy C. Miller is a senior policy
research editor with the Mercatus
Center at George Mason University.
CONTACT YOUR PUBLIC OFFICIALS
President Joe Biden: The White House, 1600 Pennsylvania
Ave., Washington, D.C. 20500; 202-456-1111; to send comments, go
to www.whitehouse.gov.
U.S. Sen. Jeff Merkley: D.C. offi ce: 313 Hart Senate Offi ce
Building, U.S. Senate, Washington, D.C., 20510; 202-224-3753; fax
202-228-3997. Portland offi ce: One World Trade Center, 121 S.W.
Salmon St. Suite 1250, Portland, OR 97204; 503-326-3386; fax 503-
326-2900. Baker City offi ce, 1705 Main St., Suite 504, 541-278-1129;
merkley.senate.gov.
U.S. Sen. Ron Wyden: D.C. offi ce: 221 Dirksen Senate Offi ce
Building, Washington, D.C., 20510; 202-224-5244; fax 202-228-2717.
La Grande offi ce: 105 Fir St., No. 210, La Grande, OR 97850; 541-962-
7691; fax, 541-963-0885; wyden.senate.gov.
U.S. Rep. Cliff Bentz (2nd District): D.C. offi ce: 2182
Rayburn Offi ce Building, Washington, D.C., 20515, 202-225-6730; fax
202-225-5774. La Grande offi ce: 1211 Washington Ave., La Grande,
OR 97850; 541-624-2400, fax, 541-624-2402; walden.house.gov.
Oregon Gov. Kate Brown: 254 State Capitol, Salem, OR
97310; 503-378-3111; www.governor.oregon.gov.
Oregon State Treasurer Tobias Read: oregon.treasurer@
ost.state.or.us; 350 Winter St. NE, Suite 100, Salem OR 97301-3896;
503-378-4000.
Oregon Attorney General Ellen F. Rosenblum: Justice
Building, Salem, OR 97301-4096; 503-378-4400.
Oregon Legislature: Legislative documents and information
are available online at www.leg.state.or.us.
State Sen. Lynn Findley (R-Ontario): Salem offi ce: 900
Court St. N.E., S-403, Salem, OR 97301; 503-986-1730. Email: Sen.
LynnFindley@oregonlegislature.gov
State Rep. Mark Owens (R-Crane): Salem offi ce: 900
Court St. N.E., H-475, Salem, OR 97301; 503-986-1460. Email: Rep.
MarkOwens@oregonlegislature.gov
Baker City Hall: 1655 First Street, P.O. Box 650, Baker City,
OR 97814; 541-523-6541; fax 541-524-2049. City Council meets the
second and fourth Tuesdays at 7 p.m. in Council Chambers. Mayor
Kerry McQuisten, Councilors Jason Spriet, Shane Alderson, Joanna
Dixon, Heather Sells and Johnny Waggoner Sr.
Baker City administration: 541-523-6541. Jonathan Cannon,
city manager; Ty Duby, police chief; Sean Lee, fi re chief; Michelle
Owen, public works director.
Baker County Commission: Baker County Courthouse 1995
3rd St., Baker City, OR 97814; 541-523-8200. Meets the fi rst and
third Wednesdays at 9 a.m.; Bill Harvey (chair), Mark Bennett, Bruce
Nichols.
Baker County departments: 541-523-8200. Travis Ash, sheriff;
Noodle Perkins, roadmaster; Greg Baxter, district attorney; Alice
Durfl inger, county treasurer; Stefanie Kirby, county clerk; Kerry
Savage, county assessor.
Baker School District: 2090 4th Street, Baker City, OR 97814;
541-524-2260; fax 541-524-2564. Superintendent: Mark Witty. Board
meets the third Tuesday of the month at 6 p.m. Council Chambers,
Baker City Hall,1655 First St.; Andrew Bryan, Jessica Dougherty,
Chris Hawkins, Travis Cook and Julie Huntington.