I have friends involved in construction, finance, and real estate. None of them, not even those in Bozeman, are prospering as they were two years ago. Several have asked me to speculate on the future. I’ll focus on Bozeman, but will first outline the national context.

Initially note that we are among the many victims of massive federal mismanagement. For example, when federal government policy distorts housing construction by encouraging or demanding loans be made to those who have little prospect of paying them off, reality ultimately intrudes with foreclosures. The resultant damage is not constrained to the most egregious problem areas. All regions suffer as the financial system becomes nervous and risk adverse.

Second, all manner of marginally competent operators enter overheated markets. Naturally, when the system slows down they fail. While painful to some, this is beneficial on net. One important, underappreciated, but highly positive, function of the market process is to separate overly optimistic, unprincipled, or systematically unlucky people from the control of resources. That’s what bankruptcy does. The alternative is protracted waste and inefficiency.

Third, America has been riding on an unsustainable wave of exaggerated prospects of continually growing wealth. When sectors of an economy are booming, they become profligate. The retirement package signed by the Big Three auto manufactures, 30 years and out with full benefits, is unsustainable under any realistic assumptions. For decades, both management and labor made some truly awful decisions; they ignored the inevitable reckoning with economic reality.

Similar problems plague entire sectors of our economy, consider public sector unions. The 60 years of raucous income growth following WWII really are an aberration, not the norm. As a result, however, millions of families who should have been in condos or other modest housing bought houses far beyond their means.

This is a sketch of the macro context of local circumstances. Nationally, we can expect further decline in construction and housing. However, places like Bozeman are in a favorable situation. Here’s why.

People feel a push away from densely populated places where dis-amenities are growing. Congestion, rising state and local taxes, disruption from and fear of a growing underclass, are all things to escape.

Essentially, the consequences of political pathologies are becoming compellingly obvious throughout much of the failed states, including CA, IL, NJ, and NY. This results in reduced quality of life for all.

Concurrent with these growing negative features and processes elsewhere, living here becomes ever better. Improved construction, communication, and coordination technologies ease our life. They also greatly expand opportunities to both consume and produce. For many individuals, the source of income streams has become decoupled from the location of their residence.

Importantly, despite harassment from the TSA, the costs and inconveniences of distance from large cities are lower than 20 years or more ago. Winter hardships have dramatically declined while recreational opportunities have grown. Hence, talented people find our area an increasingly attractive place to raise a family or retire. In addition to offering accessible natural attractions like parks, forests, and wildlife, we represent a cultural citadel of traditional American, and especially Western, values.

The illogic and pathologies of national policies is becoming evident and projections are increasingly pessimistic. Concurrently, areas such as ours are perceived as comfortable, well appointed, and provisioned cruise ships capable of riding out stormy seas. Further, people understand that however great the plundering talent in DC, politicians are unlikely to find a means of taxing our cultural and ecological amenities.

As a result of these positive and negative factors and forces, on net ours and similar communities will become increasingly attractive to precisely those individuals who have the capacity and inclinations to contribute to society rather than predate upon it. (The remarkable success of Warriors and Quiet Waters, a program for severely injured military service men, illustrates the several natural and social qualities mentioned above.)

Americans move a great deal, nearly 40 million each year. This is remarkable. However, we don’t move in a random fashion. Generally, and there are of course many exceptions, people move to locate with those who share their cultural values.

While diversity is supposed to be a cherished value, aside from a liking for ethnic restaurants, people prefer to be with those who share their values. The much overused word “community,” presupposes a sharing of fundamental values. (The phrase, “community of nations,” is silly on its face.)

American history is replete with examples. The Philadelphia Main Line represents an escape from immigrants and the settlement of the original Northwest Territories reflects analogous preferences for settling among like-minded peoples. A preference for sharing community and culture can and often does trump simple economics.

For example, from the Civil War to WWII there was little movement from the South to the industrial Midwest despite wages being nearly twice as high in the North. Only about two million blacks and whites moved north while 30 million immigrants arrived in the North. And when the immigrants came, they settled in places where their culture could be maintained. Butte’s history exemplifies this settlement pattern.

Now we find upscale migrants moving to congenial places. They relocate where they expect to find people with complementary tastes and preferences.

Obviously there are many geographic, cultural, and demographic niches for individuals with “progressive,” politically correct values. They are widely discussed and positively presented in the mainstream media. There is even a “creative class, creative cities” movement devoted to the promotion of cities merging high tech with gay-friendly Bohemian attributes.

And then there is Bozeman, a tolerant town with a research university, an active civic spirit, and strong patriotic core. It also has remarkable air service, probably the best in America for a city of its size. Further, it has world-renowned access to a wide range of outdoor activities and Yellowstone Park.

This conjunction of qualities led to the creation of the Warriors and Quiet Waters Foundation. Its success signifies that Bozeman is the kind of place some people of quality want to call home.

You may find the above analysis cause for substantial optimism.