My reporting skills are a little rusty. But last Friday we had one person on the editorial staff off on vacation, another at the dentist, another one on deadline for this week’s cover story, and our ace HSU intern on spring break. We all had agreed that it would be great to cover the keynote address at the Redwood Region Logging Conference by “Landowner, Entrepreneur and Community Activist Rob Arkley,” who “is known for his strong beliefs and straight talk.”
So I volunteered, grabbed a tape recorder and a camera, and drove off in the pouring rain. This should be interesting, I thought. After all, it’s been a relatively quiet couple of years from Mr. A with the Great Recession and all. He’s down from two jets to one and was even spotted a few months back at the Dallas Airport waiting for a commercial flight like the rest of us.
He did not disappoint.
“I heard that Rush Limbaugh spoke a number of years ago so I’m really humbled to follow in such great footsteps,” Arkley told the packed house in the Home Economics Building at Redwood Acres Fairgrounds to a low roar of approval. (I looked around the room and, yes, they looked a lot like KINS demographics.)
Arkley asked and answered his own question: What was he doing key-noting the conference when his “knowledge of timber, logging and milling couldn’t fill a thimble?” Well, he said, “I do own several thousand acres that Cherie and I bought in California [and] a couple thousand acres in Louisiana that we log.”
He paused briefly and added: “By the way, it’s a lot easier to get a logging plan done down there.”
The real meat of his talk was the economy – what the heck happened and why, and what can the audience -- landowners, log truck drivers, mill operators, and a few green-shirted U.S. Forest Service people -- look forward to in the near future?
First, he delivered the history according to Arkley. Just what were people thinking in 2006 and 2007 when the price of houses just kept going up and up and up some more? And then, when the air began to leak rather badly out of that balloon, people still refused to believe it. Could home prices actually go down? Oh no, we were told. It just takes a little longer to sell!
“OK, let me tell you something, guys. Longer time is the same as lower price,” he said. To which he almost added, “Duh!”
“Then in 2008 we did really come close to falling off the precipice. We really did come close to an economic meltdown.”
Arkley started Security National in 1987. It’s where he made his money, and he made a lot of it. He told the crowd that after the housing market nosedive nationwide, he is now the very last man standing in his industry. Security National and, at its peak, about 150 others, were basically a secondary market, companies that bought groups of loans from the big banks because banks need capital to make more loans. Banks especially liked to get rid of loans that took too much time to service or were troublesome. Security National specialized in buying lower-grade loans at a discounted rate from the banks and making those loans perform. The company survived, but at great cost. Arkley saw his wealth – proportionally – shrink at a much more dramatic rate than the rest of us. He knows what he’s talking about, so we all listened up.
Since the near-meltdown, he continued, “We’ve been working with lenders and I’ve only had one lender get nasty with me – BOA [Bank of America], let’s use their name! I forgive, but I don’t forget. But we’ve had a lot of people stand with us – from Wells Fargo to U.S. Bank. Business is now profitable again -- rather dramatically. So that’s fun, finally.”
Arkley said during the last few years he had a lot of down time “to read and study … to figure out what happened and what was going to happen.”
“Credit stopped. No one could do anything. The risk was then transferred from the private individual to the banks, [and] through TARP (Troubled Asset Relief Program) the banks effectively transferred the risk to the government. Now the governments are free-wheeling, running deficits.
“Do these deficits matter? Oh, yes. I can’t say it any other way, guys. We are so screwed. It’s going to take 10 years to work through this.” He warned that the residential real estate market hasn’t bottomed out yet; it’s still dropping by half a percent per month. He expects it will continue to do so until about the middle of next year, but it will take until 2015 for the market to absorb excess inventory. Taxes will go up and tax cuts will be tougher to come by.
But Rob Arkley was not all doom-and-gloom last Friday. He reminded the loggers of their “glory years” in the early 2000s. “It must have been wonderful to be a logger, to be a mill owner.”
Then came the housing collapse, retrenchment, and finally an economy that is anemically growing again. To those sitting in the audience, he said, “You guys have made it through. … We’ve found the bottom. The volume of merchantable timber is on an incline that will continue on and on.”
He saved his sharpest jabs for the EEs – "extreme environmentalists,' which he later distinguished from real environmentalists. He said he couldn’t really understand the timber wars all these years because the EEs kept changing their target and tactics. First there was clearcutting, then the spotted owl, the fisher, the murrelet, then cumulative impacts -- “a great theory” -- then CO2. “Now they’re on to clean water.” And EE Supervisor Mark Lovelace? Don’t get Arkley started!
Arkley handed out a few shout-outs, too. First up were big landowners.
Sierra Pacific, Simpson or whatever-they-are-called-these-days-Green-Diamond, Humboldt-Mendo, the big guys, “spent money to make your land more valuable. Never forget that. … They have absolutely done the science. … They’ve spent the millions and millions of dollars. They have allowed every small landowner to retain and create value in their timberland” by fighting the EEs in court.
So who are the real environmentalists?
“There is not one of us in this room that is not an environmentalist. … Frankly, guys, you have not been great packagers – branders of yourselves. You need to improve. You ought to put ‘Green and proud of it’ on all your cars. … It’s incumbent upon us to make sure everyone gets that.”
Rep. Mike Thompson, a Democrat, received a heartfelt compliment from Arkley that took the audience by surprise.
“Mike Thompson came to bat for us recently on the owl issue. … I sent him the briefing and within 24 hours, he solved it.” [New timber harvest regulations would have required a two-year “owl hooting” for spotted owls that would have all but thrown out current timber harvest plans.]
“Who else is a hero out there?” Arkley asked. Lee Ulansey, chair of HumCPR, Humboldt Citizens for Property Rights. And Bobby Figas, a childhood friend from Sunny Brae who tried to export logs to China – and failed financially.
“Bobby took the risk, saw the niche and exported the first ship [of logs] to China. He lost money, lost a lot of money, because he got in with a bad guy.” But the deal paved the way for others who did make money, including Green Diamond (Simpson).
As a result of this export market, “the landowner is getting the benefit of a $500 execution on their timber instead of a $300. Your timber now has value.”
Arkley saved his final words of wisdom for the thing nearest to his heart: politics. He said he is encouraged by the new makeup of the Humboldt County Board of Supervisors. He told audience members to pay attention to every race. No race is too small, “from the school board to the President.”
It was raining even harder that day as I left the Fairgrounds and crossed the street to the crowded parking lot. I had a tape to transcribe and a photo to track down since my camera battery died. But first I had to find my tiny, fuel-efficient car in that sea of monster four-wheel-drive trucks.
I should have tied a flag to the antenna.