economies and elections

Wednesday, October 29, 2008

By Bill Sniffin

 “With the stock market in turmoil, I now refer to my retirement account as my 201 (k) since it is half what it once was.” – a retiree’s complaint.

Although the politics encountered during a recent road trip around the region was very interesting, taking the temperature of the local economies was perhaps even more fascinating.
   
Awhile back, I wrote that Wyoming’s economy seems to be counter-intuitive to the rest of the country.  It seems that when Wyoming’s economy is good, the USA economy goes down and when the rest of the USA is up, then Wyoming goes down.
  
 With what is happening across our great country we can only hope that this counter-cyclical theory is true.
   
Since Wyoming is such a commodities-based economy, it can only be hoped that prices stay somewhat stable to protect our jobs and our severance tax basis.
  
 Who would have guessed that a barrel of oil would be cut in half in just four months?  After paying over $4 per gallon for gas in July, we would pay $2.29 per gallon this week?
   
Oil, of course, is an energy commodity and the bottom has fallen out of its price strucure.  Coal, natural gas and uranium prices are also dropping, but not quite so severe.
   
For one, speculators had artificially inflated the oil price – the same crowd that wrecked Wall Street.
   
As I traveled around, it was easy to gauge what was happening in our region.
   
As a member of a regional board from Wyoming, Montana and Alaska, it was good news to hear at a meeting in Helena, MT, that folks from all three states see their economies as doing well.
   
Montana has a $1 billion surplus and Alaska has been piling up the money for years.  Wyoming is anticipating a $1.5 billion surplus for the upcoming biennium.
   
Down south in Denver, my brother who is in the window contracting business drove me by six spec homes priced at over a million bucks apiece, where the contractors are being wiped out because of interest payments.
In Montrose, CO, the local newspaper publisher Steve Woody, said overall, his town is doing well.
  
 One month ago we were in Iowa and, frankly, have never seen that economy so robust.  The farmers are all millionaires and local manufacturing is booming.
Two weeks ago I attended a Seasonality Summit in Cody, organized by the Yellowstone Business Partnership.   Big topic was coordinating tourism, road construction projects and mass transit involving Wyoming, Idaho and Montana.
The conference was a great first start but the collapse of the national economy was not mentioned because it was hours away from happening.
   
Now looking back at that meeting, someone probably needed to mention that Americans have driven 50 billion miles less than just one year ago.  Drivers traveled 15 billion miles less just in the month of August this year compared to August 2007.

This is an amazing trend that will have huge effects of tourism, fuel taxes for road repairs and how fast our infrastructure will be declining.
   
Enough on the economy.
This column is scheduled for print a few days before the election.  Two things caught my eye recently.
   
• First was Gov. Dave Freudenthal’s endorsement of Democrat Gary Trauner for the U. S. House, which included quite a rebuke to Republican Cynthia Lummis.
   
He chided her for claiming she had anything to do with increases in Wyoming’s investments while State Treasurer. He said:
  
 “It's the same thing in another of the ads that talks about during her tenure, she developed $5 billion in state money. The truth is, anyone can take credit for that. I can take credit for that and the Legislature can take credit.
“Real reason that money exists is the way that this economy has been over the last six years. I (could) make a persuasive argument that it all happened because I was elected Governor.

“We need to be realistic about what we say. As politicians, we shouldn't believe our own press releases. The reason this state is prosperous and the reason we have the money that's available, is not by virtue of somebody who was in office, whether they were Governor or Treasurer, but by virtue of the fortuitous circumstances of this state's economy.”

• My second thought is of the amazing crowds Barack Obama turned out in Colorado a week ago – 100,000 in Denver and 45,000 in Fort Collins.
Most said they wanted to see “our next president” in action.  Hard to argue with that logic.

Check out Bill Sniffin’s columns and blogs at  HYPERLINK "http://www.billsniffin.com' He is a longtime Wyoming journalist from Lander who has two books that are available at fine bookstores.


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