Improving Our Grade

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Created on Friday, 29 June 2012 19:01

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To report on the successes of individual entrepreneurs has always been one of the primary focuses of this publication. Talking to and interviewing business people, and reporting to the public what is usually very exciting and positive news, has always been a part of my experiences as a reporter since the 1970s. Rising to the top of those success stories, because of their importance to the basics of our economy, are manufacturers – the creators of new wealth.

Usually, business people are quite pleased with the opportunity to tell the world what they are doing, and I always enjoyed a very welcoming reception. Imagine my surprise, when that began to change, when occasionally the response was less than welcoming, when manufacturers began to decline the opportunity to toot their horns.

At first their refusals were inexplicable, but gradually the explanation emerged. Increasingly, in Montana, after getting some media attention, a company often experienced the dreaded phenomenon of state and/or federal agencies swooping down upon them to minutely investigate every nuance of their business. Publicity held the threat of focusing the attention of bureaucrats and singling them out for scrutiny.

No matter how well a company manages their business, investigation by government bureaucracies is a very frustrating and costly exercise. At the very least, it pulls precious time and resources away from production, and usually results in more prolonged involvement and consumption of capital, even when no infraction of rules are found, so it is not something any company wants to encourage.

When one looks at the fact that regulating agencies now have no compunction to tell citizens what they should drink or what they should feed their children, be assured such detailed interference in how businesses must function has been going on and ratcheting up, for a very long time. It is the reason for the persistent complaint from businesses that they are over-regulated.

There is a common saying that if you are in business than you are undoubtedly violating some law. So numerous and detailed have regulations become that it is impossible to know and comply with all of them. To be "inspected" or "examined" almost automatically means to be found out-of-compliance.

With this understanding of what has been happening, pretty much out of sight of the public, it comes as no surprise that Montana earned a "D" in a recent evaluation of the climate in the state for manufacturers. Montana has been earning a "D" in regard to manufacturing activities for a very long time. There are some very good reasons as to why the state is at the bottom of manufacturing production in a ranking of the states, beyond just our population numbers.

The situation is all the more disturbing since it is so unnecessary. Most of it has been brought upon ourselves, by a string of state legislatures which, over decades, zealously wanted to control every economic activity in the state. The intent of their regulations are usually left quite ambiguous and then dumped upon state agencies filled with equally as zealous bureaucrats, imbued with an anti-business mentality, which is fully reflected in the rules they write and enforce. Their consistent interpretation of legislative intent usually has little to do with health and safety concerns, but are aimed at halting business activity using the leverage of their regulations. They have been amazingly successful. For them Montana's "D" grade could be interpreted as a "B+".

Montana's status as a manufacturing state is something that is fully within our ability to change.

In the past there have been excuses made about our poor performance in regard to manufacturing – we are too far from markets, transportation costs are high, we are geographically isolated, we lack the technology and expertise, etc. Well, if any of those things were true, they are being rendered moot, at this very moment. Energy development has placed Montana at the economic forefront. Montana is no longer "geographically isolated," Montana is geographically on the front lines.

Companies in Montana and the region are spending billions and billions of dollars on things that must be made – that are manufactured. They should and could be manufactured in Montana, near the markets demanding them and near the experts who are often inventing them. For the most part large companies engaged in world-class enterprises are having to transport the things they need great distances to get equipment, tools, supplies and other consumer products to Montana.  Why aren't they being made here? Our next state legislature and governor need to answer that question.

It is also being discovered that even when things are being made here it is difficult to get them out of the state because we lack the infrastructure needed to get it to customers. Is that something that is going to change? Or, will Montana's leaders continue to capitulate to a minority of constituents who are usually funded by out-of-state groups, who are dedicated to keeping our jobs few, our wages low, and pushing our children and grandchildren to leave the state to find livelihoods?

There have been many recent public statements made by members of these interest groups that indicate that they either knowingly pursue a lackluster economy for Montana, or do not understand the importance of manufacturing and its accompanying infrastructure needs, to generate the exports that are absolutely essential to any strong economy. So profound is their lack of economic understanding that they often point to exports as a negative. Where would Montana be without the export of wheat and cattle?

And, yet there are people who protest the sale of products to customers elsewhere as a bad thing, as though they do not understand that this is the source of new wealth generation. These are the folks who decry the improvements that would encourage exports, and these are the folks who state legislators have bowed to in the past.

Are we going to continue to discourage manufacturing and bypass this huge opportunity to become a relevant player in world and national economic events?

Given what beholds Montana, today, there is no reason, other than our own choices, that Montana couldn't and shouldn't become a leading manufacturer in the nation. And, while, to reach that point may take some time, it must begin with changing that "D" to an "A," and that can happen as soon as next year.

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