Why Some Western Towns Live Or Die

Ray Rasker is keenly aware of the negative aphorism, the one often associated with members of his profession who are assailed for only "knowing the price of everything, but the value of nothing."

Constantly, he is bombarded with questions people have whenever fellow economists claim that solutions to all of the world’s major problems could be neatly resolved if only they were addressed through the lens of monetary transactions.

As in: if citizens want wildlife, clean air, clean water, national parks, national forests, national monuments, public beaches, pretty scenery, safe food, contamination-free neighborhoods and, of late, protection from the deepening effects of climate change, how much are they willing to pay for having them?

Often, Rasker hears fellow economists claim that the market—that thing called the invisible hand by Adam Smith— is a better driver of human behavior than government.

Rasker, however, says there are lots of things money can’t buy and the market can't easily account for, and experiences that cannot be quantified in balance sheets, yet they matter every day. Such are many of the values associated with public lands in the Greater Yellowstone Ecosystem and larger West.

Some economists have claimed that Yellowstone and Grand Teton national parks, for instance, could fix their crumbling infrastructure problems if only the federal government were willing to privatize the shorelines of Yellowstone and Jackson lakes, raising funds by selling off lots to the highest bidders. 

Rasker has watched both economists and politicians glibly suggest that the answer to solving America’s national debt is selling off federal public lands or handing them over to the states which could then develop those lands at their discretion.

He has heard plenty of what he calls “cockamamie” schemes that have been posited over the years as the West continues to shift from being a region defined by natural resource extraction to one in which different kinds of amenities register more.

These tangible and intangible assets, in fact, are fueling modern economies in ways previous generations could never have imagined. Rasker and colleagues have taken a hard look at trend lines. They are most interested in what positions some communities to thrive or fates others (such as natural resource economies based largely on extracting a single resource such as trees, minerals or fossil fuels) to turn into modern ghost towns.

As co-founder of the Bozeman, Montana-based thinktank, Headwaters Economics, Rasker is a pioneer in not only thinking about the worth of intangible things in the environment, which often do not show up in financial ledger sheets assembled by chambers of commerces, but more importantly understanding how the natural world factors into the well-being of local economies — and vice versa.

I first met Rasker nearly 30 years ago. He was fresh from earning a Ph.D. in natural resource economics from Oregon State University’s College of Forestry. He had just started as the first staff economist for The Wilderness Society in Bozeman, and he had begun divining insights that made him an enigma and an outlier. He remembers the polemical, intractable wars of rhetoric being waged at the time between environmentalists and bean counters beholden to traditional natural resource extraction industries.

Journalists then wrote stories that played like skipped records in newspapers. There was little real discernment from reporters about what we were being told because there wasn’t a lot of great data. While for the sake of “objectivity,” “fairness,” and “balance,” journalists dutifully quoted voices on “both sides” of the issue, it didn’t bring communities any closer to understanding the tectonic shifts that were already under way. 

Unfortunately, perceptions created mythologies and those mythologies shaped mindsets that were driving public policy discussions both on Capitol Hill and in state legislatures. It's fine to have a firm, passionately-held conviction believing something is true, but what if it isn't?

"Here in Greater Yellowstone, voices in the conservation community would say that the region’s economy was powered by tourism," Rasker explains. "Meanwhile, those who gauged wealth only on volume of resources being pulled from the ground and consumed said, ‘Oh, no, prosperity is created through ranching, mining and logging.’ I said, ‘You’re both missing the point. There’s something else going on.’"

More than a generation ago, people on both sides thought Rasker was speaking heresy. Time has both corroborated his hunches and placed him in a new vanguard.

As the Trump Administration and Interior Secretary Ryan Zinke have moved to radically reduce the size of national monuments in Utah, weaken environmental laws, turn America into a new Saudi Arabia for energy development and export, and try to jumpstart resource extraction, Rasker and others say it’s vitally important that action is propelled by facts, not a 19^th century view of the world.

Rasker and I have had an ongoing discussion. When he and I spoke at the end of the Obama Administration, he had just returned to his office after being in Washington, D.C. There, he delivered a keynote address before high-level natural resource policy experts at the White House. He had an audience with then Interior Secretary Sally Jewell, Agriculture Secretary Tom Vilsack and their top lieutenants.

The focus of Rasker’s words: wildfire. What does thinking about choking woodsmoke have to do with the economies of the West? It is symbolic of many forces converging on the landscape and yet obscured by the burning we feel in our eyes.

The way we think about wildfire, Rasker says, is a metaphor. America needs to be smarter about how it manages the wildland-urban interface in the West, the zone where public and private lands converge, because the escalating costs of battling fires is devastating the budgets of land management agencies and racking up huge costs to communities. Tax dollars are being burned up, human lives lost, and the pyre is growing in magnitude every year.  

It’s also part of a conundrum. As in Greater Yellowstone, and in many corners of the Rockies and other western mountains, an unprecedented wave of humans is now inundating forested terrain by those searching for the good life. Climate change is leaving those zones more prone to going up in flames.

But before wading into the mire of America’s growing crisis for dealing with wildfire, it’s important to understand how and why Rasker became an unlikely figure in thinking about the New West—as it is perceived to be versus what is really going on.

Rasker's perspective—backed by data—is based on the realization that the health of natural landscapes and sustainable economies functions like yin and yang. It’s a relationship made manifest in Greater Yellowstone, and it’s especially poignant as the most influential gene ration in U.S. history — the baby boomers — flexes its power now in retirement, he says.

That’s right, boomers continue to wield transformative power because they are living longer and carrying more financial resources and mobility into their sunset years than any generation before. They are largely rejecting the “retirement community” patterns that are synonymous with their predecessors. Many want to flee cities and the suburbs. They want to be close to nature.

Where they relocate and how they live stands to leave behind impacts far more permanent than any clearcut or mine on public land. The private land they consume through lifestyle decisions has huge implications for the very public lands that are drawing them to the region.

In the early 1990s, as the front wave of boomers (those born between World War II and roughly 1964) began to assert themselves as footloose midlife entrepreneurs and lifestyle pilgrims, their presence in Greater Yellowstone registered as a rumble. Today it is seismic.

Rasker relates a figure that some elected officials view with incredulity because it cuts against a cultural narrative dating to the frontier that claims natural resource extraction is what drives prosperity. Rasker says that in the 21^st century it is a myth and hard economic data provided by the U.S. Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis, state agencies and citizens themselves, bear him out.

Now across the West, roughly three percent of the workforce is employed by  natural resource industries (and only 5 percent in rural western counties).  Think about that: for every 1000 jobs, just 30 reside in traditional resource extraction. In the rural countryside, just 50 do.

But it’s more than that. Emerging data also debunks claims that traditional tourist towns (as they’ve been defined until recently) are places where the prevailing kinds of jobs are hamburger flippers, waiters, bartenders, people who clean rooms at motels or sell trinkets. That's a rear-view perspective, Rasker notes. 

Another misperception is that the vast Western interior is populated mostly by country people. Not true yet the Montana legislature still thinks and votes as if it is a rural state. "Montana is an urban state, a state of small cities. It’s not as 'rural' as one might think," noted David Parker, a political science professor at Montana State University in a recent Mountain Journal story. "Do rural counties have disproportionate influence? I’d say that rural counties in Montana receive far more federal and state assistance than they might like to believe. Is that influence? Perhaps."

Some 60 percent of new net income pouring into the mountainous West with a rising baby boomer presence is derived not from retail, manufacturing or high-tech, but from retirement savings and investment income. 

Boomers are moving to places like Greater Yellowstone in droves. From an environmental perspective, Rasker says the upside is that injection of money cycling through communities—and fueling even more development through speculative real estate— isn’t coming directly from wealth created by polluting smokestacks or open pit mines.

The downside is that the retirees and people who make money on financial investments are buying land and exacting growing footprints on the natural world by how they live, reinvest and recreate.

Wealth created through cutting trees, digging for gold and running cattle on public land has been supplanted by another industry—private land real estate—that is leaving behind, in some ways, huge ecological impacts where wildlife are concerned and negatively impacting public land next to expanding development. Socio-economically, it is widening a chasm between rich and poor.  Is this New West superior to the one that preceded it?

Jackson Hole is an extreme example of disparity between the upper one percent and the rest. Many refer to it as the Aspen of Greater Yellowstone and it is not bestowed as a compliment.

"It’s a tsunami, and the biggest part of the wave is yet to come," Rasker, a baby boomer himself, says, noting that development of land is its own form of resource extraction with permanent consequences. He and his wife know the dilemma because it affects options for their now grown daughters.  Many young people who have aspirations of living in the towns they knew as children find it difficult to own a home.  Some resent the newcomers. Some have considered pulling up stakes and moving to Dillon or Lewistown which resemble Bozeman 40 years ago.

Over the last several years, Rasker and his team at Headwaters Economics found that crunching statistics led them down several different rabbit holes, all of which have yielded a connect-the-dots bigger picture. Their main clients: government agencies at the federal, state, county and municipal levels. Why are they interested? Because they must be attentive, as civil servants, to fiduciary duty and paying attention to the bottom line.

The data being generated by Headwaters has been cited regularly in the battle royale that has erupted over executive action taken by President Trump and Zinke with monuments in Utah. Utah politicians continue to insist that the bedrock of durable, sustainable economies is extraction as it was known by their parents’ and grandparents’ generations. They point to ranching, oil and gas, and potential uranium mining. Underlying their convictions is fear of change. What cannot be overestimated, as I've learned in discussions with some folk, is the heartache they feel when seeing their young people going off to college and not coming home because there's no opportunity for gainful employment.

They want to blame someone. In reality, they want someone to empathize with their pain. What they are unwilling to admit is that resistance to change will not reverse the decline. Some towns, moribund, steadfastly cling to the way things used to be, which ironically is only accelerating their arrival at terminal velocity.

Such mournful hardship is a ubiquitous phenomenon being repeated across America, from coal towns in Appalachia to old timber towns in the Pacific Northwest, from ranching/farming towns on the high plains to former hubs for steel and textiles in the East. Desperation, despair, hopelessness, as numerous studies and media reports have documented, have brought a corresponding array of social problems ranging from drug and alcohol abuse to higher rates of suicide, violence, poverty and illness.

Not long ago, I spoke with a prominent politician who said, "some towns are gonna die and there's nothing they can do about it; they just haven't realized it yet."

Rural counties everywhere are struggling to hang on to their cultures, traditions, identity and people. It's easier to deny the truth than accept it, let alone charting a different course. Often the first response people have toward Rasker is rejecting what he says. However, many of the hundreds of counties in the West are familiar with the research of Headwaters Economics and commissioners are using it as reference points, sometimes grudgingly.

One innovation Headwaters offers free of charge is a calculator that enables counties across the West to compile customized socio-economic profiles for their own communities, which includes a look into the value of public lands as job creators.

In addition, Rasker and colleagues have uncovered these insights:

Healthy landscapes in the 21st century, like those in Greater Yellowstone, foster economic prosperity because they attract creative people who want to live in or near them. Conservation, despite what old-guard economists say, is not an economic liability, but can be a tool for driving prosperity and getting out of the ruts of boom and bust cycles.

The public-land-rich West has not been hobbled by federal ownership. During the last four decades, the West created jobs twice as fast as the rest of the nation, and western non-metro counties with significant protected federal land added jobs more than four times faster than peers without protected federal land. 

From 1970 to 2010, western non-metro counties with more than 30 percent of the county’s land base in protected federal status on average increased jobs by 345 percent. By comparison, similar counties with no protected federal public land increased employment by 83 percent. Compellingly, Headwaters found that for every 100,000 acres of protected public land found inside county boundaries, per capita income was $4,360 higher. 

Another tool that Headwaters has pioneered is a free-to-use calculator for measuring the economic value of national parks for local communities across the country.

The worth of Grand Teton and Yellowstone is around $1 billion annually, anchored to nature tourism and wildlife watching—a figure also confirmed by separate economic assessments compiled by the National Park Service. Rasker says the economic value of nature throughout Greater Yellowstone "is at least three times that."

On top of it, the value of “ecological services” delivered by healthy landscapes are increasingly being recognized.  In the arid West, 33 percent of the region’s water supply starts as rain, snowpack or springs on national forests. National forests provide water that reaches the tap of 66 million people in 3,400 communities and possesses an economic value of at least $7.2 billion annually. 

That value will only skyrocket with climate change; moreover, when water flows clean off of healthy public lands it saves billions of dollars in expensive water treatment and pollution control costs, plus it fuels the recreation economy.

One pearl that emerged early in Rasker’s research 30 years ago and is only strengthening: America is a more mobile society and ever increasingly more jobs are being created by small business and entrepreneurs. A lot of creative people want to locate in healthy environments where they can raise their families and recreate.

The take-home is this: while resource extraction may indeed offer the prospect of short-term job creation, it more often than not results in booms turning to busts, leaving towns having to cope with myriad problems in the aftermath. 

Over time, land protection has not only increased the desirability of many communities but it yields a more diverse economy better able to navigate economic downturns.  In December 2017, Dr. Megan Lawson wrote about the migration of young people in the inner West. 

College students descend upon Bozeman to attend Montana State University but then leave in their 30s because they can't land a professional job; in Wyoming, resource extraction jobs keep some youth from leaving but those kids don't attend college and have less marketable skills if the boom goes bust.

One thing that Headwaters and its team of experts have discerned a point of insight for counties currently thriving and being inundated by growth: conservation, namely adopting an orderly strategy for confronting growth that protects natural assets in a community, has dividends for city and county coffers. 

Uncontrolled sprawl brings with it skyrocketing costs related to needs for expanded essential services such as new schools, law enforcement, fire protection, maintenance of roads, water, sewer, water treatment plants and other infrastructure. Often, the tax revenues generated from new subdivisions do not, over time, offset the costs associated with services—especially rural subdivisions which are sometimes located in prime wildlife habitat.

Let’s be clear: as Headwaters has identified, just being situated in a beautiful setting is no guarantee for prosperity; after all, the West is filled with pretty valleys, mountains and well-intended people. Two essential amenities that makes some counties more attractive to job creators are having ready access to commercial airports and high-speed internet or wireless. 

Entrepreneurs connected to the global marketplace need to think and physically be light on their feet. They often travel. Overcoming geographical isolation is vital. When they have those things, location matters less (they can live anywhere) in doing business and yet a healthy location matters more. Generally, the closer that a town is located to a commercial airport, the greater the likelihood its population is growing.  

Does that mean that having Delta flying into Malta, Miles City, or Riverton would be a magic elixir for improving their economics?  Not necessarily.  But what's poignant is federal public lands are not the burden they are portrayed to be, as huge amounts of taxpayer investment accompany them.

At a time when some lawmakers in the West have pushed to have federal lands divested to state control or have public lands sold off to private entities, Rasker has amassed plenty of solid data which serves as a counter argument that federal ownership is an economic impediment. 

In fact, he signed a letter to President Obama that stated "federal protected public lands are essential to the West’s economic future, attracting innovative companies and workers, and contributing a vital component of the region’s competitive advantage."  The message was signed by 100 economists, including a trio of Nobel Prize winners. The argument is spelled out in a report, West Is Best: How Public Lands in the West Create a Competitive Economic Advantage.

Another leading thinker, along with Rasker, has been Dr. Tom Power who was a professor at the University of Montana. In 1980 Power published a book that was ahead of its time, “The Economic Value of the Quality of Life” and followed it up with other insightful tomes as Lost Landscapes and Failed Economies: The Search for a Value of Place, Environmental Protection and Economic Well-Being, and in 2008, Accounting for Mother Nature: Changing Demands For Her Bounty that was edited by Bozeman free-market economists Terry Anderson and Laura Huggins.

Together with his son, Donovan, Power now runs a consulting business. Power says that since the start of the frontier mindset, the West has been propped up by subsidies that benefit certain industries. Instead of creating wealth that endured and towns that continued to thrive after the last flakes of gold were extracted, it left behind communities struggling with economic desperation in their wake. Many became ghost towns and some with huge environmental messes. 

Beginning in the 1980s Power was among the first to note that states which rely upon natural resource extraction, such as Montana and Wyoming, and fail to diversify their economy, were setting themselves up to fall.

Just as Power predicted, Wyoming has dealt with crushing revenue shortfalls caused by the downturn in the coal market linked more to an abundance of cheaper natural gas than environmental regulations related to climate change. Power also warned that the New Economy is replete with its own challenges, namely that it’s easy to criticize natural resource extraction of old but few conservation groups are willing to take a real hard look at the impacts of population growth and corresponding rises in the number of outdoor recreation users.

According to the Outdoor Industry Association, outdoor recreation generates $887 billion annually in consumer spending and is linked to 7.6 million jobs.  Separately, the U.S. Commerce Department's Bureau of Economic Analysis in February 2018 pegged the worth of outdoor recreation at $373.7 billion in 2016, or about two percent of the annual U.S. economy, and it is growing.

Put simply, how does outdoor recreation itself not become a consumptive industry focused only on monetizing outdoor activity and maximizing uses in the name of economic development which comes at the expense of the environment?  How much consumptive use can a place absorb before its essence is lost? How is the push to open more backcountry to more users any different from the same attitude of development that has created the suburbs?

None of the federal land management agencies in Greater Yellowstone, including the Greater Yellowstone Coordinating Committee, has a handle on what soaring numbers of recreationists means for wildlife, ranging from grizzly bears to elk, that depend on habitat security for their persistence. Stress levels for wildlife, scientists say, will only increase with more permanent residents, visitors and the effects of climate change.

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How is climate change a menace to public land management and the budgets of rural counties? One area where it is coming to a head is with the volatile mixture of growth and wildfire. It’s yet another of the many things that seem not to be reaching the conscious awareness of citizens and the public officials they elect, Rasker says.

Growth comes replete with challenges and this is a big one in the arid Rocky Mountain West, he notes. Communities that try to blindly think they can grow their way out of problems, without accounting for why costs are ballooning, will only make challenges harder to fix.

The refusal of counties and municipal governments to regulate the kind of development allowed in the wildland-urban interface has created a dangerous and expensive problem relating to wildfire—a danger being exacerbated by rising average temperatures and longer fire seasons. 

The U.S. Forest Service, for example, spends a huge percentage of its budget (about half of its $6 billion annual appropriation) on fighting fires at the expense of everything else it does—wildlife and livestock management, scientific research, having rangers available to help users, maintenance of trails and operation of campgrounds etc. 

This has only fueled calls from politicians antagonistic toward the federal government to sell off public lands, or privatize government services and even allow more people to continue swarming the forested wildland-urban interface, then addressing wildfire danger by razing the trees. In essence it also shrinks back the landscape's ability to support wildlife.

A huge dividend of having sensible regulations and forcing county governments and individuals to assume more of the liability is that sprawl, which erodes things like wildlife habitat, would also slow down. Rasker’s insights (made available in a widely viewed PowerPoint summary) have found a receptive audience among both fiscal conservatives and green-minded land protectionists.

A sobering message, however: Currently, only 16 percent of the West’s wildland-urban interface is developed, and yet this small amount already is driving escalating risks and costs from wildfire exacerbated by climate change.  Amid the unprecedented inward growth happening in regions like Greater Yellowstone and other areas of the Rockies that percentage could skyrocket, and with it could come potentially catastrophic consequences.

Smart growth, however, isn’t only wise as a cornerstone of fiscal responsibility; it helps maintain Greater Yellowstone’s rare ecological integrity.

Chris Mehl is admittedly biased about the work Rasker and staff are doing. For his day job, he works for Headwaters Economics. This son of a minister is also a former congressional committee staffer and he currently serves on the Bozeman City Commission. In November 2017, Mehl was elected mayor and will begin serving in 2020.

"[Rasker] understood before most how the economy of our region and the West was changing and what these changes would mean for communities large and small," he says.

Going forward, communities that protect the quality of life of citizens — which almost always have environmental components at their core — are more likely to remain attractive to entrepreneurs and prosperous at a time of huge tumult in the world, Mehl says.

While some insist that America’s greatest days were those when hard-working citizens went to the woods as loggers and toiled in timber mills, or worked in mines, drilled oil and gas wells, and herded cattle on horseback across the open plains, that era is mostly gone and nothing will bring it back. Technology, more than environmental laws, is to blame, Rasker says, because market economics constantly rewards bottom line efficiency.

Robots, machines and artificial intelligence already have and will continue to dramatically reduce the number of people required to do manual labor tasks. Montana’s lone U.S. House member Greg Gianforte and U.S. Sen. Steve Daines know that better than anyone. The company that Gianforte founded, RightNow Technology, later sold to Oracle, provided product offerings that allow companies to save money by using fewer people in customer service and business dealings. 

Rasker has nostalgia for blue collar traditions in America but, regrettably, he says, no matter how much people want to will the modern world away and have the country return to an earlier simpler time, it can’t happen. Ironically, the power of market economics is stacked forever against it. It’s like the blacksmith cursing the arrival of the auto age.

So where do we go from here? Make America Great Again is a catchy red-hatted slogan that Interior Secretary Zinke continues to tout as the Western envoy of President Trump. But many say that, as a Montanan, he knows it’s a false promise aimed at a vision that maybe never was for all citizens—or at least one that didn't last more than a couple generations and then proved not to be sustainable.

Rasker says the West needs to have an adult conversation that moves beyond tribalism, partisan politics, denial and vitriol. Resource extraction jobs are not going away, nor should they, he explains, but any promise they represent in achieving a “better West,” one which yields a marked improvement over boom and bust thinking, needs to be tempered by reality.

“Despite national politics, the biggest promise is to stop the us versus them rhetoric. We’re seeing lots of examples, driven by community-based collaborative efforts, that have led to, for example, responsible timber harvesting alongside new land protections,” Rasker says before heading on a mountain bike ride along an old logging road. “At the local level we still have the opportunity to get good things done.”