Yet another economic assessment finds Montanans dead last in average income. This is not news. Recent suggestions from the Martz administration for changing that unenviable image include revising regulatory and tax policy to make the state more “business friendly.” This is not news, either. In spite of the fact that making Montana more business friendly has been the stated goal of both Republican and Democrat governors and legislatures for decades now, the “rising tide” promised by their economic theories has yet to float us upward. Likewise, our “business-friendly” politicians have always gone out of their way to address theoretically onerous tax and regulatory changes—mostly by getting rid of them. Despite testing a host of economic theories on Montanans, from cutting the coal severance tax to electricity deregulation, here we sit, resting comfortably on the bottom. Hate to say it, but empirical evidence suggests state tax and regulatory changes probably aren’t our problems—nor the solution. What if the real problem, as suggested by real evidence, is that Montana is caught in the double-whammy of global climate change and global trade policies?
Let’s start with what we know is real: like the last decade’s collection of the hottest years on record, another year of low snowpack, and all indications that Montana is heading into the fourth consecutive year of drought conditions. Already, farmers are saying this year’s winter wheat crop is probably toast. The reason? Insufficient early moisture and lack of snow cover. It is also no secret that warm temperatures and the lack of early snowfall affected everything from elk hunting to ski area operations. Come spring, the thin snowpack will produce little runoff, negatively affecting everything from forest fires and recreation to irrigation and hydroelectric generation. These impacts are real, not hypothetical—and they are hammering Montana’s economy in thousands of ways.
The free trade policies so openly advocated by our current batch of political leaders are also creating real, not theoretical, impacts. Take the commodity imports, for instance, that are being blamed for the ag and timber industry’s economic woes. It doesn’t take a rocket scientist to look at a map and figure out Canada has just about the same natural resource base as Montana. Not only do they have lots of land to farm or ranch and lots of trees to cut down, they have considerably fewer people to supply. What else would they do but export their commodities? Unfortunately, those commodities are in direct competition with ours. But this is how the so-called global marketplace works: the cheapest raw materials and the cheapest labor win. If you support the concept of globalization and the politicians who espouse it, then this is what you get. In spite of our last-place standing, apparently Montana is still not winning the global race to the bottom to offer the cheapest available labor or materials. Free trade sounds like a great idea, but the realities are turning out to be significantly different than the theoretical benefits for Montanans.
Due to the global nature of both climate change and trade policy, as much as they hate to admit it, there is very little that Montana’s governor or Legislature can do to significantly affect the impacts caused by these realities. We could give away our natural resources in a tax and regulation vacuum, but our effect on global markets would be unnoticeable. Once the goodies were gone, we’d be left with nothing more than a trashed environment and a host of social and health problems from a poor, unemployed workforce. Not only would we have to pick up the pieces, we’d get to pay for them, too. We know this is reality, not theory, because we’re already living it.
So what can we do to change the impacts of global warming and trade policies? First, we can and should be talking about them in real terms. Given its impact on Montanans, global warming is a real threat to our way of life. No snow=no water=no economy. Some still argue that man is not responsible for global warming, but a vast number of climate scientists believe there is a greater likelihood that our activities are contributing to the problem. In that case, and considering the direct, real impacts to Montana, it makes little sense for our politicians to support policies that contribute to global warming. More pollution, more coal-fired power plants, and fewer forests obviously take us in the wrong direction. But guess which direction the Martz administration is going.
The same goes for trade policies. We may not be able to affect global trade, but we can decide, as a people, how far we are willing to go and how much we are willing to sacrifice on its altar. What Montana is really known for is the superb quality of its natural environment. If you don’t believe it, pick up any national magazine that features the outdoors and you will almost always find at least one article about hunting, fishing, or hiking in Montana. Given the global impacts from worldwide natural resource exploitation, Montana’s clean, healthy, natural environment will only become more valuable in the future. Smart policymakers would obviously recognize this value and work tirelessly to protect and enhance it. But again, the current administration is on the wrong side of wisdom.
Instead of discussing these issues, which are having real impacts on Montana, we are likely to hear a great deal about the theoretical benefits of tax and regulatory changes in the coming days. Perhaps this time the free-trade, supply-side theories will work out. But there is a far greater chance that Montana will continue to be buffeted by the double whammy of global warming and trade practices while our current batch of political leaders continues to look the other way, live in denial, and support exactly the wrong policies.
When not lobbying the Montana Legislature, George Ochenski is rattling the cage of the political establishment as a political analyst for the Missoula Independent.