Home' Greymouth Star : June 6th 2015 Contents Greymouth Star
hen Dan Mosley
became head of
this year, he
promised — like
those elected before him — to defend
the State’s beleaguered coal industry. But
Mosley also vowed to do something else
for his county: help build a new economy
based on something other than coal.
“The best business I’ve seen in town
lately has been the U-Haul business
because people are moving out,” Mosley, a
boyish-looking father of two, said speaking
after a community meeting in the century-
old coal town of Benham. “ The time has
come to wipe away our tears,” he says. “ We
have no choice but to diversify.”
Talk of an economic transition remains
difficult in eastern Kentucky, where
you can still spot bumper stickers that
read ‘Mine Every Lump’ and statues
honour coalminers. These are the people
Kentucky Republican Senator Mitch
McConnell says are victims of an Obama
administration ‘war on coal’ — hammered
by onerous regulations on coal-fired
utilities and a president infatuated with
wind and solar power.
But while such rhetoric still resonates
in Washington, many locals say they have
accepted that, this time, the boom-bust
coal cycle has settled on bust. In the
shadow of central Appalachia’s bright-
green hills, citizens groups are joining local
politicians and entrepreneurs to map out a
future less dependent on coal.
Appalachia’s challenge is not unique.
Coal towns across the western world have
faced an economic abyss as the industry
declines. Britain’s State-owned coalfields
were wracked by civil strife in the 1980s,
when then-Prime Minister Margaret
Thatcher stared down miners’ unions in
an historic confrontation that ultimately
shuttered dozens of communities.
The United Kingdom’s mixed experience
in rebuilding those local economies offers
a sobering lesson about the task ahead.
Across eastern Kentucky, the
conversation about what comes after coal
ranges from teaching ex-miners how
to write software to turning old surface
mines into cattle-grazing or hemp farms.
It envisions bringing in businesses, such as
call centres and heritage tourism that taps
Among those taking baby steps are
people like former mining engineer Rusty
Justice, who tapped Federal workforce
training funds to hire 10 apprentices —
including nine former coal workers — for
a software and website development start-
up, Bitsource he has co-founded. Justice
is Kentucky’s answer to businessman
Michael Bloomberg’s flippant remark at
a 2014 energy summit that “You’re not
going to teach a coalminer to code.”
“There is an urgency here now, a
realisation that our backs are against the
wall and we have to fight to sur vive,”
Congressman Hal Rogers, a Republican
who has represented Kentucky’s coal-
producing counties since 1981.
Rogers has been witness to the long
decline. In Harlan County alone, the
population has dipped below 30,000,
dropping by nearly half in 30 years.
Unemployment hovers about 18% —
more than three times the national
Across eastern Kentucky over 7000
workers were laid off in 2012 and 2013 as
production fell by 40%, according to the
Kentucky Coal Association. For every one
direct coal job lost, at least three other that
depended on it went too.
While some residents blame
environmental regulations for squeezing
the industry, much of the decline is
attributed to irreversible economic and
technological changes. The best, easiest-to-
reach Appalachian coal has already been
mined. Cheaper, c leaner natural gas has
become abundant, while coal jobs became
“ We don’t see a major resurgence at all
in coal production in eastern Kentucky,”
Len Peters, the secretary of the State’s
energy and environment cabinet said. He
agrees with Rogers that rather than one
silver bullet the region’s economy needs
hundreds of ‘smaller bullets.’
In 2013, Rogers and Kentucky’s
Democratic Governor Steven Beshear
launched Shaping Our Appalachian
Region (SOAR), a bi-partisan initiative
aimed at helping businesses create
jobs, attract investment and nurture
Under their auspices, Macquarie Capital
will undertake a public-private project
this summer to build a $250-$350 million
broadband internet pipeline through
Kentucky, using almost $50 million in
State bonds and Federal grants to bring
crucial infrastructure to the state’s isolated
In May, SOAR’s second summit
hosted over 1000 people and US Labour
Secretary Thomas Perez, who announced
$35.5 million in Federal grants to help
businesses market their products, re-train
workers for non-mining jobs and support
Many of those initiatives are taking
shape at grassroots levels.
Carl Buck Shoupe, a retired Harlan
County coalminer, helped launch a
residential energy efficiency programme
in Benham to help customers upgrade
their heating and air conditioning units.
“ What ’s happening now finally,” he says,
“ is that people are starting to realise that
coal is out of here and it ’s not coming
A Lexington-based company called
Freedom Seed and Feed is partnering with
University of Pikeville to open the first
federally permitted hemp seed and fibre
farm in the United States. The company
will grow the plant on abandoned surface
mine sites, using the hemp for fibres in car
interiors, clothing and building materials.
And this being Kentucky, there are
always opportunities in bourbon: Irish-
born local businessman Pearse Lyons
wants to extend Kentucky’s popular
bourbon trail to Appalachia. O ver one
million tourists are projected to visit the
State’s distilleries by 2018, according to
the state distillers’ association, and Lyons
who runs a conglomerate called Alltech
started construction in February on a
distillery and brewery in Pikeville under a
‘Dueling Barrels’ brand.
He says the new business can create 50
to 60 jobs and help turn Pikeville into a
Still, compensating for coal’s decline
remains a tall order in eastern Kentucky,
which sur veys show to have some of the
highest worker disability rates and poorest
health rates in the country.
Charles Snavely, the retired president
of eastern US operations for Arch Coal,
said he welcomed new industries such as
information technology but warned that
nothing was available for those who need
“There is potential there but while over
a long period of time you can refocus the
education system to teach that type of
work, what about all the people that are
there right now?”
Yet Jay Williams, the US Assistant
Secretary of Commerce for Economic
Development who, as the former mayor
of Youngstown, Ohio, saw his city go bust
with the decline of the steel industry, saw
reasons for hope.
“ We spent 25 years, lamenting,
stuck, waiting,” Williams said as he
waited to address last month’s SOAR
gathering. “ The conversation here has
not only started sooner, but they ’ve made
significant progress early on. ” — Reuters
4 - Saturday, June 6, 2015
We appreciate the value of the Letters to the Editor
column as a public forum for West Coasters and
welcome your opinion and suggestions.
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Post to PO Box 3, Greymouth, fax to 768 6205 or
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uLetters to the editor
1844 - The Young Men’s Christian
Association (YMCA) is founded in London.
1933 - The first drive-in cinema opens in
Camden, New Jersey.
1941 - Death of Louis Chevrolet, American
car racer and designer.
1942 - The Battle of Midway, the
first decisive defeat inflicted by the
US on Japan, ends.
1944 - Operation O verlord, the
landing of allied forces on the coast
of Normandy, France, takes place.
Better known as D-Day, it was the
largest sea-borne invasion in history.
1949 - Nineteen Eighty-Four, British writer
George Orwell’s vision of a world ruled by Big
Brother, is published.
1967 - Egyptians close Suez Canal during
Six-Day Arab-Israeli War. It remains closed to
international shipping for eight years.
1968 - US Senator Robert Kennedy dies in
Los Angeles the day after he was shot.
1976 - Start of the Soweto uprising, when
students protesting being taught in Afrikaans
were shot dead by police.
uWest Coast yesteryear
uToday in history
Robert Falcon Scott, British naval officer and
explorer (1868-1912); Sukarno, Indonesia’s
first president (1901-1970); Jon
Henricks, Australian swimmer
(1935-); Levi Stubbs, lead singer
with The Four Tops (1936-2008);
Robert Englund, US actor of Freddy
Krueger fame (1949-); Har vey
Fierstein, US actor (1954-); Sandra
Bernhard, US actress/comedian
(1955-); Bjorn Borg, Swedish tennis
player (1956-); Mike Gatting, English cricketer
(1957-); Paul Giamatti, US actor (1967-); Ross
Noble, English comedian (1976-).
“All the historical books which contain no
lies are extremely tedious.” — Anatole France,
French writer (1844-1924).
“ With the Lord on my side I do not fear.”
— (Psalm 118.6).
According to figures
supplied by the
people will leave Greymouth between now
and Monday. The exodus by rail far exceeds the
influx. About 478 people will be coming here
from Christchurch by train.
The outgoing flood of people is exceptionally
high for a Queen’s Birthday weekend.
The coal ship on which a fatal explosion
occurred in Wellington seven weeks ago will
resume her place on the West Coast-North
Island coal run next week. The Union Steam
Ship Company’s Kokiri has been laid up in
Wellington since March 13, when an explosion
in a hold full of Grey district coal blew off the
hatch covers and killed two of the crew, one of
them a Greymouth youth.
An inquiry into the blast was completed in
Wellington this week, when the master and
crew were exonerated. The inquiry tribunal
indicted that its findings, to be brought down
at a later date, would not be made public.
Taken over on a hire basis just over two
years ago, the Hou Hou sawmill of Stuart
and Chapman closed yesterday as far as that
company is concerned. A tiny mill, employing
only half-a -dozen men, it is sandwiched
between the main highway and the railway line
three miles north of Hokitika.
Stuart and Chapman took over the mill on a
hire basis from Christchurch firm Paramount
Builders on April 1, 1963. Yesterday they
closed the mill and ended their hire contract.
It seems unlikely that Paramount will reopen
the mill as available adjacent timber has been
worked out and further operation would be
uFood for thought
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“The Greek government
would be well-advised to act
quickly — for the Greek banks,
it is five minutes to midnight,”
Andreas Dombret, an executive
board member of the German
central bank, said last weekend.
Everybody whose memory
extends back a few years goes: “ That
again? Somebody has been saying that
every three months or so since 2010. Why
should we believe it this time?”
The answer is that you probably should
not. The ability of the European Union to
dodge the issue and kick the can down the
road another few months is unparalleled.
But it is the wrong question. The right one
is: why is this crisis still going on five years
after it began?
Normally, when a country spends itself
into near-bankruptcy like Greece did, the
whole cycle of crisis, default (or a tough
International Monetary Fund bail-out),
and recovery takes much less time than
that. Whereas there is still no end in sight
for Greece, although its economy has
shrunk by a quarter since 2010. But then,
Greece is not a normal country. It is a
member of the European Union.
When an independent country runs
out of money to pay its debts and cannot
borrow any more, it has normally has
two options. One is to make a deal with
the IMF: in return for IMF loans to
tide it over, the government promises to
restructure the economy (stop subsidising
favoured groups and businesses), balance
the budget (collect more taxes and cut
spending) and, above all, devalue the
Greece has done all of that — except
that it cannot devalue its currency,
because it does not control it. It is locked
into membership of the pan-European
currency, the euro, which means that its
costs stay high and foreign investment
does not flow in as it would after a
There is another route out of the trap:
default. If the government cannot possibly
pay back all its debts, just repudiate them.
You will be locked out of the international
markets for some years, but you can
borrow only at an exorbitant interest rate
already, so what have you lost?
So long as the government can still
raise enough in taxes to cover its own
domestic spending commitments, it is still
in business. After some years, you offer
to pay all the creditors you stiffed 10c
on the dollar, they take the deal because
something is better than nothing, and you
can start borrowing internationally again.
A default is not necessarily a disaster.
Greece has defaulted seven times before
in its history, and almost every default was
accompanied by a devaluation that put the
economy on the road to recovery. But it
has not defaulted this time, because that
would almost certainly mean giving up the
euro, which Greeks see as proof that they
are a serious member of the mainstream
Greece should never have been allowed
to join the euro in the first place, but the
Greek government concealed the scale of
its debts and the European Union turned
a blind eye to them. Then subsequent
Greek governments, equally corrupt
and irresponsible, exploited their euro
membership to borrow a great deal more.
European banks, especially German and
French ones, recklessly ignored the risk in
lending to a country that was so obviously
living beyond its means, because they
reckoned that the central banks would bail
Greece out rather than let a member of
the Euro Zone default. There is plenty of
blame to go around, and the debt-fuelled
binge went on for years, until the crash of
2008 brought the party to an end.
Greece’s debt now amounts to 175%
of gross domestic product. No other
developed country has ever reached
that level of debt in peacetime without
eventually defaulting. But the European
Union goes on feeding Greece just enough
money to prevent a default — and 90% of
that money goes straight back to German,
French and other European banks in debt
There is no way that Greece can ever
repay its debts. Either its creditors cancel
at least half its debt, or it must eventually
default. Anything else is simply stretching
Greece’s agony out. Indeed the Greek
economy is already so badly damaged
that there is some question as to whether
the government could now raise enough
income from domestic sources to maintain
essential ser vices after a default.
The Greeks have suffered a great deal of
hardship already to stay in the euro, and
they seem prepared to suffer some more.
The EU is prepared to cut them enough
slack to keep them from defaulting,
because its members fear the future of
the euro itself if it becomes clear that
countries can actually leave. However, the
EU will not make enough concessions to
put Greece on the road to recovery.
So this unbearable status quo will
continue for a while — and eventually
the Greeks will say “enough”. But it will
still be five minutes to midnight for some
months, and quite possibly even into next
Gwynne Dyer is an independent
journalist whose articles are published in
Greece: The never-ending crisis
WORLD IN FOCUS
with Gwynne Dyer
A man walks past graffiti illustrating a modified dollar banknote in Athens.
Life after coal
Coal trains approach Norfolk Southern’s Williamson rail yard in Williamson, West Virginia at the border of Pike County, Kentucky.
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