As Semitool, Columbia Falls Aluminum Company and Plum Creek Timber scale back their respective operations, many of our Flathead Valley neighbors are carrying pink slips in their pockets.
It has been a brutal couple months. The stock market has fallen off, banks have failed and mortgages have gone unpaid. Yet the vast majority of locals suffering had nothing to do with any of that. Montana never got caught up in the subprime mess, few banks here loaned money to those who couldn’t afford them and, before it failed, many in these parts had never heard of Lehman Brothers.
Yet we’re paying for Wall Street’s sins, as our biggest and oldest employers are seeing their profits shrink and thus contracting their payrolls. Some of these industries, such as wood products, were already waning before the slowdown. But this economy, it appears, has only accelerated the decline.
There are signs of hope. There are jobs. New businesses have cropped up around the valley. And unemployment in the Flathead and Montana is still well below the national average, which has ballooned to 6.5 percent, its highest rate in 14 years. But try optimism on the man or woman claiming unemployment benefits for the first time or to the parent ringing in the holiday season at the local food bank. Neither should be embarrassed – not in these conditions – but try telling them that.
Taxpayers are rightfully outraged that mortgage giants playing fast and loose with their profits are getting bailed out with our dimes (if only it were mere dimes). Now Congress is mulling whether to save the struggling automobile industry in Detroit, despite its failure to innovate and cut union costs as foreign competitors sped by. In Montana, especially, we have reason to be disgusted. Where did our self-reliance, resilience and common sense get us? What good did it do?
For one, we’re poised to take advantage of any glimmer of a turnaround. We’re somewhat insulated from volatile swings in the stock market, although not as much as first hoped. And while other states are asking the federal government for loans to cover their deficits, Montana has a surplus. In the upcoming legislative session, lawmakers will feel pressure to at least give some of that money back to taxpayers.
At a Kalispell Chamber of Commerce luncheon last week two separate storylines emerged. Bob Nystuen, president of Glacier Bank, was optimistic as he explained how most local financial institutions are stable, well capitalized and even prospering despite the downturn. But on the national level, Jim Lyon, first vice president and chief operating officer of the Federal Reserve Bank of Minneapolis, explained why and how the Fed is trying to save some of this country’s largest investment banks and corporations to stave off a catastrophe.
In the short term, University of Montana economists predict job losses to slow the Flathead’s growth rate from a robust 6 percent to a more pedestrian 4 percent. Of course, this could all change, and to a layperson all that’s clear about the economy is that the experts continue to contradict each other about when it will bull ahead again.
Americans have been down this road before, and bounced back. We’re told that our economy is the most resilient in the world and that once the Federal bailout package takes root, things will turn around. And employers here say they will rehire employees as the demand for the goods increase.
What’s maddening, though, is listening to our policymakers in Washington ponder, “How will Wall Street affect Main Street?” There are some unemployed workers in the Flathead who can answer that, as they wait for these leaders to fix their mistakes.