Governor Tom Judge: Early Years - The Path to Becoming Montana's 18th Governor -- Sidney Armstrong, Larry Pettit & Kent Kleinkopf “In the Crucible of Change”

The dramatic period of progressive change in Montana that is documented "In the Crucible of Change" series really exploded with the election of Governors Forrest Anderson and Tom Judge. Anderson's single term saw the dispatching of the sales tax as an issue for a long period, the reorganization of the executive branch of state government and the revision of Montana's Constitution. As a former legislator, county attorney, Supreme Court justice, and Attorney General, Anderson brought unmatched experience to the governorship when elected. Tom Judge, although much younger (elected MT’s youngest governor at age 38 immediately following Anderson), also brought serious experience to the governorship: six years as a MT State Representative, two years as a MT State Senator, four years is Lieutenant Governor and significant business experience. The campaign and election of John F. Kennedy in 1960 spurred other young Americans to service, including Tom Judge. First elected in 1960, he rose rapidly through MT’s political-governmental hierarchy until he took over the governorship in time to implement many of the changes started in Governor Anderson’s term. But as a strong progressive leader in his own right, Governor Judge sponsored and implemented significant advancements of his own for Montana. Those accomplishments, however, are the subject of other films in this series. This film deals with Tom Judge’s early years – his rise to the governorship from when he returned home after college at Notre Dame and newspaper experience in Kentucky to his actual election in November 1972. That story is discussed in this episode by three major players in the effort, all directly involved in Tom Judge’s early years and path to the governorship: Sidney Armstrong, Larry Pettit and Kent Kleinkopf. Their recollections of the early Tom Judge and the period of his advancement to the governorship provide an insider’s perspective of the growth of this significant leader of the important period of progressive change documented “In the Crucible of Change.” Sidney Armstrong, President of Sidney Armstrong Consulting, serves on the board and as the Executive Director of the Greater Montana Foundation. Formerly Executive Director of the Montana Community Foundation (MCF), she has served on national committees and participated in national foundation initiatives. While at MCF, she worked extensively with MT Governors Racicot and Martz on the state charitable endowment tax credit and other endowed philanthropy issues. A member of MT Governor Thomas L. Judge’s staff in the 1970s, she was also part of Governor Brian Schweitzer’s 2004 Transition Team, continuing to serve as a volunteer advisor during his term. In the 1980s, Sidney also worked for the MT State AFL-CIO and the MT Democratic Party as well as working two sessions with the MT Senate as Assistant Secretary of the Senate and aide to the President. A Helena native, and great granddaughter of pioneer Montanans, Sidney has served on numerous nonprofit boards, and is currently a board member for the Montana History Foundation. Recently she served on the board of the Holter Museum of Art and was a Governor’s appointee to the Humanities Montana board. She is a graduate of the International School of Geneva, Switzerland and the University of Montana. Armstrong's Irish maternal immigrant great-grandparents, Thomas and Maria Cahill Cooney, came to Virginia City, MT in a covered wagon in 1865, looking for gold. Eventually, they settled on the banks of the Missouri River outside Helena as ranchers. She also has roots in Butte, MT, where her journalist father's family, both of whom were newspaper people, lived. Her father, Richard K. O’Malley, is also the author of a well-known book about Butte, Mile High, Mile Deep, recently re-published by Russell Chatham. She is the mother of four and the grandmother of eight. Dr. Lawrence K. Pettit (Larry Pettit) (b. 5/2/1937) has had a dual career in politics and higher education. In addition to being Montana’s first Commissioner of Higher Education (the subject of another film in this series); Pettit, of Lewistown, served as legislative assistant to U.S. Senators James E. Murray and Lee Metcalf, campaign manager, head of transition team and assistant to Montana Governor Thomas L. Judge; taught political science at The Pennsylvania State University (main campus), was chair of political science at Montana State University, Deputy Commissioner for Academic Programs at the Texas Higher Education Coordinating Board, Chancellor of the University System of South Texas (since merged with Texas A&M University), President of Southern Illinois University, and President of Indiana University of Pennsylvania from where he retired in 2003. He has served as chair of the Commission on Leadership for the American Council on Education, president of the National Association of (University) System Heads, and on many national and state boards and commissions in higher education. Pettit is author of “If You Live by the Sword: Politics in the Making and Unmaking of a University President.” More about Pettit is found at http://www.lawrencekpettit.com… Kent Kleinkopf of Missoula is co-founder of a firm with a national scope of business that specializes in litigation consultation, expert vocational testimony, and employee assistance programs. His partner (and wife of 45 years) Kathy, is an expert witness in the 27 year old business. Kent received a BA in History/Education from the University of Idaho and an MA in Economics from the University of Utah. The Kleinkopfs moved to Helena, MT in 1971 where he was Assistant to the Commissioner of State Lands (later Governor) Ted Schwinden. In early 1972 Kent volunteered full time in Lt. Governor Tom Judge’s campaign for Governor, driving the Lt. Governor extensively throughout Montana. After Judge was elected governor, Kent briefly joined the staff of Governor Forrest Anderson, then in 1973 transitioned to Judge’s Governor’s Office staff, where he became Montana’s first “Citizens’ Advocate.” In that capacity he fielded requests for assistance from citizens with concerns and information regarding State Agencies. While on the Governor’s staff, Kent continued as a travel aide with the governor both in Montana and nationally. In 1977 Kent was appointed Director of the MT Department of Business Regulation. That role included responsibility as Superintendent of Banking and Chairman of the State Banking Board, where Kent presided over the chartering of many banks, savings and loans, and credit unions. In 1981 the Kleinkopfs moved to Missoula and went into the business they run today. Kent was appointed by Governor Brian Schweitzer to the Board of the Montana Historical Society in 2006, was reappointed and continues to serve. Kathy and Kent have a daughter and son-in-law in Missoula.

Emergence of Financial Intermediaries in Electronic Markets: The Case of Online P2P Lending

We analyze the role of intermediaries in electronic markets using detailed data of more than 14,000 originated loans on an electronic P2P (peer-to-peer) lending platform. In such an electronic credit market, lenders bid to supply a private loan. Screening of potential borrowers and the monitoring of loan repayment can be delegated to designated group leaders. We find that these market participants act as financial intermediaries and significantly improve borrowers' credit conditions by reducing information asymmetries, predominantly for borrowers with less attractive risk characteristics. Our findings may be surprising given the replacement of a bank by an electronic marketplace.

The Continuing Practice and Impact of Discrimination

This chapter provides a detailed discussion of the evidence on housing and mortgage lending discrimination, as well as the potential impacts of such discrimination on minority outcomes like homeownership and neighborhood environment. The paper begins by discussing conceptual issues surrounding empirical analyses of discrimination including explanations for why discrimination takes place, defining different forms of discrimination, and the appropriate interpretation of observed racial and ethnic differences in treatment or outcomes. Next, the paper reviews evidence on housing market discrimination starting with evidence of segregation and price differences in the housing market and followed by direct evidence of discrimination by real estate agents in paired testing studies. Finally, mortgage market discrimination and barriers in access to mortgage credit are discussed. This discussion begins with an assessment of the role credit barriers play in explaining racial and ethnic differences in homeownership and follows with discussions of analyses of underwriting and the price of credit based on administrative and private sector data sources including analyses of the subprime market. The paper concludes that housing discrimination has declined especially in the market for owner-occupied housing and does not appear to play a large role in limiting the neighborhood choices of minority households or the concentration of minorities into central cities. On the other hand, the patterns of racial centralization and lower home ownership rates of African-Americans appear to be related to each other, and lower minority homeownership rates are in part attributable to barriers in the market for mortgage credit. The paper presents considerable evidence of racial and ethnic differences in mortgage underwriting, as well as additional evidence suggesting these differences may be attributable to differential provision of coaching, assistance, and support by loan officers. At this point, innovation in loan products, the shift towards risk based pricing, and growth of the subprime market have not mitigated the role credit barriers play in explaining racial and ethnic differences in homeownership. Further, the growth of the subprime lending industry appears to have segmented the mortgage market in terms of geography leading to increased costs of relying on local/neighborhood sources of mortgage credit and affecting the integrity of many low-income minority neighborhoods through increased foreclosure rates.

Determinants and Effects of Maturity Mismatches in Emerging Markets: Evidence from Bank Level Data

Despite the extensive work on currency mismatches, research on the determinants and effects of maturity mismatches is scarce. In this paper I show that emerging market maturity mismatches are negatively affected by capital inflows and price volatilities. Furthermore, I find that banks with low maturity mismatches are more profitable during crisis periods but less profitable otherwise. The later result implies that banks face a tradeoff between higher returns and risk, hence channeling short term capital into long term loans is caused by cronyism and implicit guarantees rather than the depth of the financial market. The positive relationship between maturity mismatches and price volatility, on the other hand, shows that the banks of countries with high exchange rate and interest rate volatilities can not, or choose not to hedge themselves. These results follow from a panel regression on a data set I constructed by merging bank level data with aggregate data. This is advantageous over traditional studies which focus only on aggregate data.

The Geographic Distribution of the Size and Timing of Monetary Policy Actions

This paper examines the magnitude and timing of the effects of changes in the monetary base on the aggregate and regional changes in bank loans within the United States. We consider both Bureau of Economic Analysis (BEA) regions, and individual states and the District of Columbia for our regional analysis. The empirical analysis provides some insight on the bank-lending channel of monetary policy. We find strong evidence of a 4-quarter lag in the effect of changes in the monetary base on bank loans. That finding proves robust across all regions and nearly all states.

Using Leading Indicators to Forecast US Home Sales in a Bayesian VAR Framework

This paper uses Bayesian vector autoregressive models to examine the usefulness of leading indicators in predicting US home sales. The benchmark Bayesian model includes home sales, the price of homes, the mortgage rate, real personal disposable income, and the unemployment rate. We evaluate the forecasting performance of six alternative leading indicators by adding each, in turn, to the benchmark model. Out-of-sample forecast performance over three periods shows that the model that includes building permits authorized consistently produces the most accurate forecasts. Thus, the intention to build in the future provides good information with which to predict home sales. Another finding suggests that leading indicators with longer leads outperform the short-leading indicators.

Liquidity Constraint and Child Labor In India: Is Market Really Incapable Of Eradicating It From Wage-Labor Households?

One way to measure the lower steady state equilibrium outcome in human capital development is the incidence of child labor in most of the developing countries. With the help of Indian household level data in an overlapping generation framework, we show that production loans under credit rationing are not optimally extended towards firms because of issues with adverse selection. More stringent rationing in the credit market creates a distortion in the labor market by increasing adult wage rate and the demand for child labor. Lower availability of funds under stringent rationing coupled with increased demand for loans induces the high risk firms to replace adult labor by child labor. A switch of regime from credit rationing to revelation regime can clear such imperfections in the labor market. The equilibrium higher wage rate elevates the household consumption to a significantly higher level than the subsistence under credit rationing and therefore higher level of human capital development is assured leading to no supply of child labor.

A Simple Model of Credit Rationing with Information Externalities

Credit-rationing model similar to Stiglitz and Weiss [1981] is combined with the information externality model of Lang and Nakamura [1993] to examine the properties of mortgage markets characterized by both adverse selection and information externalities. In a credit-rationing model, additional information increases lenders ability to distinguish risks, which leads to increased supply of credit. According to Lang and Nakamura, larger supply of credit leads to additional market activities and therefore, greater information. The combination of these two propositions leads to a general equilibrium model. This paper describes properties of this general equilibrium model. The paper provides another sufficient condition in which credit rationing falls with information. In that, external information improves the accuracy of equity-risk assessments of properties, which reduces credit rationing. Contrary to intuition, this increased accuracy raises the mortgage interest rate. This allows clarifying the trade offs associated with reduced credit rationing and the quality of applicant pool.

Estado y cooperativismo eléctrico. El caso de la provincia de Córdoba, 1958-1966

En este artículo, que es parte de una investigación mayor dedicada al estudio del desarrollo eléctrico de la provincia de Córdoba entre 1958 y 1966(1), se analiza el papel jugado por el cooperativismo en el proceso de electrificación y los resultados de la política estatal de fomento de ese tipo de instituciones. La encargada de implementar esa política, por expresa delegación del Estado local, fue la Empresa Provincial de Energía de Córdoba (EPEC); es por ello que la misma, ocupa un lugar destacado en la instalación y desarrollo de estas entidades. En las fuentes consultadas, especialmente las memorias y balances de la organización pública, anteriormente nombrada, hemos encontrado información detallada sobre la ayuda financiera y los préstamos de equipos realizados a las cooperativas, tendientes a favorecer la expansión del servicio a las zonas rurales adyacentes a las localidades en las que estaban radicadas; como así también respecto del desarrollo de la infraestructura eléctrica provincial a través de la cual, las asociaciones distribuirían el fluido.

¿Por qué el campesino se endeuda? : El significado de la usura medieval (Castilla, s. XV)

El objetivo de este trabajo es realizar una aproximación a las características del endeudamiento campesino en la baja Edad Media castellana. La historiografía actual, dominada por el enfoque smithiano de la comercialización y por el neo-institucionalismo, tiende a ignorar las desigualdades que reproducen las relaciones mercantiles y a enfatizar los efectos positivos de los mercados y el crédito rural. Utilizando documentación del área de los concejos de la meseta central de Castilla, se analiza la naturaleza del préstamo rural y su relación con el ciclo agrario y con la extracción feudal de renta. A partir del registro de deudas presente en los Protocolos Notariales abulenses de mediados del siglo XV, se realiza un análisis cuantitativo de la distribución de las obligaciones en el tiempo y de la repetición de acreedores y deudores. Luego se discute en términos analíticos y cualitativos la forma específica que caracteriza al capital usurario precapitalista.

Estado y cooperativismo eléctrico. El caso de la provincia de Córdoba, 1958-1966

En este artículo, que es parte de una investigación mayor dedicada al estudio del desarrollo eléctrico de la provincia de Córdoba entre 1958 y 1966(1), se analiza el papel jugado por el cooperativismo en el proceso de electrificación y los resultados de la política estatal de fomento de ese tipo de instituciones. La encargada de implementar esa política, por expresa delegación del Estado local, fue la Empresa Provincial de Energía de Córdoba (EPEC); es por ello que la misma, ocupa un lugar destacado en la instalación y desarrollo de estas entidades. En las fuentes consultadas, especialmente las memorias y balances de la organización pública, anteriormente nombrada, hemos encontrado información detallada sobre la ayuda financiera y los préstamos de equipos realizados a las cooperativas, tendientes a favorecer la expansión del servicio a las zonas rurales adyacentes a las localidades en las que estaban radicadas; como así también respecto del desarrollo de la infraestructura eléctrica provincial a través de la cual, las asociaciones distribuirían el fluido.

¿Por qué el campesino se endeuda? : El significado de la usura medieval (Castilla, s. XV)

El objetivo de este trabajo es realizar una aproximación a las características del endeudamiento campesino en la baja Edad Media castellana. La historiografía actual, dominada por el enfoque smithiano de la comercialización y por el neo-institucionalismo, tiende a ignorar las desigualdades que reproducen las relaciones mercantiles y a enfatizar los efectos positivos de los mercados y el crédito rural. Utilizando documentación del área de los concejos de la meseta central de Castilla, se analiza la naturaleza del préstamo rural y su relación con el ciclo agrario y con la extracción feudal de renta. A partir del registro de deudas presente en los Protocolos Notariales abulenses de mediados del siglo XV, se realiza un análisis cuantitativo de la distribución de las obligaciones en el tiempo y de la repetición de acreedores y deudores. Luego se discute en términos analíticos y cualitativos la forma específica que caracteriza al capital usurario precapitalista.

Estado y cooperativismo eléctrico. El caso de la provincia de Córdoba, 1958-1966

En este artículo, que es parte de una investigación mayor dedicada al estudio del desarrollo eléctrico de la provincia de Córdoba entre 1958 y 1966(1), se analiza el papel jugado por el cooperativismo en el proceso de electrificación y los resultados de la política estatal de fomento de ese tipo de instituciones. La encargada de implementar esa política, por expresa delegación del Estado local, fue la Empresa Provincial de Energía de Córdoba (EPEC); es por ello que la misma, ocupa un lugar destacado en la instalación y desarrollo de estas entidades. En las fuentes consultadas, especialmente las memorias y balances de la organización pública, anteriormente nombrada, hemos encontrado información detallada sobre la ayuda financiera y los préstamos de equipos realizados a las cooperativas, tendientes a favorecer la expansión del servicio a las zonas rurales adyacentes a las localidades en las que estaban radicadas; como así también respecto del desarrollo de la infraestructura eléctrica provincial a través de la cual, las asociaciones distribuirían el fluido.

¿Por qué el campesino se endeuda? : El significado de la usura medieval (Castilla, s. XV)

El objetivo de este trabajo es realizar una aproximación a las características del endeudamiento campesino en la baja Edad Media castellana. La historiografía actual, dominada por el enfoque smithiano de la comercialización y por el neo-institucionalismo, tiende a ignorar las desigualdades que reproducen las relaciones mercantiles y a enfatizar los efectos positivos de los mercados y el crédito rural. Utilizando documentación del área de los concejos de la meseta central de Castilla, se analiza la naturaleza del préstamo rural y su relación con el ciclo agrario y con la extracción feudal de renta. A partir del registro de deudas presente en los Protocolos Notariales abulenses de mediados del siglo XV, se realiza un análisis cuantitativo de la distribución de las obligaciones en el tiempo y de la repetición de acreedores y deudores. Luego se discute en términos analíticos y cualitativos la forma específica que caracteriza al capital usurario precapitalista.

Democratization and Financial Reform in Taiwan: The Political Economy of Bad-Loan Creation

This study shows that many bad loans now burdening Taiwan's financial institutions are interrelated with the society's democratization which started in the late 1980s. Democratization made the local factions and business groups more independent from the Kuomintang government. They acquired more political influence than under the authoritarian regime. These changes induced them to manage their owned financial institutions more arbitrarily and to intervene more frequently in the state-affiliated financial institutions. Moreover they interfered in financial reform and compelled the government to allow many more new banks than it had originally planned. As a result the financial system became more competitive and the qualities of loans deteriorated. Some local factions and business groups exacerbated the situation by establishing banks in order to funnel funds to themselves, sometimes illegally. Thus many bad loans were created as the side effect of democratization.