Our Family’s Rogue River Trip & Forest Fires -Where Government is Good and Why Business is Great
We had a most remarkable family vacation last month – a week long float down the Wild & Scenic section of the Rogue River. The Rogue River has a treasured place in my wife’s family legacy. When she and her brother were children, her father took them down the same stretch of the Rogue, a trip that they still fondly recall as the best vacation of their childhood. Her father has been recreating that memory for his grandkids, by taking each of them two by two on the same trip. This year was the turn for the last and youngest grandkids, and so my wife and our family, and her brother’s family decide to join her dad for this last trip, to enjoy and celebrate together a cherished family adventure.
Unfortunately, our trip almost did not happen. We had booked our float early in the year, but a few weeks before, the outfitter called us up to inform us of a huge forest fire in the area, and the trip was cancelled. We were crestfallen, and decided to head down to the beach on the Oregon coast as a substitute.
To our surprise, the outfitter called us while were in Cannon Beach to tell us that the forest fires had subsided enough to allow their boats to get through, and told us that if we could be there the next day that we could still go. It was a test of our extended family’s spontaneity – we had not packed any outdoor gear with us, and were not prepared for a week in the wilderness. We decided to take advantage of our serendipity, and after a quick shopping spree at REI we headed down to the Rogue.
Our float trip was glorious. Wild animals made cameo appearances every day; numerous bears, deer, otters, dueling golden and bald eagles, salmon and steelhead, and more. We slept at night under the stars on warm sandy shoals, and the shot the wild rapids of the Rogue during the day, either in rafts or inflatable kayaks. Sumptuous meals on the riverbank, trail runs down the canyon, cliff jumping, swimming and exploring the river, water fights, and raucous card games filled the rest of our time.
One of the special and unusual highlights of our trip was the forest fire. It was still raging, and on several occasions we floated past active fires, the trees and forest ablaze as we drifted by on the river below. Our first night on the river was lit by the glow of trees burning through the night on the hills above us.Midday in the midst of a forest fire – smoke almost completely obscures the sun.
We were thrilled to see a spectacular event that not even our seasoned guides had witnessed before – a Blackhawk helicopter swooped down the steep canyon walls right above us, hovered over the river to suck up some water through a hose, than sharply banked up and over the canyon to dump its load on the fire. Several times we passed crews of hotshots and firefighters. In fact our family was the only other commercial rafting group we saw on the river during our entire trip – a testament to our good fortune, or perhaps our foolhardiness!
A Blackhawk firefighting chopper takes on water in front of our family.
To bring our newsletter back to an economic perspective - it occurred to me during the trip that the forest fire was a crucible for, and provided a clear example and instruction of how government and private business enterprise can and should co-exist in our economy.
Government and Externalities
Economics defines an externality as a consequence of an economic activity that is experienced by unrelated third parties. The textbook example is that of a factory that causes pollution while producing a product. The cost of that pollution is not reflected in the price of the product, but the surrounding community bears the cost or consequence of the pollution by living in a defiled environment.
One way to think of externalities is as a cost that everyone pays for but no single entity has to bear. Economics teach that an important function of Government is to deal with and mitigate externalities through direct action or regulation.
Our Rogue River forest fire is an example of an externality. The consequences of the fire were degradation of air and forestland, loss of recreational opportunities, and destruction of property and timberland. However there was no free market profit motive to control the fire on a wide scale, and so government is uniquely and well suited to step in and direct the firefighting.
We met the head of the firefighting crew, a grizzled veteran named Kevin. He regaled us with stories of fires he had fought through the years. This summer alone he had been on the front lines in Oregon, Nevada, Utah, California, and Colorado. Kevin had only been home for his August anniversary twice during his 32 year career. He and his crew’s job is dangerous, difficult, and extremely valuable, especially to folks who live in and near the forests.
A firefighting crew on lunch break.
These government employed firefighters were doing important and valuable work, and fulfilling a function that might not be done easily or even at all by private business. If you have been reading my newsletter through the years, a frequent topic has been the potential deleterious impact of government intervention in the economy through massive money printing, and astronomical debt loads. By contrast, the brave crews on the Rogue River were an example of government functioning as it should, protecting the best interests of the country in a way that private enterprise could or would not.
Free Enterprise and the Power of the Profit Motive
The Rogue River forest fire had a devastating impact on the local economy. Tourism was way down, hotels were empty, food and gas sales plummeted, and of course recreational business like Echo River Trips, our outfitter suffered as well.
Businesses take risk in order to try and earn a profit. Echo is no different; they purchase rafts and gear, rent an office, pay for advertisement, hire staff, and incur many other costs - all in the hopes of earning a profit for their efforts.
In our particular situation, they took on even some additional risk and discomfort, running a trip at the heels of an active forest fire, to try and earn some revenue. (I might hasten to add that none of us ever felt the slightest bit unsafe, and that the guides Nate, Chrissy, and Emily took wonderful care of us.)
Their efforts resulted in more money for their company, their river guides were paid (which they would not have if the trip had not happened) and a whole chain of other folks profited; the food vendors from the great meals we had on the trip, the hotel we stayed in, etc. Echo’s risk taking resulted in positive economic benefits for many people; employees, the owners, and vendors – and for our families, resulted in a lifetime memory.
This whole risk-taking, free business example is the economic foundation that made our country great.
As investors we want to watch for and hope that our government leaders and laws encourage risk-taking/profit making and yet properly regulate externalities like that forest fire on the Rogue River. A proper balance is key to making our economic system and investment markets operate at an optimum efficiency.
(By the way, if you are interested in a river float trip like this, I would unhesitatingly and warmly recommend Echo River Trips. Our family is already planning another river trip with them next summer! You can find out more about them at http://www.echotrips.com/ )
Swim Across Lake Washington
Several people have asked how our company’s team did in the Puget Sound Blood CenterSwim for Life across Lake Washington. We successfully completed the 2.4 mile swim, and are planning on sponsoring a team again in 2014. If you or one of your family members is feeling especially adventurous, please join us next year! Gevers Wealth Management Employees Willy, Jake, and Caleb swimming from Medina to Madison Beach. You can see the two towers marking the finish line in the upper right hand corner. Photo by Richard Lane.
We hope that you had a great summer. We are looking forward to our next meeting, and remain completely committed to your financial well-being.
William R. Gevers
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Copyright 2013 William R. Gevers. All rights reserved.
Gevers Wealth Management, LLC
5825 221st Place SE
The views are those of William Gevers, Gevers Wealth Management, LLC, and should not be construed as individual investment advice. All information is believed to be from reliable sources; however, no representation is made as to its completeness or accuracy. All economic and performance information is historical and not indicative of future results. Investors can not invest directly in an index. Please consult your financial advisor for more information.
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