Author: Evelyn Pyburn

What it Takes

20 October 2020
Evelyn Pyburn
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By Evelyn Pyburn

Shortly after the break-up of the Soviet Union, I read about how the US was sending advisors to Russia to tell them how to do it – how to build an economy. One was left to assume that meant a free market economy, but when one saw who all was involved, it was puzzling what the US government was really up to.

There was no doubt that none of the advisors being sent to advise had anything to do with free markets, entrepreneurship or business enterprise… they were all bureaucrats and politicians of one sort or another. They were undoubtedly experts on top-down, control and command economies. What they thought they could teach the communists about that is unfathomable.

It wouldn’t have been surprising to learn that the expert advisers involved believed their regulations, taxes and edicts were the reason the US had a strong economy. It is scary how few people understand what makes for a strong economy or what it takes to run business.

It is truly sad to realize how few people recognize the beauty of free markets and Capitalism.

Nowhere in the reports did it mention the basic element that Russia or any nation has to have in order to have a vital, vibrant economy – freedom.  There was no mention of advising Russia about the need to establish a foundation of individual freedom that would allow citizens to pursue dreams.

That is the secret that was discovered with the establishment of the world’s strongest and most successful economy in all history.

As we celebrate the entrepreneurship of Montana business people in this issue, we are fundamentally celebrating freedom. To encourage entrepreneurship and nurture businesses to great heights requires the freedom to make choices and decisions. Individuals have to be free to try, to succeed and to fail and to start all over again, if they choose. None of that requires government intervention – in fact, quite the contrary.

Successful businesses need an environment in which the law of supply and demand rules rather than rules and regulations and skewed tax laws, through which government picks winners and losers. Entrepreneurs need a society in which citizens are free to act and to conduct voluntary exchanges of value for value.

A system that results in a strong, rich economy is one in which government is restrained to a very few basic roles, the most important of which is shoring up and protecting private property rights. Without private property rights there is no chance for the country or its citizens.

Part of the protection of private property rights includes protecting all citizens against criminal acts and fraud and the use of force one against another, except in cases of self-defense.

And a vibrant economy needs government to recognize and enforce private contractual agreements.

Only when government performs its legitimate roles in those regards, only then do citizens have the predictability, security and confidence to take risks, to explore, to create and to labor in ways which result in new products and services and efficiencies that raise the standard of living for all, including surpluses so large that they overwhelm private and institutional benevolence.

When we celebrate those among us who take it upon themselves to start and manage a business, to produce and to employ, it is all those things that we celebrate, in addition to their creativity, hard work, courage and achievements.

So to all of you, thank you. Thank you for all that you do and most especially for having the audacity to pursue your dreams and to affirm the freedom to do so.

Businesses are Still Struggling through the COVID Crisis

20 October 2020
Evelyn Pyburn
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By Evelyn Pyburn

While most businesses have been able to reopen following their forced closure because of concerns about COVID-19, the struggle and uncertainty about their future fate isn’t over for many business owners. Economic commentators say it will probably take two years before the full impact on businesses will be known.

It’s true that many businesses dealing in products and services that have come into high demand are doing very well – but even they struggle with meeting those demands while still maintaining health and safety protocols. Not being able to fully reopen because of those protocols has kept some businesses teetering on the edge and for others new impacts of COVID are placing even more stress on their business.

The new worry is about an employee testing positive for COVID and having the health department put everyone under quarantine, effectively re -closing the business. Besides lost business, the employer is required to continue paying the employees even though there is no income. So while the employees are made whole, there exists the possibility that the economic damage done will leave them with no job if their employer goes out of business.

Some state and federal programs have helped in sustaining businesses and provide funds to help in paying employees, but the disruption still takes a toll and in some cases there is a stigma attached to the virus that dissuades the return of customers or clients. Because of that, many businesses are reluctant to even talk about their dilemma.

Everyone was well aware from the very beginning of the impact on restaurants and bars. A general count seems to indicate that about a dozen restaurants have closed in the Billings area. Others are hanging on but it is difficult for those with limited space. Being able to operate at 50 or 75 percent capacity, which is one of the restrictions under which they must operate, just isn’t enough to cover basic operating costs for some and so they remain closed.

While the cancellation of events like concerts, fairs, trade shows and arts/crafts shows may at first blush seem just a disappointment for spectators they also reflect lost business for many whose livelihoods are  event- oriented, which include not only the hospitality industry but also those who provide the infrastructure for such gatherings and those who sell their art and products through those venues.

At the same time, almost any kind of business that has anything to do with construction or selling equipment and materials for that industry, have exploded and can hardly keep up.

Each business has their own story to tell.

Q Art & Framing

By the time the Governor closed businesses in the state, it didn’t make much difference to John Armstrong.  “My business was slowing way down just because people were getting apprehensive,” he said. Armstrong owns Q’s Art and Framing at 1511 6th Avenue N. in Billings, a business that sells fine art and art supplies and does framing. It also features weekly art classes.

“Business was so dead I didn’t think it was worth it to stay open.” Besides closing the doors for a couple months, Armstrong cancelled all art classes.

“It was scary,” he said.

Armstrong owns the building in which his business is located and he has tenants with businesses. “We were all in the same boat,” he said. One of his tenants had to quit, leaving him with a vacancy. “So I kinda got hit with both barrels.”

He has reopened, but business is slow in re-building – the sale of art is “zero”, and “We just don’t have the foot traffic.” Armstrong says he is hopeful and, “I think we are going to make it through.” That wouldn’t be the case though if it were not for the state and federal funding programs … and a $250 credit from Northwestern Energy.

The framing part of business has been doing well, and art classes have resumed, but remain constrained because of spacing issues.

“I feel very blessed to be on as solid ground as I am,” said Armstrong, expressing gratitude. ”I feel that the community is supporting me. A lot of the business that came in August was people wanting to support me.”

Black Dagger Tattoo

Gyms, salons, barbers and tattoo parlors were especially hard hit.

Sean Sapone, a co-owner of Black Dagger Tattoo in downtown Billings, 2914 1st Avenue N., is still only partially open. He is accepting only one appointment a day, whereas a normal schedule would be two or three appointments a day, and walk-in traffic is curtailed completely. So business has dropped from 10 – 15 clients a week to only five, at the most.

Being self-employed, Sapone has relied on his savings to make it through a two –month business-closure. Sapone said that because of having a family member who is highly vulnerable, he imposed greater restraints on himself, and continues to do so. He noted that given how close people must be in his business, the safety and cleanliness protocols are of great importance and they have strictly adhered to them which makes their work difficult.

Black Dagger Tattoo was started in 2016, and was doing very well and growing, according to Sapone. So, the COVID crisis was a devastating blow to a new and vital small business. Functioning very much like hair salons do with subcontractors leasing space and cultivating their own clients, Sapone said that those individuals, being self-employed are having to fare on their own, perhaps getting some benefits from the government programs. They may be in an even more perilous position, he noted, since some were likely just building their clientele and were more dependent on the public exposure of an open shop.

About the future, Sapone said that he is “not necessarily optimistic.” “I am worried about it,” he said. He doesn’t see a lot of options, but “I think we will survive it.”

R &R Salon

It was the first time since she was 15 –years- old that Rachel Markowski had a whole month off. Markowski owns R & R Salon, a hair and beauty salon at 1001 S. 24th Street, which includes a small retail outlet for jewelry, some clothing and gift items. Having to close the business was an immediate end to her income, as well as for the beauticians who sub-contracted with the business.

Worry about what the future held was probably the worst of the situation for Markowski, who at least had the financial backup of her husband’s job, which was categorized as “essential.” They own a small acreage just outside of town and Markowski said, “I was glad to have the farm to tend to, to keep me busy and keep me from worrying.” Markowski said that she used the time to do things that she hadn’t been able to do when working full time and enjoyed being able to do things like gardening and food preservation.

She also used the time to develop a website for the retail sales part of her business.

The landlord of her business location reduced rent by half for the month of May, which was very helpful, said Markowski, who otherwise relied on savings she had for such emergencies. She did not apply for any of the government programs. “I just toughed it out,” she said.

While they cut back on spending, when the Markowskis did spend money – like so many others they tried as much as possible to support local small businesses.

Most of her clientele has come back in force. Their pent-up demand has kept Markowski and the others in her shop very busy, working overtime because of the need to space out appointments to keep the number of people in the shop at a minimum. “I’m just tired of having to wear a mask,” she lamented.

Lackman Cattle

Being able to get assistance from the first round of federal funding under the CARES Act was vital for sustaining his business of farming and feeding cattle west of Billings, Luke Lackman told members of the Chamber of Commerce’s Ag Tour on Friday.  Lackman’s family business was staggered by the unexpected cancellation of a contract for barley by a brewing company, just days after having invested the cost of planting it.

He wasn’t the only farmer in Montana who was broadsided by such contract withdrawals, which without the government rescue funding would probably have bankrupted many of them. Brewing companies were concerned that because of the COVID crisis beer consumption would be far less than projected – although one member of  the tour group told Lackman that he and his friends were trying to do as they could to support that aspect of the economy.

Western Romance

Without doubt the hardest hit industry sector was tourism, which included motels, restaurants and bars, but also included businesses like Western Romance Company in Huntley, which since 1999 has contracted with bus tour companies to provide an evening of entertainment, cowboy poetry, and singing and yodeling around the campfire, accompanied by an old-fashioned cookout.

Owners, Dennis (also known as Pappy) and Norma McNiven, were stunned this past summer to lose essentially all of this year’s business. Normally, they are booked from May through October with about 56 events with 30 to 54 people in each group. This year started out with 56 bookings scheduled, of which all but one cancelled. Not only did the McNivens lose a significant source of income so did two subcontractors and some eleven part-time employees, as did the local motels, and many other aspects of the hospitality business in Billings.

“First we were notified by Trafalgar Tours and Discovery Parks Tour in March that they were cancelling everything globally because of COVID until June 30, and then they notified us they were cancelling everything until September 2,” explained Norma. Then in the latter part of July they cancelled everything else through October 28. It totally wiped out the whole season,” she lamented.

Only one scaled-down booking in August moved forward, for which the McNivens hosted eleven guests rather than their minimum group size of 30. That event was able to be held because the booking company used their own buses; the other events were booked through companies that leased their buses from transportation companies that had to cease operations through the whole summer since they couldn’t meet the requirements for social distancing.

Whether Western Romance Company will continue business come next summer is uncertain. The McNivens are not particularly optimistic. “We just don’t know what will happen,” said Norma.

While they have applied for some assistance, what they have received has been minimal, and while they qualify for more, they have been told they are on a waiting list of some 7 million businesses and “we will contact you.”

Asked how they have survived, Norma said that they were prepared for adversity. “I never counted on Western Romance to do stuff. We have a commercial loan at the bank, which we renewed, and we hope we can make it through.”

Pursuing a Lose-Lose Strategy

23 September 2020
Evelyn Pyburn
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By Evelyn Pyburn

It’s a sad lesson of life, but there is always those among us who strive every day to acquire the unearned.

In my world, that is the real definition of greed – much more so than people working hard to make money.

The reach for the unearned is seen all around us, and while much of its cost often falls to taxpayers in general, a more favored target is “greedy” money makers, ie. businesspeople. The “reach” always involves laws that force the money-makers – business owners, employers, producers, job creators – to comply just in case they should have other ideas and resist the theft. The coercion comes in laws that set minimum wages, mandated family leave, restrict management decisions to favor employees, control prices, or mandate benefits, etc. – issues that could, and should, more legitimately  be negotiated voluntarily between concerned parties. The latest is the requirement that employers pay employees who are quarantined by government decree, due to Covid-19, above and beyond their sick pay benefits.

One trial lawyers association recently advised employees to make sure they know their rights, implying that employees have a right to be protected from contracting COVID. What rights? Rights aren’t guaranteed outcomes or gift cards, rights are a freedom to act. The employee is always free to leave a job and find another if they don’t like the conditions of the job, whether it has to do with health measures, the work asked of them, or compensation. To be able to legally impose obligations on an employer or anyone else, is to have the power to enslave one person for the benefit of another. That is NOT a RIGHT!

The requirement is destroying just as many businesses now as were destroyed with the closure mandates. Small businesses lose all their employees for weeks on end, which means usually they cannot operate – they cannot “make money.” Some employees think it is a lucky break, getting to stay home while still getting paid, and they milk it for as much as they can. In the meantime, the costs mount for the business owner who has no income.

Of course, if the consequences of the COVID edicts were allowed  to fall directly upon the workers they might not be so tolerant of the situation. They might interpret the validity of the mandate differently and weigh the consequences more incisively. So, since employee numbers are greater than those of employers, their political clout is greater, and it becomes politically necessary to shield them from reality, and force the impacts upon the employers.

The situation does not have to last long before it destroys many businesses, but that consequence is never understood to the now- unemployed, who believe, along with the politicians and bureaucrats, that it is possible for an economic system to thrive treating businesses as though they are philanthropic organizations – as though they have the same bottomless pockets that government thinks it has.

The grab for the unearned is ratcheting up, as the almost-immoral philosophical perspective is extended to the idea that employers should be held liable if their employees contract the disease. It doesn’t take much imagination to see how broadly and unjustly lawyers and the legal system will seize the opportunity this affords them to enrich themselves, in their perpetual quest for the unearned.

Consequences far less evident will be the changes business owners will make in how they operate to reduce their exposure to liability – some of those changes will not be foreseeable as creativity is brought to bear – but be assured the adjustments will not result in improved products, services, convenience or value – or jobs. Be assured that to hold businesses liable for employees or customers contracting COVID or any other disease (as it will surely be expanded to include), will be to the detriment of all of our society in many ways.

It has been through a system of voluntary exchange of value for value – without coercion and with incentives aligned with achievement – that we have come to enjoy a standard of living beyond any ever before known in the world, with the expectation that it will grow ever greater. But if this process of granting the unearned on the backs of the productive continues, it means, not only will many businesses fail, but our standard of living will decline – the wellbeing of the general population will diminish.

It is a lose-lose strategy for all.

Pharm406 Promises “to do things better”

23 September 2020
Evelyn Pyburn
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by Evelyn Pyburn

“Because Montanans deserve better.”

That’s the reason that Kyle Austin has started a new business called Pharm406.

As a pharmacist who has served in a number of capacities in hospitals, ambulatory services, and retail settings, Austin saw there is a lot of room for improvement in how pharmacy and other health care services are provided. “We strive to do things better than everybody else,” is the motto of his business which provides a number of services at competitive prices while going the extra distance of providing delivery services and other conveniences that make it easier for their customers.

‘At first I decided to do mobile immunizations and then discovered the former Rocky Mountain Bank location—  1410 38th Street West — and decided there was more I could do.” Although some aspects of the business are already open, a Grand Opening is planned for September 24.

Besides a pharmacy, Pharm406 provides a cryo chamber – -an alternative to pain management, and the services of a chiropractor and of a massage therapist.  They can also do rapid COVID testing with results in 13 minutes, and in November they will be able to provide testing for COVID antibodies.

Pharm406 will also include a walk-in clinic as soon as Austin engages a physician’s assistant or nurse practitioner. Other services include out-patient hydration therapy, Ketamine Infusions, and potentially other treatments.

And just to inject some fun into the whole process of health care, Austin delivers what may be the ultimate in convenience and enjoyment into the annual tedium of the annual flu immunization with “Get a brew and not the flu.”

At designated times and places customers may get their flu shot and a free beer – and not just in Billings! He’s already held a mobile flue immunization clinic in Red Lodge at the “Bull and Bear Saloon.” And, in Billings it’s been held at the Den with others scheduled throughout the city and still others in such places as Great Falls, Glasgow, Wolf Point, Bozeman, etc. “We bring our immunization equipment and we will bill insurance or collect cash payment and the patient gets a free beer,” explained Austin, “It helps the people who have establishments that have gone through the COVID closures.”

Located in a former bank building with three drive up windows, Pharm406 is probably the only pharmacy in the country with three drive-thru windows, said Austin. No more waiting in a long auto-line to pick up or drop off your prescriptions.

But even picking up prescriptions may be unnecessary, because Pharm406 is providing free delivery service, and not just for Billings, but for the Heights, Lockwood and Laurel. They will deliver free on specific delivery days and if it works out maybe at other times as well. And, they will deliver over- the –counter items, too.

Pharm406 will also “bubble pack” prescriptions, so they come in a packet that contains all the medications that the customer needs to take at one time. Like delivery, that service is also free of charge. Austin said that in the beginning to introduce customers to his business the services will be free and he hopes to be able to continue to provide the services free of charge, but it may become necessary to eventually charge for them, but it remains their goal to still be competitive. “We will match anyone’s prices,” he said.

No Account of Human Nature

21 September 2020
Evelyn Pyburn
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By Evelyn Pyburn

The official status of COVID in Montana, as of last weekend was 7,063 confirmed cases and deaths hit 100 with 242,875 people having been tested. That means that of those people who have tested positive with the disease 98.6 percent have survived, but what is the survival rate of all the people who have actually contracted the disease?

The number of cases is, without doubt, much higher – maybe very much higher – even though not much is being said about it anywhere.

Given the pressures that are being brought to bear on citizens, assessments of their likely reactions should probably consider the nature of those citizens – ie. the nature of human beings. One must realize that just as much as human beings would want to avoid the negative impacts of getting the virus, so they would want to avoid the adverse impacts of “the long arm of the law.”

And, as much as the media and political blitz has served to obscure the fact that most people survive the illness, most people see beyond the programming and know that the disease is not a death sentence for most – so to become ill, if they are not in a high risk group, does not send them into a panic. And, because they do not want to deal with the county health department or be the cause of hardships for their fellow workers, friends and family, they do not get tested.

As one said, “Who wants to be responsible for putting their employer out of business? Who wants to lose their job or be responsible for putting their friends out of work?”

People with greater income security or who are unware that actions have consequences, will probably react differently, but necessity will force a more pragmatic reaction from the other half of the world, so common sense says there are more people than those being counted who have had the virus. At least one case for each official case, and the ratio is undoubtedly greater than that.

One must believe that “officialdom” knows that this is going on but say nothing about it, although County Health Officer John Felton, at one press conference, hinted that the process of contact tracing is made difficult because people do not answer the phone when they see that it is the County Health Department calling.

This too is an example of typical and natural human behavior, especially for human beings who are used to the idea that they have the right to live life on their own terms.

But that can be changed, the bureaucrats, health experts and officialdom have been heard to strategize. It’s just a matter of getting people used to it and they will eventually acquiesce, especially the young ones.

That there is resistance to the Governor’s edicts shouldn’t be surprising, but apparently the Governor himself is surprised. Whether true or not I am unsure, but I was told by one individual who was in a meeting with the Governor, that the Governor expressed surprise, saying, “It seems like there are people who are refusing to wear masks simply because I told them to.”

If he is truly surprised, then one has to conclude that his bubble has left his arrogance intact and his understanding of “commoners” exists not at all.

Whether it’s avoiding contracting a disease or having to deal with government bureaucrats, most people do what is in their best interests to do, that is why coercion was never necessary and persuasion would have worked better – but persuasion requires respecting “commoners.” That our leaders had no interest in that approach says all that needs to be said.

Good News Could be Coming to Montana’s Beef Industry

21 September 2020
Evelyn Pyburn
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By Evelyn Pyburn

Things are changing because of the COVID crisis, and one of those changes — which could be good news for Montana— is the strengthening of small producers in the meat processing industry.

The unveiling of problems in the nation’s staid meat packing business, has given rise to questions and challenges regarding entrenched processes, regulations and norms. Dramatic swings in how consumers are buying meat are forcing changes which are creating pressure on politicians to adapt policies and regulations, and some of those anticipated changes will pose opportunities for the industry in Montana.

“I think we are going to have more packing plants in Montana,” says Dr. Marty Connell, who has been a participant of the industry all his life and has watched its changes over the past 55 years. Dr. Connell is a Veterinarian, an Agriculture and Financial Consultant and President of Kairos Properties LLC in Billings.

In a recent interview, Dr. Connell said that there will be changes to the industry and they will benefit Montana producers and consumers.

It’s not that pressures on the meat industry were not already building and that some changes were not already happening, but the disruption of the supply chain because of the closure of a few plants due to COVID-19 infections, revealed exactly how vulnerable the industry is and that has prompted motivation to remove bottlenecks and open avenues to allow flexibility.

Generating some excitement is a bill in Congress that will open doors to allow local state-inspected packing plants to sell products across state lines – something currently prohibited by regulations.

Another development is the establishment of a new program at Miles Community College in Miles City to train students how to cut meat— and perhaps, eventually, another aspect of the program will teach how to manage a meat packing business. The program addresses a pent-up demand in the state for meat processing that was encumbered due to a lack of skilled meat cutters.

Consumer pressure for local products and “grown organic” has created new markets and opportunities for local processors.

The mandated closure of restaurants because of COVID has generated a new interest in cooking at home, pointed out Dr. Connell. So, grocery stores experienced increased demand for meat, while restaurant meat purchases dropped dramatically, and a situation emerged in which there were shortages in one supply line and surpluses in another. A rapid transition was slowed because of regulations.

Dr. Connell said that while home cooking may retain some of its new-found interest, he believes that as soon as they can, people will return to eating-out at restaurants because of its convenience. There will be other aspects of life that will also return to ways of the past as soon as people can do so, believes Dr. Connell, but some things will change because of the COVID crisis, and one of the biggest will be a decline in confidence in bureaucrats whose recent deeds have created a “lack of credibility” among on-lookers.

Dr. Connell graduated from Kansas State University with a degree in Veterinary Medicine in 1965 and became one of 102 veterinarians in Montana who also served as Deputy State Veterinarians who were qualified to conduct inspections of meat processing facilities in the state. Dr. Connell was practicing at Glasgow. At the time there were packing plants all over the state – -almost every town had one.

The Department of Livestock was the Livestock Sanitary Board.

Montana, as did many states, had its own state inspector and process for monitoring inspecting and regulating the meat packing businesses. And then, as now, processors were not allowed to sell meat across state lines.

In the late 1960s, the State Veterinarian and Livestock Sanitary Board decided that it would be better for local processors to meet federal standards so they could sell their products across state lines and expand their small market. “That was a false assumption lobbied by employees of the large meat packers.” 

The status of Montana’s industry at the time was that livestock growers didn’t supply enough inventory and Montana’s population wasn’t great enough to consume all that was processed – a status that hasn’t changed all that much.

The State Veterinarian’s desire for Federal Inspection finally won the day but as the federal regulations were imposed, one by one, the small packing plants blinked out of existence because they could not afford to meet the federal standards. Federal standards are only affordable if the facility is processing a large volume of animals.

So rather than expanding Montana’s beef industry, they destroyed it, as was the case across the country, and the number of packing plants dwindled to just one or two megalithic facilities.

Was there influence and manipulation of the politicians and federal regulations by the “big boys” to protect themselves and eliminate widespread competition?

 Dr. Connell said that he was sure there was some of that, but the driving factor in the market, then as now, is the consumer seeking the lowest price product. The reality is a one penny price difference makes a difference in what happens in the market. Small processors do not have a large enough market to spread out their costs per unit to a degree that they can compete with larger processors or imports from Australia.

Price will continue to be the major factor in markets, believes Dr. Connell, which is why he doesn’t see internet sales being particularly successful. The price on website vendors is often four times more than a butcher and the quality is not necessarily better. The competition of the future is a business like Costco, said Dr. Connell, where they keep their prices down but maintain a good product. Ranch House Meats is another operation that has impressed Dr. Connell in how they are competing.

Whatever changes come they will be addressing the industry as a whole, because noted Dr. Connell, Montana, with a population of less than a million, has miniscule influence in Washington DC. That is one reason why the effort to require labeling of meat products as to their origin has never gained much traction in Congress.

Another factor in the regulatory squeeze, explained Dr. Connell, is that it is the nature of bureaucracy to gradually ratchet up the standards, imposing additional costs on plants. That was a problem for Montana in the recent past as small plant operators were being required to comply with demands of federal regulators that were not regulations.

But, Dr. Connell stated that over time the regulation situation on Montana packing plants has eased.

Part of the reason is that compliance has become easier due to better technology. Technology always plays a role in market changes. In the late 1800s and early 1900s, technology was a factor in how beef got to market. The emergence of refrigerated box cars allowed for the shipment of beef carcasses which was less expensive than shipping live cattle to eastern markets.

In order to overcome regulatory costs and increase the economies of scale that was beyond the small processors, Pierce Packing was built in Billings in 1906. At the time it was the largest packing plant in the country. Midland Packing was also established in Billings. Interestingly, too, is that at that time production of swine was greater in Montana than beef production, and eventually Pierce processed only pork.

Today with over 2.6 million head of cattle, the beef industry in Montana far exceeds that of hogs, of which there are only about 210,000 head.

Montana has about 20 Federally inspected meat processing plants and 39 State-inspected meat processing plants.

Pierce Packing, located on the block of 15th Street and 1st Avenue North, closed in 1984 after struggling with market ups and downs, with the final blow coming because of a PCB transformer leak into their tankage product.

Dr. Connell’s company, Kairos Properties LLC has redeveloped the plant structure into a facility that today is home to manufacturing operations, warehouses , offices and thirteen high end residential condos.

What’s Next for Montana?

31 August 2020
Evelyn Pyburn
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By Evelyn Pyburn

The state’s economy is in a state of “extreme fluidity”

The declaration was in response to the question, “Where are we Now and What’s Next?”

It was the theme question posed by economist Pat Barkey, Director of the Bureau of Business and Economic Research at the University of Montana, in a virtual version of the annual program “Montana’s Economy at Mid-Year,” last week.

“We are starting to get used to where we are but where are we exactly?” posed Barkey, adding that because of the uncertainty, “We have shortened our horizons and are more concerned about next week and next month.”

“This is a situation of active management for a considerable period of time.” But, “Montanans are capable of adapting.”

Not all of the news is bad, said Barkey, explaining that much of the data they need to understand what is going on is slow in coming. “We are certainly in a second phase, he said, “In terms of economy we are grappling with the challenge. ..it is a fluid situation but we are getting more clarity.  We are looking at steep declines, strong bounce backs and persistence in going forward.”

The US Economy has “turned in one of the worst performances ever recorded.” GDP (Gross Domestic Product) dropped by 33 percent (as an annual rate).

 “You have to go all the way back to the 40s to have this kind of hit to the economy …it is of a different order of magnitude than any other decline in history.”

Despite the decline, the “bounce back in jobs and consumer spending since then has also been impressive,” said Barkey.

The current forecasts call for a 17 percent growth in GDP in the third quarter.

There is going to be some permanent changes as a result of COVID impacts.

Why did it happen? “Because consumer spending was in free fall.” Consumer spending saw a 25 percent decline in the second quarter – another fact that is without precedent, a description that Barkey conceded everyone is probably “sick of hearing.”

While data is slow in coming for updates as to the state of Montana’s economy, much about Montana’s economy is similar to other areas of the country where there is more data, which allows researchers to draw some parallels.

Data from credit card transactions in Montana, shows there was a “huge hole in spending in late March and early April – a 8 percent spending decline.

Consumer spending seems to have cratered mostly in accommodation services and health care.

At the same time, “consumer income rose and it rose strongly… primarily because of transfers from federal government.” Also, more people are saving more… the aggregate spiked from single digit to 25 percent.” Barkey further noted that “it is not just that consumers are reticent about spending, they couldn’t” – they were on lockdown and many stores were closed.

“The US forecast is very much a moving target.”  While it was a strong bounce back, it is not going to take us back to the economy of before – nor will it in Montana.

 “There is more optimism about 2020 than there was several months ago, but trends in infections is lowering expectations for 2021 and 2022.” A July revision puts more pessimism into the speed of a come back. It will take months if not years to recover.

“We are going to see very, very low interest rates for the next couple of years.”

“We are going to have negligible inflation and a weaker dollar.”

One impact of the virus that is not being talked about much is the collapse of international trade, said Barkey, which dropped by 50 percent and is one reason why some products – such as bicycle or pharmaceuticals “aren’t on the shelves.” 

There has been a huge influence by Congress and the Federal Reserve, said Barkey, going on to say that one of the best things to have happened was the rapid response in getting money dispersed to the American people and businesses. 

“The one mistake they didn’t make was to dawdle about it.”

 “I think the actions of Congress have been quite helpful, but let’s not have false hope that we can spend our way out of here.”

The extraordinary actions taken by Federal Reserve have quietly revolutionized what management of the economy means,” said Barkey, while the US is $2 trillion more dollars in debt, distribution of money to businesses and citizens “has stabilized and normalized markets.”

“It sent an extreme message that we are going to have an ordinary economy… and the panic and fear is gone in the financial markets.”

“The first quarter for Montana was pretty good, according to Barkey. Initially, “We thought we were in a recession that would be twice as large as the Great Recession.”

“Unemployment data says it is a very seismic event, but state tax collections don’t agree,” he said. The state General Fund suffered a mild revenue decline of 1.6 percent. In fact, individual income taxes had a slight increase, but other categories declined, not least of which was oil and natural gas production which declined 29.2 percent.

Some studies indicate that the economic activity across the state stabilized through June.

Business openings which fell 40 percent because of forced closures, “are returning to early March levels… we are coming close to having all businesses open.”

There’s a lot to be worried about in energy markets, said Barkey. Bakken oil production has seen a record fall. The spot price of crude oil went negative for one hour one day. All of which is important for Billings and points east.”

“Grocery store spending is amazing.” There has been a huge shift in consumer spending away from restaurants to grocery stores.

The hospitality industry, restaurants and hotels, have taken “a major hit” with spending down by 45 percent.

Housing prices haven’t changed much – “they are going up just like before the down turn.” There’s definitely “a lot of heat in the housing market.”

About people moving in great numbers to Montana, Barkey was dubious. “You have to convince me that someone who has lived in New York all their lives is going to move to Montana and be happy, in enough numbers to be significant.”

While there is much anecdotal information about the number of out-of-state vehicles seen traveling through the state, Barkey said the credit card data says they aren’t spending as much. And, he further noted that businesses that cater to tourism are not reporting booming business and many have not bothered to open for the tourist season at all.

Time to Pay Up

31 August 2020
Evelyn Pyburn
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By Evelyn Pyburn

Over the years as a reporter and learning about economics, early on I became alarmed at the rate and intrusiveness of regulations. As I came to understand the depth and breadth of regulations on business, I failed to understand, not only the acceptance of them but the often enthusiastic embracing of them, by business people, and especially by most of the organizations that represent businesses.

When asked about their biggest concerns, business people would most often, and still do, lament the impact of taxes. While understanding the obvious negativity of taxes draining away investment resources for businesses, in talking to some of the business people, I would argue that the greater threat for business in the US was the escalation of regulations, and not because of their cost — which is no small matter— but because I could so clearly see the end game of the amassing of such power. The cost of compliance in terms of dollars and cents is nothing compared to the irreplaceable value of our freedom.

I am sure that others could see it too, but so for granted did they take their freedom that they found such a day as this, incomprehensible.

Now with the emergence of a persuasive pretext in the form of COVID-19, business people are discovering the degree to which they have relinquished power to the government over their freedom to do business. So, with the ramifications becoming so obvious, while it has taken some 50 years, I can say, “I told you so.” It gives no satisfaction being able to do so.

I came to understand that most of the enthusiasm businesses often had for regulations was what they saw as a convenient means to use the power of government to inhibit potential competition. Many businesses and industries actively undermined the free market, and were often the instigators of new regulations aimed at crippling upstart newcomers, who threatened to challenge them.

As obvious as are the regulatory powers that government is now using to control and throttle business activity, I was still somewhat surprised to hear that one businessman, facing the first round of shutdowns imposed by government, and being told the government would take away the license he needed to do business if he did not comply — he actually said, “So this is how we pay for the protection against competition that we have enjoyed.”

He is surely among a very few honest enough to admit so much, because always before their justification was that regulations were for the sole purpose of “public health and safety.” Their real strategy was never discussed publically and undoubtedly many didn’t even admit it to themselves. And, needless to say, government was always an eager and enthusiastic participant in making the unholy covenants.

The current reality of our economic situation is that government has great ability to control what business people can do, primarily because of a wealth of regulatory powers, any and all of which can be whipped out at any moment, to coerce compliance from innocent citizens and an ostensibly free people, whose only crime is trying to earn a living and manage a privately held enterprise. After all, the essence of a free market is the voluntary exchange of value for value among citizens. To prohibit that is to violate the individual freedom upon which this country is based.

In selling licenses and permits and having to gain permissions from boards and agencies – even a municipal business license — such a simple voluntary exchange has been inhibited, and so arbitrarily burdened, that any idea of being in a state of freedom is an illusion which COVID has suddenly unveiled for the police state that it has become. The regulatory bureaucracy that now prevails in our country effectively controls the daily life activities of both purveyors and consumers.

And, just as that one unique observant businessman so aptly stated, this is indeed the other side of the bargain for which they sold their free souls.

Rescue Mission Lays Out Plan: Central Services for Homeless

31 August 2020
Evelyn Pyburn
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By Evelyn Pyburn

The Montana Rescue Mission is proposing to build and revitalize almost a whole block of Billings on the 2800 block of Minnesota Avenue to develop a centralized “Unified Campus” to provide services to the homeless and low income.

Since part of their plans include a building in which a whole floor will be dedicated to low-income apartments, MRM in conjunction with Mountain Plains Equity Group, Inc. is applying for Low-income Tax Credits from the Montana Board of Housing.

At MRM’s request, Yellowstone County Commissioners issued a letter of support, on Tuesday. “This thoughtful approach and reaction to a ‘full service’ campus will be instrumental in breaking the cycle of homelessness in our community,” states their letter. The commissioners further commented that this is the approach to the issue of homelessness and mental health care for the most needy, for which they have been advocating.

MRM is seeking $6,477,000 which will cover about half the anticipated $12.6 million cost of developing the proposed campus. If they are successful in obtaining the funds, said Matt Lundgren, MRM Executive Director, then they will launch  a community campaign for additional support.

Lundgren said they will be counting on private donations and conventional long-term financing to complete the project which includes a 166 –bed homeless shelter, 29 affordable apartment units, and supportive services and amenities.

The plan for centralizing the services available for the needy, mentally ill, and homelesss has been in the works for two years. It’s entailed consultations with other communities who have solved similar problems with such a facility.

Referring to MRM’s past experiences, Lundgren said “We have found such a success in our programs … We know, we need to do more low income apartments.” Heavily subsidized apartments which are affordable to people working at entry level jobs, give them an opportunity to get back on their feet, he explained.

“We have a holistic approach,” explained Lundgren, “Our goal is to keep people close to the services they need. We can invite other organization and agencies to come in and provide services and  medical care.”

“Putting all things into one campus will keep our people contained.” It would include an outside space, secure and sheltered which would provide “a place for people to congregate and socialize” rather than having to wander the streets.

A child care center would also be part of the facility which would further enable parents to hold jobs. Other “wrap-around services” would include a chapel, auditorium, class rooms and a workout room.

“It would be a learning campus,” said Lundgren.

The first floor would be the location of services.

Lundgren pointed out that the building in which MRM is currently located is a hundred years old and as such has many on- going maintenance issues and remodeling needs.

Indicative of the inadequacy of the space they have, is that the current men’s shelter is “a bunch of bunks” all in one room. “There is little opportunity for social distancing – of keeping people six feet apart,” said Lundgren, emphasizing that they expect social distancing to be an on-going concern. “We don’t see an end date to this virus,” he said.

An important part of the design is to make the whole facility ADA compliant, which will enable MRM to better serve people with disabilities and unique populations.

Judge Refuses to Halt Grandstands Demolition

31 August 2020
Evelyn Pyburn
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District Court Judge Rod Souza rejected a request by the Montana Race Horse Owners and Breeders Coalition, (MRHOBC), to place an injunction against Yellowstone County to halt the demolition of the Grandstands at Metra Park.

The MRHOBC claimed that the County Commissioners did not attempt to explore the potential of placing the Grandstands on the National Register of Historic Places and that the demolition would irreparably harm horse racers and breeders.

The county rebutted that commissioners followed proper legal procedures over many months, in deciding to demolish the Grandstands. They also pointed out that the decision to demolish them was made over four months ago, during which time there was no response by MRHOBC. And, also that the county commissioners were not obligated to pursue the historical status.

Jeana Lervick, Chief In-House Counsel for the County Attorney’s office, said in the county’s rebuttal, “Plaintiff is not irreparably harmed and there is no emergency warranting the Court’s intervention.” She pointed out that Dan Fuchs, President of MRHOBC, had several times spoken to commissioners and others at public meetings about his organization’s interests and concerns. The county encouraged them to participate in an on-going planning process for the future.

On behalf of the county, Lervick asked that the court make a decision without holding a hearing.

After explaining that the court is not allowed to skip a hearing process, Judge Souza held a hearing on Friday after which he concluded that the county was acting within its authority to demolish the grandstands. He said, “…the Coalition’s interests may be met by participating in the public planning process.” Also, he stated, “As the County argued at hearing, disagreement with the Commissioners’ decision does not create a legal basis for the extraordinary remedy of injunction.”

Souza also pointed out that the Coalition was making arguments “that are not appropriate for the judiciary. . . judiciary action cannot be based on disagreement with policy decisions…Commissioners’ decision to demolish the Grandstands is a political question.”

MRHOBC is anticipating being able to finance horseracing in the future through Historical Horseracing gambling proceeds and the group hopes to resume horseracing at the Grandstands next year. It’s been nine years since there has been horseracing in Yellowstone County.

Fuchs said, after hearing the court’s decision, that the commissioners have yet to justify to taxpayers about a failure to take advantage of potential grants that are available through the historical registration process that could help refurbish the grandstands.

Lervick commented about the decision, “The Commissioners are glad to proceed with their plans and are hopeful that the Association and community will voice their hopes for what the future of MetraPark will hold.”