By and large, bankers say, Washington is escaping the subprime mortgage meltdown - except, it seems, in Cowlitz County. A recent Wall Street Journal report cited by state economist Scott Bailey says that Cowlitz homebuyers took out 4,000 subprime mortgages from 2004 through 2006.

If that's the case, then subprime borrowers bought more than half of the houses sold in Cowlitz County during those three years. As those mortgages reset, "a rising number of foreclosures is likely in 2008-2009," Bailey warns.

It's just one more piece of bad news for a place that's already had its share.

Back in the day, Longview, Kelso and neighboring towns were home to an inordinately high percentage of good-paying, blue-collar jobs: logging, lumber mills, paper mills and aluminum smelters. But in the '70s, those jobs started going away. Between 1970 and 2006, the number of timber industry jobs was cut in half. The 2001 recession hit Cowlitz particularly hard: 1,800 manufacturing jobs evaporated - roughly one in five.

And - unlike what happened in some parts of the state - those good blue-collar jobs have not been replaced by good white-collar jobs. One problem, Bailey notes, is that Cowlitz County lacks an educated workforce: only 14 percent of adults have college degrees, compared to a statewide average of 30 percent; the percentage of high school drop-outs (14 percent) is also slightly higher than the state norm (11 percent).

The most-recent economic indicators are mostly bad. Unemployment jumped to 8.1 percent in March, up from 5.9 percent a year ago - well above the state average of 5.3 percent. The state reported big drops in construction employment (down 12 percent, or 400 jobs) and paper manufacturing (down 10.7 percent, or 300 jobs). Likewise, countywide retail sales fell 2.0 percent (compared to statewide growth of 6.2 percent).  Kelso's retailers reported a drop of 3.2 percent. (Longview's posted a 1.2 percent gain.) 

The housing market is holding on, for now, with fourth-quarter figures showing 2.9 percent gains in median home prices, but a 21-percent drop in sales volume.

On the less-gloomy side, the Port of Kalama remains one of the state's most-active shipping centers, and it's expanding its business park. The Longview business community, at least, is modestly hopeful about prospects for the coming year. The communities also are pushing hard to jump-start tourism, taking advantage of the county's position astride Interstate 5, at the gateway to Mount St. Helens.

But it will be an uphill slog, consultants warn, particularly for Longview, which they ripped as being especially unattractive to visitors. (Kelso got a better review.) "That's the impression we got, that you gave up," consultant Roger Brooks told Longview leaders. "Don't give up because all you'll do is drain it away even more."

Next week: The State of the State