DOMINOES
In a day of sound bites and band-aid fixes, sometimes it's important to realize how interconnected things are. Jim Gerrish, guru of grass management, is famous for answering almost any question with "it depends." Those are wise words.
Business folks invoke the 5 Why rule, which posits that if you ask why 5 times, you finally get to the root cause. And not until you've asked it 5 times.
A friend recently sent me a summary from a certified forester in Louisiana trying to explain why lumber prices collapsed over the last 30 years. Young people growing up in these families that planted acreage to trees expecting to cash in big are now disillusioned. Did their parents make a big mistake? Why the collapse? What do we do now with worthless forests?
To a farm kid in one of these families, it's a devastating turn of events. These kids remember planting those trees and hearing about $5,000 per acre in their future. They anticipated an income that would give them a salary when they grew up. Now the land is worthless, the trees are worthless, there is no salary, no money, and no future.
So what happened? According to this report, since 2007 the U.S. is building 1 million fewer homes per year, every year. In 13 years, that's 13 million homes. Commercial space doesn't count because it doesn't use much wood; single family homes use lots of wood. Nothing drives tree value like single family home construction.
According to the summary, two things drive single family home construction: desire to purchase a new home and the ability to pay for it. If either of these conditions goes unmet, new single family house construction drops. This is where it gets interesting. While the Dow Jones has escalated into the stratosphere, the sad fact is that new families are not building homes. The rental market is at an all-time high. Carrying a trillion dollars in student debt, millenials don't have the ability to pay for a new house.
Stability is not something you can create overnight. It's built slowly but can erode quickly. Things can fall apart much faster than they can be built. The average person invests when feeling stable. A stable government, stable economy, stable protection, stable money system, stable health, stable food, stable alliances, stable family--all of these things create an environment that makes young people ready and willing and able to invest in a home.
Right now, nothing is stable. Divorce, health, food, money, jobs, relationships--name the area and we're in a topsy-turvy situation. People are not stupid; they see things and feel things. Instability makes us all hunker down, isolate, and refuse big decisions. All of that stymies risk and adventure. And it comes down on that farm boy or girl in Louisiana and everywhere that was planning on a patch of trees to fund their entry into the family farm.
What's the answer? Somehow, that farm kid needs to get creative. What else can I do? Get a band saw mill and start milling lumber for the local market. Make wooden toys and furniture. Chip the junk and make compost. Cut the trees and turn them into pastured livestock fields. Crisis creates its own new opportunities. While it's easy to just complain about the situation, it's much more important to respond creatively. It's futile to hate the situation; instead, tackle it.
Notice in the stability list above, I did not mention institutions; I mentioned basic human and civilizational needs: sound money, open commerce, functional families, loyal relationships, dependable food. I would suggest that our institutions in these spheres need to be disrupted--destabilized--in order to restore stability in these foundational spheres.
If you could pick two spheres to stabilize and restore confidence in the future, what would they be?