Sunday, October 12, 2008
Making Sense of Chaotic Times
As a boy, my dad enouraged me to find a place outside I could go to think, whether it was the top of a mountain or the side of a creek. I did, often, and that was probably the genesis of later starting my R.U. Outside business. Funny how it often takes a few decades to really understand our parents' wisdom (dad is pictured here with Bridger, in my backyard a couple of weeks ago).
In the process of pedaling bikes and riding snowmobiles up and down mountains, and fishing many creeks, I learned that the natural world is much more stable than the human world. By going outside, we connect more directly to what's inside each of us. Maybe time in the woods should be mandatory for everyone on Wall Street and Washington, D.C. these days.
I majored in Economics (and English) nearly twenty years ago, and took several courses in International Economics. It was fascinating, and real to me because of time I had spent in Europe. I wrote papers on "Stagflation," "International Relations," "Inverse Supply-Demand Curves," and "International Monetary Policy." It all made sense on paper, and I never imagined I'd hear the words "Global Economic Meltdown" in my lifetime. Yet here we are, with those words ubiquitous in news stories this week.
What happened? Well, a lot, and much of it was borderline criminal. As for "how did it happen," here's my take: beginning in the 90's and accelerating with each passing year, the U.S. has transitioned from a Production Economy to a Consumption Economy. We don't make things here anymore. I didn't realize the extent of this until 1993, when I went to Taiwan to meet with a potential product manufacturer for my business. They told me "Rick, this is good arrangement. Here, we like to make things; there, you like to buy things." I'll never forget that line. As a result, the slippery profit-seekers in this country had to invent new ways to grow GDP and line their pockets...like twisted loans that fueled the housing boom, all made easier by the instantaneous worldwide communication of the Internet.
To compensate for the exponentially expanding trade deficit, our government has been borrowing increasingly large sums of money from other countries. I mean, a trillion-plus dollars of debt takes time to accumulate, doesn't go away easily, and inevitably drags others into the pit. I'd say it's time for America to start some new habits, and re-awaken good old habits. Let's make things here again.
I would gladly...nay, gleefully...purchase as many R.U. Outside products as possible from U.S. factories, if the manufacturing facilities existed. I'd pay a little more for the honor of made-in-U.S.A. products, and I think other company owners would, too. But, the production capacity needs to be rebuilt.
Currently, we're able to make R.U. Outside socks and a few neoprene support products domestically, but that's about it. Tooling and materials for boots, gloves, headwear, gadgets and even fleecewear has slowly and steadily migrated overseas since I started the business in 1992. Let's bring it back, folks, and watch the economy improve sustainably.
What does all this mean for Driggs, Idaho? First, it has become obvious that the local economy was riding much too heavily on the real estate and housing boom. Nearly half the population of Teton County was working in Title Companies, Construction, Development, Banking, or Real Estate (we have four resort golf courses underway, and this in a valley with only a sixty-day growing season). Those numbers will decline, which will be a good thing in the long run. Maybe some family Potato and Barley farms will survive, now that land prices have declined somewhat. And, most likely, Driggs will emerge as a recreation-based economy, with the continued expansion of Grand Targhee ski resort and the enduring beauty of the mountains.
In the end, having someplace to go and think is priceless.