I started this post off about a week ago, and then let it set as I was traveling for work. In the meantime OPEC had their meeting, and I've just posted on that. This post came back to mind at that time. According to the Tribune, Wyoming's economy is now flat. With the OPEC failure to put in place caps, I'm worried that it won't remain flat for long, however, which is what I had originally addressed here (i.e., a flat economy, although I thought that analysis somewhat flawed even prior to the OPEC story).
Founder of the House of Saud. Who would have guessed that the Saudi kingdom would prove so critical to the economy of a Rocky Mountain state?
Unemployment isn't increasing, and employment isn't increasing in the state either. A state employee terms it the "new normal".
Except, it's flat in part because of construction jobs.
And those jobs have been a largely fueled by school construction.
A series of major school construction projects has been keeping the state's unemployment figures from rising. They won't go on forever.
Which is provided for by coal severance taxes, a dropping revenue.
And by tourism. Tourism is apparently up. Which isn't surprising really, as with fuel prices in the basement, we should see more traveling, although apparently there hasn't been much of an increase in fuel consumption nationally. However, with gasoline now down below $2.00/gallon, we'll see if that holds.
$2.00 per gallon, by the way, is something I was frankly stunned to see.
Now, in the week or so that I've delayed on this story, I've actually seen gasoline at $1.87. It'd dropping like a rock.
And I'm going on record right now that its my prediction that we'll see it go as low as $1.00 in the next two years.
Even as it is, right now, in real terms, it has to be as low as its ever been, and I'd think that should make air travel and ground travel much cheaper. We oddly haven't been seeing an increase in fuel consumption as the price first stabilized, and then fell, but I'm guess that we will now somewhat. Or at least it'll begin to have a nationwide deflationary effect which will make the American dollar much stronger and create a real rise in earning power in everyone's bank accounts. Unless, of course, you were working in a state, like I am, where we depend on the coal and petroleum industries for our economy.
Now, in the week or so that I've delayed on this story, I've actually seen gasoline at $1.87. It'd dropping like a rock.
And I'm going on record right now that its my prediction that we'll see it go as low as $1.00 in the next two years.
Even as it is, right now, in real terms, it has to be as low as its ever been, and I'd think that should make air travel and ground travel much cheaper. We oddly haven't been seeing an increase in fuel consumption as the price first stabilized, and then fell, but I'm guess that we will now somewhat. Or at least it'll begin to have a nationwide deflationary effect which will make the American dollar much stronger and create a real rise in earning power in everyone's bank accounts. Unless, of course, you were working in a state, like I am, where we depend on the coal and petroleum industries for our economy.
Anyhow, this news time line is very familiar to those of us who lived through the early 1980s here. As before, there was denial, as in "this is only temporary", which ultimately yields to "oh, it won't be that bad", and followed by where we now are, which is "tourism will save us".
Tourism is important to the local economy, but it has problems as a n economic sector, not the least of which is that the wages it generates tend to be low. An added problem, rarely addressed, is that tourism and the mineral industry can be at odds which each other, at least to some degree. And the fact that the mineral industry is the high paying end of the economy makes quite a difference in the local impact of the various types of employment.
That the boom would end was something that those with a sense of history always knew. A belief was out there that it was going to last decades, but that has never proven to be the case. What is unusual, however, is that the end of this boom was caused by a pricing determination from overseas, with Saudi Arabia seeking to keep its market share. A boom had been fueled by OPEC oil policies in the past, but never a bust. Whether the Saudi gamble will pay off for them isn't yet know, so the ultimately impact on the local economy isn't either. But it is scary.
Petroleum and coal, it should be noted, have been part of the state's economic engine since the 1890s, but agriculture was the main sector of the economy for over half the 20th Century. Petroleum only took that place in the 1960s. This is significant as agriculture has actually lead the economic boom in some US states, and its proven to be an industry that not only has remarkable staying power, but staying power in a modern economy. But it's really dwindled as a sector of the Wyoming economy in recent decades, all while remaining the romantic sector of the state's image. In some ways, agriculture is really the reason for our tourism industry, whether that's realized or not, as range cattle production is the reason for the range being what it is. That's something that the state should remember, and perhaps taking a second look at agriculture and what it can, and does, for the state, should be done. It certainly can play a bigger role than it currently does, and its proven to have real staying power.
Petroleum and coal, it should be noted, have been part of the state's economic engine since the 1890s, but agriculture was the main sector of the economy for over half the 20th Century. Petroleum only took that place in the 1960s. This is significant as agriculture has actually lead the economic boom in some US states, and its proven to be an industry that not only has remarkable staying power, but staying power in a modern economy. But it's really dwindled as a sector of the Wyoming economy in recent decades, all while remaining the romantic sector of the state's image. In some ways, agriculture is really the reason for our tourism industry, whether that's realized or not, as range cattle production is the reason for the range being what it is. That's something that the state should remember, and perhaps taking a second look at agriculture and what it can, and does, for the state, should be done. It certainly can play a bigger role than it currently does, and its proven to have real staying power.
The cow, fabled in our cultural story, but often undersold in the post World War Two economic story of the state. Time to consider agriculture's position once again?
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