Posts Tagged → economy
Red oak and rain: Taking a strong economy for now while America fights for an even better future
Our present tariff battle with communist China has some personal pain associated with it, but I and everyone in business I deal with say we are ready and willing to put up with it for the long term betterment of America.
“I am just sitting here watching the rain come down,” says ‘D’, a young forester I have worked with for almost twenty years.
A super hard worker, risk taker, and fourth generation forester\logger (he is the first in his family to have a college degree, and in fact he has a Masters in Forestry), ‘D’ has a young family to feed and a great deal of investment in time, equipment, and standing timber that he cannot do anything with, or earn money with, so long as it rains.
With incessant rain like we had throughout 2018 and now well into 2019, most forestry operations stop. Marking timber on steep mountain sides, building roads into timber, cutting, skidding, and hauling timber just is not safe or environmentally possible in rain. Then, as a result, the sawmills slow down. They cannot get the trees they need to make the hardwood lumber products so much of America and the world require for flooring, cabinetry, moulding, doors, tables, furniture, etc.
But the rain is only part of the pressure on the timber industry.
Almost half of Pennsylvania’s hardwood timber economy is comprised of the red oak tree, which grows a beautiful wood used around the world. Until the tariff spat began last year, China was the primary destination for almost all of Pennsylvania’s red oak. China took our exported red oak logs and manufactured all kinds of wood products that they then sold back to American companies. When the tariffs started to bite in 2018, demand for red oak logs began to slow, because Chinese companies could not afford to compete on that new level playing field. Their own tariffs on manufactured American goods had protected them from competition, and so with tariffs on their products, their own manufacturing slowed down, and their decreased need for raw materials followed. A year later, the demand for red oak lumber has nearly died. Spectacular high quality red oak trees, that six months ago were highly sought after in a fiercely competitive free market, are now being turned into railroad ties and pallet wood (some wood workers specialize in making beautiful furniture from homely oak pallets; well, guys, get ready for a whole lot of very nice red oak pallets to become available).
Standing red oak trees have lost over half their value since this time last year, and as a result, roughly a third of Pennsylvania’s powerful hardwood lumber industry is at a stand-still, with landowners, foresters, loggers, and sawmills trying to figure out how to make up that lost productive time, and lost revenue, and to find another tree species to take the place of the red oak.
Back to the rain… the forest products industry can weather this storm, as well as the tariff tiff with China.
“It’s for the best, for a better America, a better economic future for all of us” says Mike, a heavy equipment operator from Renovo, Pennsylvania, to me this morning, as he finally found time to discuss a timber project we have together, and the China tariff effects on it.
Mike, too, is stalled out temporarily by the non-stop rains, and he is also bitten by the temporarily slow red oak market.
“It hurts, but we needed to do these tariffs,” says Mike.
“It’s sacrifice and pain now, so that America will have an even better economy in the future,” says ‘D’.
I feel the same way. Pain and sacrifice, risk taking and hard work, all for a better future for us and our children. We will all be creative and find ways to make a living; after all, overall the economy is very strong.
Carry on, Mister President. We understand what you are doing and why you are doing it. The tariffs hurt, but we support you. It is about damned time that someone in Washington, DC, gave a crap about our country and we people who labor out of sight in flyover country.
Logger “Pete” takes a breakfast break on his log landing. A tough, super hard working little Irishman from central Pennsylvania, it’s Americans like Pete who keep our economy going from the ground up
A few local signs that the economy is smokin’ hot
Me: “Hi. I would like to have Cleon make me log arch, one that I can hook to my ATV, that is stronger than the Chinese junk being sold everywhere, and that is less expensive than the crazy-priced LogRite arches.”
Lynette: “Josh, what is your time frame?”
Me: “Well, I can use it in a week, but two or three weeks is no problem.”
Lynette: “Here’s the thing about timing. Back in June, we were about to lay off one of the welders, but we put out bids on ten jobs, any one or two of which would have carried us through the year. And between last week and this Monday we heard back that we won every single one of them. So we will not only be retaining that junior welder, but we are now looking for about five more to help us meet our commitments. We might not be able to get to your log arch for a while, but one of the men will call you back later today.”
And then one of the men did call me back, with terms and a price that more or less said “If we are going to make this for you, then you are going to pay big for taking us away from our real work.”
Another sign that our local and regional economy is smokin’ hot: The log trucks, the pallet trucks, the lumber trucks on the roads EVERYWHERE and at all times of day.
Never before have I seen so much activity in just one business sector, as I am seeing now in the timber industry, except maybe in 2008 when the Marcellus Shale boom was indeed booming across Pennsylvania.
Log trucks are especially visible. How can you miss a log truck? It dwarfs every other vehicle around it, and looks incredibly incongruous. Log trucks have these huge wide open bays or bunks to hold the logs, and a boom arm with a claw for lifting up 6,000 to 10,000-pound logs. A log truck has about 5,000 board feet or more of medium to high grade logs of all types on it, heading from someone’s private forest to someone else’s mill. From there the logs will be carefully analyzed for grade, and either sold-on or sawn up on site. Hardwood lumber is used in flooring, cabinetry, and furniture, all of which when active indicate a strong consumer and home building economy. Even tulip poplar, once sold for pennies per board foot, is now used for couch frames and cabinetry frames.
At every timber job there are expensive machines at work, with drivers who earn enough money to support a family. And the loggers, guys born with a chainsaw in one hand and a rifle in the other, they cut down a dangerous tree every ten minutes, then lop it and move on to the next before choking up the logs and skidding them to a landing.
Then there is the landowner, who gets good money for something they did absolutely nothing to create.
The sawmills, whether small Amish mills or huge international mills selling hundreds of thousands of board feet per week, are beehives of activity. Every person working there is earning money, and spending money, and contributing toward the larger economic activity around them.
Say nothing of the new homes and kitchen cabinets being built, or of the beautiful hardwood flooring and furniture being made for those new homes. All from someone’s private forest.
The point is, these are just two small examples of how the economy is exploding, and how after many years of stagnation we finally get to do more than scratch out a living, but actually do well and pay for our kids’ questionable college “education,” buy new cars, take nice vacations, and set something aside for our later years, when we are no longer able to work so hard.
It really is a new day in America, and boy does it feel good. One gets the impression that this good feeling is widespread across America, with the sad exception of places in North Carolina and Florida, recently hit hard by hurricanes, and our hearts go out to the victims there. The one thing they can rest assured about is that the materials needed to rebuild their lives are on their way as I write these words, and they are America-made, and America-grown.
Do you drink wine from a human skull?
Jakob-Creutzfelt Disease in Europe was traced back to a self-styled secret society in Italy, where members filed solemnly down into ancient burial crypts and drank local wine from the skull of a deceased past master.
No lie. Look it up if you like. Yes, people do strange things.
Even hundreds of years later, after the past master had died, the JCD ‘bug’ was still infesting that old skull of his, and the wine swilled from it carried the bug down the gullets of the secret society members and into their bodies. A lot of these secret society members died bizarre, horrible deaths, prompting health officials to investigate what was going on.
To date this is likely the only investigation in Italy’s history that was both scientific and professional. And that is because it involved drinking wine.
JCD basically eats your brain and leaves you a drooling, deficient, dying husk of a human being. You die pretty quickly, and it is an ugly death.
“Spongiform disease” is also how this kind of prion-based attack is known, because the person’s brain looks like a sponge, riddled through with holes where brain matter ought to be. Survival is not an option.
There is no cure, and the cancer-like prions use their protein shells to fully resist fire, cold, desiccation, Hollywood, and high cholesterol. Once a prion is present, it cannot be destroyed by anything human. Prions seem to live forever in the dirt under your feet, and possibly in food grown in that dirt, like corn and soybeans.
JCD is known as Mad Cow Disease among bovines, Scrapie among sheep, and Chronic Wasting Disease among cervids, like deer, here in America. In other words, there is a prion out there for every mammal, though this is a new science we are just beginning to understand.
For a long time the guy who discovered prions was said to be a fake. And then his work was replicated, and he became a celebrated scientist. The politics of “climate change science” do not apply to prions and human health, thankfully.
One thing is clear: Prions develop most among wild animals that are new to being domesticated, like deer. It is their bodies’ reaction to being unnaturally cooped up. Something in the wild animals’ artificially confined body is misfiring, going haywire, and imploding.
CWD has its genesis in the wildlife management equivalent of drinking wine from a human skull: In most states, including Pennsylvania, deer farms are not required to have two strands of metal fencing separating the confined deer from wild deer. Deer are not yet a domesticated species (if cows, sheep and goats are any indication, it will take another 3,000 years to domesticate deer), they are still wild, and they herd up for protection, as do all social animals.
As a result, wild deer approach the deer inside the deer farm enclosure, touch noses through the fence, exchange body fluids, and get CWD. The wild deer then leave and go off into the wild deer populations and spread CWD among otherwise healthy deer across the landscape.
As a result of this madness, CWD is spreading through Pennsylvania like wildfire, except no one is paying attention. Not really. Only the Pennsylvania Game Commission is trying to solve this crisis, and the agency is being stonewalled at every turn.
You know why?
Because the Pennsylvania Department of Agriculture is protecting a nascent $16 million annual deer farm business sector from having to install double fencing.
Do you know what hunting is worth annually in Pennsylvania? It is worth $1.6 BILLION, and a great deal of that is from deer hunting.
So here in Pennsylvania, we have a state agency, the PA Dept. of Agriculture, essentially preferring the complete shielding of deer farms from a necessary and responsible practice, and thereby sacrificing Pennsylvania’s wild deer herd and the huge sustainable, renewable economy built on managing those wild deer.
This poor policy from the PA Dept. of Ag is really bad government on display. This is Bad Government 101. Actually, this is failed government.
You cannot make this stuff up, and the CWD situation here highlights why political involvement in a democracy is so important. If you sit back and wait for someone else to solve problems, most often no one else will get involved. You have to lead the charge yourself, and thereby attract fellow supporters.
If you want to get involved, call the PA Dept. of Ag at this number, 717 -772-2853, and tell the nice person who answers the phone that you want DOUBLE FENCING at all deer farms. It is as simple as this.
And if you don’t give a whit about hunting or deer management, consider the impacts CWD will have on other wildlife beyond wild deer. It is an earthquake building under our feet, and we can stop it, if we want to.
A Severance Tax, now?
Talk about an addiction to spending other people’s money.
Yesterday in southeast PA, far away from the communities where this issue is most important and the citizens might not be so welcoming, Governor Tom Wolf staked out his position on creating a new 5% “severance tax” on natural gas from the Marcellus shale feature.
Right now, natural gas is selling at historic low prices, especially here in Pennsylvania. The financial incentive to drill more or spend more money to get more gas is very low, and drill rigs have been disappearing from across the region for a year.
The Saudis began dumping oil months ago, in an effort to punish competing oil producers Iran and Russia, with the secondary effect of dropping gasoline prices so low that the natural gas industry got hit from that side, too.
So now is not only a bad time for the gas industry, it is also a time of greatly diminished returns on investment and on royalties received. Scalping 5% off the top of that is punishing to everyone, including gas consumers, who will see their rates increase proportionally.
Here’s the biggest problem with a severance tax: Pennsylvania already has a 3% impact fee on Marcellus gas, and a Corporate Net Income Tax of 9.99% (let’s call it ten percent, OK?). Most of the other gas and oil producing states have no such additional taxes; their severance taxes are the one and only tax their oil and gas producers pay, not the multiple high taxes and fees drillers in PA pay.
Pennsylvania government is therefore already reaping much higher revenue from the gas industry than other gas producing states. That means that the companies doing business here are already burdened much more than elsewhere.
So adding a severance tax now, at this economically bad time, without commensurately lowering other taxes, or the existing Impact Fee, makes no sense. Unless the people promoting this have an infantile view of how America and business work.
And that right there is the problem. Way too many advocates for tax-and-spend policies like an additional severance tax have a Marxist view of business; essentially, to them, business exists to pour money into liberal schemes.
And speaking of spending, who believes that spending more and more and more taxpayer dollars on public schools, public teachers unions, and public teachers’ pensions, actually equates with better education?
So many studies disprove that (see the Mercatus Center), but it is a liberal mantra that taxpayers must spend ever more of their money to support public unions that support political liberals. And both parents of students and taxpayers alike now correctly see that system for what it is – simple, legalized political graft to fund one political party.
Public schools are mostly a disaster, yet teacher’s unions and their political buddies continue to pound on the table for more and more money. Homeowners are essentially now renting their houses from the teacher’s unions, and proposed laws like Act 76 seek to fix that unfair situation by removing the vampire fangs from homeowners and letting the larger society pay for its expenditure.
Going door-to-door for political races year after year, property tax has been the number one issue I have encountered among elderly homeowners. So many of them can no longer afford to pay the taxes on their houses, that they must sell them and move, despite a lifetime of investing in them. This is patently un-American and unfair.
So Tom Wolf is moving in exactly the opposite direction we need on this subject, and instead of trying to fix the tax situation, he seeks to make it worse. To be fair, Wolf campaigned on raising taxes. He just needs to remember that he did not get elected by voters who want higher taxes, they wanted to fire former governor Tom Corbett.
Forget sexy issues like “climate change,” let’s solve real environmental threats
By Josh First
Pennsylvania’s forests are suffering from a one-two punch-out by both invasive bugs and pathogens that kill our native and very valuable trees, and then by a following host of invasive vines, shrubs, trees, and other plants that are filling the void left after the big natives are gone.
Today yet another bulletin arrived from PSU plant pathology / forestry researchers, noting that ‘sudden-oak-death disease’ was detected on a shipment of rhododendron from Oregon.
Oregon got it from Asia.
Pennsylvania’s forests are becoming full of non-native, invasive plants, bugs, and pathogens. Each of our valuable tree species now has its own specific attackers. God knows what our native forests will look like in ten years.
The Asian emerald ash borer is literally making ash trees go extinct as a species. I see whole stands of forest, hundreds of acres, where not one ash tree is healthy. Dutch Elm disease killed off most of our elms in the 1980s. An Asian fungus killed off the once incredible and mighty American chestnut tree. Forget pathogens and bugs, because lots of aggressive, fast-growing invasive plants are taking up room on the forest floor, pushing out and overwhelming needed native plants. Few if any animals eat the invasives, which are often toxic and low value.
Human-caused climate change? It is a sexy political issue, and it is highly debatable. But forest destruction from non-native invasives is a real, tangible, non-debatable, non-politicized issue we need to address immediately. So many people and wild animals depend upon our native forests, that without them, our rural economies could dramatically fall and our wildlife could disappear.
Forester Scott Cary had this to say, tongue somewhat in cheek: “With the 1000 cankers disease in Walnut now in southeast Pennsylvania, that area is quarantined…maybe we shouldn’t be so hard on black birch and red maple [low-value native species long observed to be acting like aggressive, non-native invasives, and therefore harvested aggressively by responsible forest managers], that may be all we have left to choose from. Of course, Asian long-horned beetle may get the maple, so that leaves us black birch, the tree of the future.”
That is a sad place to be, folks. And to think that so much money is wasted selling the phony issue of human-caused climate change, while real environmental disasters are actually happening…it shows you just how dedicated the environmental Left is to political dominance, not useful solutions to environmental problems.
Happy New Year 2012, Guaranteed!
2012 begins in a few hours.
And what’s exciting to many Americans is that 2012 marks the end of the Obama Experiment.
So many Americans invested in the hokey “hope and change” snake oil, and as New Jersey governor Chris Christie said, four years later America remains hopeless and changeless. Obama has done well at luxurious taxpayer funded vacations, but he has remained aloof and immature throughout his tenure. His greatest distinction is to have become “Divider in Chief,” due to his class warfare methods that pit Americans against Americans.
Watch as Obama gets voted out and the economy turns around in weeks. So here’s to a happy new year, everyone!