Attitude improvement: ignore broker envelopes
Pub Date: 11/1/2008
When Montana Tavern Times editor and publisher Cole Boehler suggested I write about the current state of the economy and its affect on the tavern/gaming industry, I began to do a bit of research.
First, I should have asked him, what exactly did he mean by "current"? The state of the economy on Monday or on Wednesday?
I began with a bit of history. After all, we were always told that one of the reasons you learn history is that it tends to repeat itself.
I remember reading that baseball usually booms in poor economic times. After doing a bit of reading, I am convinced that this was prior to when beer began selling for $8.50 a bottle at the stadium!
I also recall former Gaming Industry Association Executive Director Rich Miller telling me that gambling revenue usually does not fall with the economy. When one looks at the articles coming out of Las Vegas and Atlantic City, you have to wonder if this rule still holds.
In Atlantic City they are projecting gross gaming revenue to be less than the amount generated in 2007 the first time since casinos in that jurisdiction were approved that revenues have declined from the previous year.
Because Atlantic City is a long way away, I focused my local research on the question of travel to Vegas. A few informal "focus groups" led me to believe that a lot of us travel to Vegas for the shows, the atmosphere, the fun... and we do a little gambling while we are there. Many of those mentioned that it is the cost of travel that is limiting their visits to Vegas this year.
These folks may account for why Vegas has seen an actual decrease in gaming revenue while Montana has not. Although our 2008 gambling revenue did not increase by as much as it had in previous years, we still saw an overall increase of 4.38 percent.
My research indicated that history is possibly repeating itself in the area of liquor sales. While we may pass over a micro-brew and opt instead for a Budweiser, we simply are not entirely giving up on the little pleasures in life. Thus, this industry tends to not track with the rest of the economy'; a little silver lining in this grey cloud.
The economic turmoil is hitting Montana a bit differently. With commodity prices continuing to be high, we are still seeing growth and low unemployment. But things seem to be a little different this time (so much for that history thing).
For instance, Montana Quarterly recently did an article about the oil boom and its effects on Sidney. They mentioned a number of things that are different this time around.
First, with oil prices high, there is a boom everywhere so more of the workers are from close by rather than from all over the country. These people go home on their days of not to the local tavern.
Oil field companies are also recruiting a different kind of employee due to the new policies on drug testing all applicants. They have simply eliminated a lot of the "rowdies" that were associated with the last boom.
Finally, many have learned that what goes up...will go down...and are reluctant to open new businesses or build houses with 30-year mortgages for a short-term boom. While the community is certainly enjoying the new found wealth, it is substantially different than before.
While doing some research for the Realtors Association, I have learned that Montana is also not really falling victim to the "housing crisis" either. In most parts of the state, the median sale price of a home has stayed about the same as last year. Of course, this seems like a drop in an industry that was seeing double digit increases in values the past few years.
They are also finding that many people are holding off on buying a new home, probably not because their wallet tells them to, but because of what they hear on CNN and Fox News. No matter what the reason, it is not good news to the builders that are carrying new construction loans, nor the crews that were working on building those new homes.
Many of you have expressed frustration in finding (and keeping) good employees. I set out to learn whether a slow down in the economy has solved this problem.
What I learned is that this state is simply too big and too different to give that question one answer. But, for the most part, our economy has not slowed enough to solve the problem of a lack of quality employees.
What I hadn't thought of and probably wouldn't have found in a history book was the effect of commuting workers on our local economy.
someone who said her husband was going to be laid off due to downsizing. I inquired as to what company in Montana was doing this and learned that he works via computer and commuting for a company on the west coast.
I would guess that this phenomenum will have some negative effect on the parts of our state that have a large population that commutes to other states for work.
And of course, the financial markets have all of us wondering.
It was more than a bit disappointing to learn that a lack of available financing was likely sinking the refinery expansion project in Great Falls. This would have meant a lot of new jobs and an increase in the local tax base. So, although we didn't necessarily see a loss, we did forego a gain to our local economy.
In the end, with all due respect to my broker, the best advice about this economy came from a friend over a glass of good wine.
"Just don't open the envelopes from your broker. You can't do anything about it anyway."
I have been following this advice and am noticing a marked improvement in my attitude.
Source: The Montana Tavern Times, November, 2008, published monthly by Continental Communications, 125 W. Granite St., Suite 102, Butte, MT 59701.