The Best-Laid Plans. Randal O'Toole

times actual prices, and in some forests they were more than five times as high as the highest amounts ever paid for timber on those forests.¹⁰

      Even in the long run, planners’ predictions of future timber prices were unlikely. The price surge of the 1970s was due to timber purchasers’ discovery that, in an inflationary era, they could take advantage of Forest Service timber contracts that gave them years to cut and pay for the trees without indexing the price they paid to lumber or other wood values. At 5 percent inflation on a five-year contract, purchasers could bid 25 percent more than the trees were worth at the time of sale and still make a profit. This led to furious speculation as some companies that didn’t even have processing facilities started bidding in anticipation of reselling the logs to some other buyer several years down the road.¹¹

      All of this came to a screeching halt when the Federal Reserve Board raised interest rates enough to curb inflation, effectively shutting down the homebuilding industry in the process. Purchasers found themselves holding contracts for trees they couldn’t afford to cut at the time they bid on them, much less after interest rates rose. But in the world of FORPLAN, many forest planners pretended that the party would continue another 50 years.

      While timber price trends—an assumption of increasing timber prices over time—were built into many FORPLAN models, costs and competing resource values were usually assumed to remain constant. In reality, costs were rising and recreation values had historically risen even faster than timber values. Forest planners in Oregon and Washington were so disturbed by this “strong and unjustifiable bias” toward timber that they wrote a memo to the Washington office arguing that the trends were “unstable” and of questionable accuracy.¹² The Washington office replied that “it would be an error to ignore the substantial documentation of long-term real prices” for timber and ordered them to use the trends.¹³ Of course, the reason the Forest Service had documentation of future timber prices and none for the future prices of other resources was that the agency had directed its researchers to study the one and not the others.

      Even if the researchers’ work was valid, many forests misapplied it. For example, the research predicted that lodgepole pine prices in western Montana would reach $116 per thousand board feet by the year 2030. The Bitterroot National Forest told FORPLAN that this value would exceed $350 by the same year.

      Rather than justify timber sales using overestimated timber yields or prices, some forests relied on the relationships between timber and other resources. Typically, they would tell FORPLAN that recreation was very valuable, but that no recreation could be produced without roads. The only way FORPLAN could get roads was by cutting trees. As one forest planner derisively wrote, “The mechanic has just modeled a nation of people who like to camp in clearcuts!”¹⁴ Timber values on some of these forests were so negative that, without the recreation values, FORPLAN would cut no timber. But with recreation, FORPLAN would cut over the entire forest.

      Research showed that, on virtually all forests, the use of roaded recreation at the current price—which was zero—was far less than the supply offered by the 300,000 miles of roads that laced through the forests. The recreation that was in short supply was wilderness and roadless recreation. Yet some planning teams designed FORPLAN to calculate that even wilderness recreation would increase after more roads were built.

      One of the first forests to include these recreation-timber relationships in FORPLAN was Indiana’s Hoosier Forest. The formal documentation included a table claiming that the demand for roaded recreation greatly exceeded both the supply and current usage. Since demand (technically, the quantity demanded) cannot exceed use when the price is zero, I asked to see all the background documents relating to recreation demand. The planners brought me a stack of papers about three feet high.

      Reading through the papers, I found several earlier demand projections that were much lower. Near the bottom of the stack, I found a memo from the regional office in Milwaukee questioning the later, higher demand numbers. A note was written on the memo in hand-writing that I recognized as belonging to the forest’s recreation specialist. “I would agree that my 7/7/82 calculations are high!” said the note. “I was told by the forest planning team to make sure that demand was higher than our capability. I did as I was told.”¹⁵ By that time, he had transferred to another forest and nervously refused to talk with me on the telephone about the demand figures.

      Two years later, when I was reviewing the Mark Twain Forest plan in Missouri, I found a memo from the Eastern Regional Office of the Forest Service to all forests in the Midwest and Northeast. The memo said that the Hoosier Forest had found a way to make FORPLAN cut trees even where timber sales lost money: simply tell FORPLAN that there was a huge, unmet demand for roaded recreation. Samuel Clemens no doubt would find it amusing that the Mark Twain Forest joined most of the other forests in the region in following the Hoosier’s example.

      Planners’ assumptions about the relationships between timber and wildlife were also often questionable. The grizzly bear, a threatened species in Montana, is vulnerable mainly to humans. To minimize conflicts, biologists recommended isolating the bear by building few new roads and closing existing ones. So the Gallatin National Forest, which borders Yellowstone Park, put over 120,000 acres in “grizzly-timber emphasis.” This prescription called for building new roads, selling timber, then using revenues from the timber sales to close both the new and the existing roads.

      In practice, however, Gallatin timber values were so low that few, if any, timber sales sold by the forest generated enough revenues to close any roads.¹⁶ The result was that each new timber sale built more roads that increased the vulnerability of the grizzly to humans. Planners didn’t consider the possibility of simply closing existing roads, which would have cost less than the subsidized timber sales, because Congress freely appropriated funds for timber sales but disliked funding road closures.

      The Flathead National Forest, which borders Glacier National Park, went a step further and presumed that a mere decision not to build roads in a roadless area would lead to a 20 percent increase in grizzlies, thus allowing more timber cutting somewhere else without threatening overall grizzly populations.¹⁷ Seemingly, forest planners believed that grizzlies would read the plan and increase their numbers as soon as the decision was made to not build roads.

      Another important question was how much land was suited for timber management. Congress had directed the Forest Service to exclude from timber management land that was not physically or economically suited for timber production. The Forest Service neatly sidestepped the question of economic suitability through its definition of the term. Each forest was given a timber target based on what the forest had previously produced or what forest managers thought—before doing any economic analyses—it could produce. Economically suitable land, said forest planning rules, included all the land needed to meet that target. That this might require taxpayers to lose money on most or all of a forest’s sales was irrelevant to the Forest Service.

      Questions of physical suitability were often sidestepped as well. Planners on the Mt. Hood National Forest carefully studied 141 randomly selected plots and calculated that 16.4 percent of the land that had previously been included in the forest’s timber base was basically just rockslides and talus slopes, incapable of producing any wood at all. Since these areas were too small to map in FORPLAN, they asked for permission to reduce yield tables by 16.4 percent. However, regional timber staff approved only a 10 percent reduction, suggesting that wishful thinking prevailed over the analysts.¹⁸

      The problems with the data used in FORPLAN were pervasive, yet Forest Service officials based important decisions on how to manage land and how much timber to cut on this computer program. One Forest Service economist told me that his FORPLAN motto was “Garbage in, gospel out.”

      Most of these errors could be explained away by bias on the part of Forest Service officials. They do not necessarily prove that there is anything wrong with the concept of planning itself. Nor do they explain the fake forests uncovered by Cherry DuLaney. But it turned out that both the fake forests and the garbage-like data in the computer models were closely related.

      3. A Process of Natural Selection

      Since