Don’t Give Up on Markets

Property and Environment Research Center (PERC)

The financial meltdown has led many people, especially politicians, to blame the problem on market failure and to jump on the regulatory bandwagon. Though the problems on Wall Street are much more related to regulated markets than free markets, the call is for more regulation to fix failed regulation. Couple this with the fact President-elect Obama and a Democratically controlled Congress are unlikely to embrace Adam Smith’s notion of the invisible hand, and we can expect the anti-regulatory sentiment born in the Reagan administration to wane quickly.

Environmental protection will not escape the anti-market, pro-regulatory mentality. Despite the growing evidence that property rights and markets help the private sector improve environmental quality, three forces are likely to work against “free market environmentalism” and in favor of “regulatory environmentalism.”

First, reduced wealth and incomes resulting from the global economic downturn will lower the demand for many goods, and the environment will be no exception. It is well established that most aspects of environmental quality are positively related to economic growth. As GDP rises, people want cleaner air and water, more open space, and endangered species preservation. Of course, the level of these demands varies depending on how certain environmental goods directly affect human health and welfare. Thus clean air and water are demanded at lower levels of income than endangered species protection. Like it or not, most environmental improvements are luxury goods for which the demand moves inversely with the economy.

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Financial Crisis... You Are the Solution [Your Future Is at Stake]

The current economic “crisis” and shift in U. S. leadership leave business leaders uncertain about how to best position their companies. My advice? Let’s do what we do best: Roll up our sleeves and get to work on improvements. More importantly, let’s do things to position manufacturing for better times.

I find it interesting that little debate took place about investing hundreds of billions of dollars to “rescue” the financial industry...yet, as this is being written a huge debate continues about $25 billion for the automotive manufacturing industry. More than any other sector, manufacturing is an engine of economic growth: an additional $1.37 of activity for every dollar in manufacturing goods, according to the National Association of Manufacturers (NAM).

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Hard Times?

What would Milton Friedman do?

July 31st would have been Milton Friedman’s 96th birthday. Why should you care? Because the revolutionary Nobel prize winning economist had some answers for folks facing hard times, and many Americans could benefit from his wisdom right about now. Friedman was once asked why a wealthy economist would focus so much effort on poor kids from the inner city. He bowed his head and knit his fingers together. “What are we here for?” he asked. “We’re here to try to make the world a little better than we found it.”

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Peaceful "Enjoyment of Your Property” Except in Montana

The Montana Supreme Court finally handed down its long awaited ruling on the so-called “Mitchell Slough case.” Brought by the Bitterroot River Protective Association (BRPA), the appeal challenged the right of “rich out-of-state landowners” to limit public access to the Mitchell Slough. The plaintiffs argued that the Mitchell is a “natural, perennial-flowing stream” and as such is open to access by the public under Montana’s Stream Access Law (SAL). The state supreme court bought BRPA’s argument and reversed a lower court ruling denying public access.

The fact that the lower court found the Mitchell to be man-made while the supreme court found the opposite illustrates the slippery nature of the definition. Like so many legal battles, however, the technical legal sparring in the Mitchell case missed two truly important implications of the decision.

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Market Update

1 DOW 20,656.58
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2 S&P 2,345.96
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3 NASDAQ 5,817.69
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4 MDU 27.10
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5 SWC 17.41
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6 EBMT 20.15
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7 FIBK 38.85
+0.30 (0.78%)    
8 GBCI 32.71
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