Rural Wrap

Telling the Good Guys
from the Bad

By Dan Steninger

had a visitor in my office the other day, back when gold prices were falling to their lowest levels in many years and locals were beginning to wonder if the good times might be coming to a close.

The visitor was a bit upset. This man put bread on his table by selling cars, mostly pickups, actually, to people prospering in the local economy. By running stories every day documenting the fall of gold, I wasn’t doing the guy any favors.

Needless to say, this customer was less than satisfied with the explanation that it was not my role to determine which news is good and which is bad; I have to print what I find out and then it’s up to readers to figure out what’s good and what’s bad and then act accordingly.

Ignoring gold prices in this part of the world would be a big mistake—one that could leave a miner stuck with a new pickup he couldn’t afford, or leave a car dealer with a whole lot of them he couldn’t sell. The more information available to people, the better their choices will be.

But I was unable to convince this unhappy customer that information is always good. If things should go south in the retail business here, this guy would have a promising future in the socialized money-lending business. Lack of information, coupled with misinformation, is the normal mode of operation in this field.

Just down the hill from the newspaper shop, for example, work is under way on a new Hilton Hotel. Financing for the project comes from a Nevada bank that, rather than performing due diligence on the safety of its depositors’ money, has instead accepted a guarantee from the federal government that the money will be repaid.

Which is not to berate the bank: the money entrusted to it by depositors is safe, barring (one of my fantasies) the admission of bankruptcy and dissolution of the guarantor. And why should the bank investigate the people it’s lending money to, especially if Uncle Sam tells it not to worry?

The villain in this, of course, is the central government, acting through the U.S. Department of Agriculture’s Rural Development Agency. Lest readers become confused, the USDA’s Rural Development Agency is separate from the USDA’s Division of Hassling Miners, Shutting Down Ranchers and Closing Off Roads, also known as the USDA’s Rural Anti-Development Agency, a.k.a. the U.S. Forest Service.

And the crime is the withholding of information from the credit markets, meddling with the allocation of resources and distorting the economic picture for those with a stake in Elko. Included in the indictment is the lesser offense of taxing the residents of Elko to support the numerous bureaucrats committing the central crimes.

And these are not victimless crimes. What happens if Elko’s economy should take a downturn? Not only would the owners of that new hotel suffer—as would the taxpayers if the owners’ suffering became too great—but the damage to existing rooming houses would be exaggerated by the fact a new hotel had just opened.

Even in the event there is no downturn, the federal involvement could cause harm. Someone not paying attention might see the new development, mistakenly assume all of those involved had studied the matter before putting their money at risk, and sink some of his own money into a similar development. Then he finds out that the first developer made a mistake, the bank failed to stop him because the risk factor was removed, and we have two new hotels with nobody staying in them.

But if that new Hilton were being built by a company using its own money, or financing obtained on the up-and-up from a bank, then the increased damage to competitors in the event of a downturn would be just a part of doing business in the hazardous territory of the free market.

But that is not the case here. The decision to build this new hotel was not made by a company putting its own money on the line, nor by a bank putting its money on the line, but by an agent of the central government who is putting nothing on the line and whose success will be measured by how far she has expanded her empire. And that expansion, typically, is in inverse proportion to the well-being of the empire’s subjects.

I would be doing my readers a disservice by withholding information from them, and the central government is doing a disservice to my community by sticking its clumsy hand into the local economy and distorting the information residents need to plan their actions. The question is, is the distortion the work of well-meaning but na´ve incompetents—the standard response by the Clinton administration when presented with mistakes it has made—or intentional disruption of the economy in a place the USDA would just as soon see turned into an elk and trout preserve? u

Dan Steninger is the Editorial Page Editor for the Elko Daily Free Press.


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