Wyoming goes up, USA goes down

Monday, September 29, 2008

By Bill Sniffin

Out here in our isolated island of Wyoming, we sometimes seem immune to the economic calamities elsewhere in the country.

As news of huge international USA-based firms like Merrill Lynch, AIG, Bear Stearns, Fannie Mae, Freddie Mac and others either sink or get rescued by the government, a person has to wonder if these economic disasters can affect our lives here.

It may be coincidental, but it seems that the last two boom-bust cycles in Wyoming and the USA have been at two ends of a teeter-totter. The Cowboy State’s economy is counter-intuitive to the economy of the rest of America.

In the late 1960s and early 1970s, the USA was booming.  Wyoming was hurting.  The late Gov. Stan Hathaway reportedly said that when he took office in 1966 he discovered the state had just $80 in its general fund.
Wow, you have to go back to some dustbowl states of the 1930s to find state governments in that bad a fiscal shape.

Then, Wyoming’s economy took off in the mid-1970s and peaked in 1981. Then, it tanked in the mid-1980s and early 1990s.
While we struggled to get back on our feet, the USA was doing very well from 1985 to 1995.
Since 2002, our statewide economy has been soaring. Again at the same time, the national economy has been slipping.

Today in 2008, the economy is the biggest, single issue in the presidential election. Everyone is saying we are in a recession. Here in Wyoming? We have $11 billion in the bank and things are going very well in most places.
Thus, the theory – as the USA economy goes down, does Wyoming’s economy go up?

If this is true, a very simplistic answer could be Wyoming’s focus on commodities as its economic drivers. With coal, oil, natural gas and Ag products as the key components of our economy, well, when prices are high for these items our economy soars here, too.

When these commodity prices are high across the country, perhaps it is a catalyst that causes plants to close, jobs to be lost and politicians to start using “it’s the economy, stupid” as their mantra for getting elected.
Obviously, all things are more complicated than this.

Today, most observers believe the demand for commodities worldwide will keep Wyoming’s economy soaring, no matter what happens to the rest of the country.
Former Wyoming Business Council CEO Tucker Fagan is one of the true believers: “Give credit to leadership and the legislature for investing the mineral tax receipts in people (Hathaway Scholarship Program, Community Colleges and Dept of Workforce Services) and hard infrastructure. This will give Wyoming a step up to diversify the economy. When we did not have business parks, available water, sewer, power, broadband, etc., we just were not in the game. Now, we will be ready when the rest of the economy comes out its current malaise.”

One of the ramifications of the Wyoming bust of the 1980s is a situation known as the state’s “lost generation.”  Because so many middle-class jobs disappeared at that time, a whole generation of workers (and families) disappeared, too.
Where did these people go?  Would they come back now that times are better here?

The impending crisis of retirees in our state is a reflection of this situation.  
With the USA currently in a recession, it reminds me of how our state fared during the Great Depression.

Some real old-timers here in Lander, anyway, have told me that they didn’t think Wyoming was hurt as bad in the 1930s as the rest of the country.
All three banks here stayed solvent and people pitched in to help each other out and they worked their way through it.

A local Fremont County legend blames the strong rivalry between Lander and Riverton on the failure of several Riverton banks in the depression. Thus, their merchants had to come to Lander to get business loans, and left feeling they were treated poorly. 

Glad to have those days behind us.


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Wyoming goes up, USA goes down | Planet JH News Article: General News

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