The Great Recession? Or Third Depression?

The great mystery of the great depression of the 1930's was: how could the economy achieve apparent stability at low levels of use of economic resources?

Classical economic theory held that, unfettered by government interference, the market would naturally establish equilibrium at full employment. Periods of reduced economic activity were held to be unstable, leading to a return of stability at full employment.

But from 1929 on, the world economy was stubbornly stable at very low levels of activity. John Maynard Keynes researched the problem with a sense of urgency, publishing his magnum opus, the General Theory of Employment, Interest and Money, in 1936. He demonstrated that in times of massive unemployment and economic stagnation, only government spending could get the economy moving again. Under such circumstances, budget deficits were not important. Keynes was unimpressed with arguments that "in the long run" things would get better. "In the long run," he responded, "we'll all be dead." Over the following quarter century, his theories were adopted by nations all over the world, with great success.

Why would countries abandon a set of insights that worked so well? That is the question economist and New York Times columnist Paul Krugman examines in today's newspaper. Although he doesn't come out and say so, he seems to fear that once again (as in the 1930's) the world economy is in the hands of fools.

If we hope to avoid a third depression and put people back to work, it is not yet time for Congress to worry about deficits.

Dump the Runoff

The June 22 runoff or second primary cost the citizens of North Carolina between four and five million dollars.

Few voters turned out.

The outcome, at least in the statewide democratic party primary would have been the same without the runoff, had we accepted the vote by plurality.

Only eight states, all in the South, hold runoff primaries. In recent years, Kentucky and Florida have abandoned the runoff.

The runoff primary is a relic of an earlier time, when winning the Democratic Party Primary was tantamount to winning election in the states of the "Solid South."

It's time for the NC legislature to join Kentucky and Florida in abandoning the runoff.

General McChrystal and Military Professionalism

In earlier times, there was a close relationship between the military and our elected officials. In fact, ten of the twenty-two US presidents elected in the nineteenth century had been generals. All Republican presidents between the Civil War and 1900 were former Union generals, except for McKinley. He was too young and had only been a major.

Our founders admired the Roman Republic, especially that citizens answered the call to arms, unlike the standing armies of the Empire. They opposed standing armies and extolled the use of militias. That is really what the Second Amendment was about. We would have no redcoats.

Article 17 of the North Carolina Constitution adopted December 18, 1776, made the idea perfectly clear:

"17. That the people have a right to bear arms, for the defense of the State; and as standing armies, in time of peace, are dangerous to liberty, they ought not to be kept up; and that the military should be kept under strict subordination to, and governed by, the civil power."

By the late nineteenth century, however, the country was moving away from the militia model and increasingly in the direction of military professionalism. By the time the leading generals and admirals of World War II received their professional training at the US Service Academies, the dominant idea was that a force led by professionals trained in the science of warfare but subordinate to elected and appointed civilian leaders offered the best approach to civilian control. Perhaps the extreme example of such subordination was the case of George C. Marshall, who never voted, even after he was appointed to the position of Secretary of State.

Fortunately, many of our senior military leaders still understand the concept:

“We do not have the right, nor should we ever assume the prerogative, to cast doubt upon the ability or mock the motives of our civilian leaders, elected or appointed,” Admiral Mike Mullen, Chairman of the Joint Chiefs of Staff, observed about General McChrystal. “We are and must remain a neutral instrument of the state, accountable to and respectful of those leaders, no matter which party holds sway or which person holds a given office.”

Amen!

Indispensability

"The graveyards are full of indispensable men."

Charles DeGaulle

General McChrystal

So General Stanley McChrystal has apologized for his remarks demeaning Vice President Biden and senior defense officials. Secretary of Defense Gates characterized McChrystal's remarks as a "mistake" and "poor judgment."

It was more than that. McChrystal violated Article 88 of the Uniform Code of Military Justice (UCMJ), the legal regime that applies to members of the military.

"ART. 88. CONTEMPT TOWARD OFFICIALS

Any commissioned officer who uses contemptuous words against the President, the Vice President, Congress, the Secretary of Defense, the Secretary of a military department, the Secretary of Transportation, or the Governor or legislature of any State, Territory, Commonwealth, or possession in which he is on duty or present shall be punished as a court-martial may direct."

Second Primary - June 22

Tomorrow, June 22, is the last day to vote in the second primary. This is a democratic party runoff primary to choose the party's candidate for United States Senate this fall.

Who can vote?
a. Registered Democrats;
b. Registered Unaffiliated voters who voted in the Democratic Party Primary May 4;
c. Registered Unaffiliated Voters who have not yet voted.

Voter turnout at One Stop and Absentee by Mail has been very low.

Return of the Masked Marvel

I'm always genuinely pleased when Tony Tharp, (Former) editor of Pamlico Today, makes a reappearance.

Mr. Tharp isn't really masked, though from time to time he seems to wear different guises. And, as I have said before, he frequently raises issues that need raising.

While I disagree with his conclusions from time to time and am often uncomfortable with his personal invective, I agree with him on substance more often than he seems to believe.

Take the case of the letter from Heidi Artley to Oriental's Town Commissioners (or at least to some of them) last February. The entire letter is currently being withheld from the public on the grounds it is a personnel matter. Mr. Tharp wants the entire letter made public. I agree in part and disagree in part.

I just reread Charlie Hall's article in the Sun Journal February 11, 2010. It sounds to me like portions of the letter (which I have never seen) legitimately constitute a personal grievance letter conveying allegations about Mr. Cahoon's treatment of her. Those portions probably must be handled as a personnel matter and may not be made public, even though person(s) unknown who were privy to the letter did release it to the press. This is apparently the basis for allegation number three of the Town Attorney's letter of February 25 to the District Attorney.

The bulk of the letter, judging from Mr. Hall's account, seems to deal with allegations of financial irregularities involving the Town's books. Those allegations deserved serious attention.

A major problem with the allegations is that, as our auditor pointed out last December, the Town has no effective computer software controls. At the time of Ms. Artley's letter, at least four individuals had access to the Town's Peachtree Accounting System software. I believe all four had unrestricted rights to change entries in the system.

So far as I know, that is still the case. There is no integrity to the Town's books.

That's why I recommended to three of the current commissioners as early as last January that they get to the bottom of the matter by causing a forensic accountant to take a close look at the accounting system to uncover what actually happened.

I think it was irresponsible not to do so.

Voter List Maintenance II

A funny thing happened on the way to the hearing.

Yesterday the State Board of Elections (SBOE) advised the Pamlico County Board of Elections and the Director of Elections to remove two of the challenged voters administratively (they had registered in other states) and to continue the hearing on the other two challenged voters until later, in expectation that surviving family members will confirm their deaths, allowing them also to be removed administratively.

In addition, the SBOE General Counsel provided clarification that if a County Director of Elections is presented with some evidence of death or a move that may not be sufficient in itself to meet administrative removal requirements, the Director will make some investigation to verify the information. If the information is verified through official or family sources, the voter can be removed. That is new guidance.

So maybe we won't have "hundreds" of challenge hearings.

The Law

Are judges umpires or do they make law? According to a new book reviewed by Stanley Fish in today's New York Times, the answer is "yes."

In the book, “Beyond the Formalist-Realist Divide: The Role of Politics in Judging,” Brian Z. Tamanaha first describes the supposed conflict that people imagine — on the one hand “self-applying legal rules,” on the other “judges pursuing their personal preferences beneath a veneer of legal rules” — and then debunks it. According to Fish's review, the key to understanding what a law means is to understand its purpose. Disagreements about a particular law, often couched in arcane legal language, usually mask disagreements about the very purpose of the law. The language of laws frequently fails to illuminate the underlying purpose, probably because the legislators themselves disagree on that score.

I doubt there will ever be a solution.

California's Proposition 14

I seldom agree with columnist George Will, unless the topic is baseball. There, we share an aversion to the designated hitter rule.

Sometimes, though, I stand up in agreement. Today's op-ed column in the Sun Journal is one of those cases.

Those who believe in representative democracy often cringe at California's referenda and initiatives. I think George Will is right about this one.

Voter List Maintenance

Next Tuesday afternoon at 3:00 the County Board of Elections will conduct a formal hearing on challenges to four voters on the Pamlico County rolls. They are four remaining challenges out of six originally submitted, all on the County's list of inactive voters, for whom the BOE determined probable cause existed to remove them from the rolls.

Headlines of related news articles convey a misleading idea of how voter lists are maintained. "Pamlico begins clearing voter list of dead, relocated residents," the Sun Journal reported. "Dead people haunt county's voter rolls," County Compass declared. Similar headlines in Pamlico Today and Pamlico News seem to suggest that the County is just now beginning to remove voters.

Not so.

The truth is, that State and Federal law require the state of North Carolina to maintain a statewide voter registration database. Local boards of elections in the 100 counties perform routine data entry and other tasks as prescribed by these laws. They perform regular maintenance of voter lists using certain approved methods designed to carefully protect the rights of voters. Among the methods:

1. Daily activities: Voters moving into the county or moving within the county can register during working hours any day of the week. The voter registration office is open all day long. Voters moving from the county can request removal from the registration list at any time by signing a form. Close family relatives of a deceased person can request that person's removal at any time.

2. Daily: if a voter when registering in the county indicates a previous voting registry, the Board provides that information to the appropriate agency for removal at the previous address.

3. Monthly: The NC Department of Health and Human Services and Clerks of Courts provide information to county boards to remove persons who have died or been convicted of a felony. In addition, since in many cases, death certificates for Pamlico County registered voters may be issued in other counties, the Board of Elections searches this information in counties where medical centers create the possibility that deaths might be recorded. The County Board does not have sufficient staff to search all 100 counties in NC.

4. The NC State Board of Elections participates in the National Change of Address Program sponsored by the US Postal Service. Notification of a change of address prompts a mailing to the voter asking them to confirm the change for voting purposes.

5. Every odd year, county boards of elections perform list maintenance using a computer program to identify voters who have had no contact with the Board of Elections for two federal elections. The Board mails these voters information about their registration. If the card is returned undeliverable, the voter is declared inactive. A subsequent second phase identifies inactive voters who have had no contact for two additional federal elections. These voters are removed from the voting list.

In addition, any registered voter in the county may challenge the right of any other registered voter to register, remain registered and vote. In hearing such challenges, the Board of Elections sits as a Quasi-Judicial body and must provide the challenged voter all the protections of due process. Witnesses are sworn, testimony is taken, evidence presented, and if necessary, records subpoenaed. It is a solemn process.

Removing additional voters from the rolls will make the lists more useful to political candidates wanting to target voters for their campaigns.

That is what we will be doing Tuesday.

Whining and Bullying

Lately, I've been reflecting on the surprising paradox that bullies are often also whiners. Or whiners are often bullies.

"They (he) (she) is/are treating me unfairly."

This can be a surprisingly effective technique for getting one's own way.

Neither whining nor bullying is a grown-up way of dealing with conflict. Grown-ups may be very sensitive to treating other people fairly. They are seldom obsessed with how others treat them.

Another bullying technique is to focus on excessively literal reading of rules. Bullies distrust the exercise of judgment by others.

Since most people think of bullying and whining as separate things, I thought I'd see if anyone else sees a possible connection. I found at least one expert who sees it my way. Ben Leichtling's analysis of bullies who use moaning to take control and power is pretty clear. His list of suggestions for what to do about it is also helpful.

What if his suggestions don't work? I would like the answer to that.

What Next in Oriental?

I just learned from Town Dock that an investigation is finally underway into the possible criminal acts alleged in a letter from Oriental's town attorney to the District Attorney earlier this year.

I just hope it isn't too late. Computers should have been impounded long ago for evidence.

One of my main concerns has been possible violation of the integrity of the town's books. I warned of that last January here and here and here and here. It was only later that I learned of allegations about clandestine audio recordings. I also spoke to at least three commissioners last January suggesting the Town should cause a forensic accountant to look at the Town's accounting system files.

My main interest isn't sending people to jail, but finding out for sure what happened. The public has a right to know the truth. The trail is growing cold. More like "Cold Case" than "CSI."

Whatever investigators find, the important question is: "Where does the Town go from here?"

The best approach to a bad experience is to learn from it. Here are candidate "lessons learned:"

1. Audits. If one or more audits list no control deficiencies, be suspicious. The point of an audit is to uncover problems. If none are uncovered and brought to the Board's attention, better check to see if something is being swept under the rug;

2. Hiring. It may be a bad idea for the town to hire a former commissioner for clerical tasks. Sorting out the proper relationships may be confusing to all parties;

3. Hiring and Management. If the Town hires someone for a management position, be sure that person is given the responsibility and also the authority to do the job. Lines of responsibility must be clear. No micro managing or interference in daily operations by elected officials. There is a difference between oversight and interference. The former holds the manager accountable. The latter destroys accountability. To the manager: "manage!" Sink or swim;

4. Avoid a protracted turnover period with the previous manager. Stretching this process out just confuses everyone about who is really in charge;

5. Commissioners must protect the integrity of sensitive personal and financial information of which the town manager is the custodian.

I have some thoughts about management style.

Every leader or manager has his or her own style of leadership. In more than fifty years managing various size organization, both military and civilian, I have come to some conclusions as to what works best:

1. Positive reinforcement works better than negative reinforcement;
2. Leaders get better results when they seek cooperation and ideas rather than demanding compliance by ordering it, except in extreme cases;
3. Leaders can delegate authority but never responsibility - when a ship runs aground, the Captain is responsible even if he is asleep in his cabin;
4. Effective leaders delegate as many tasks as possible, exercising oversight by intervening only to keep things from going wrong - that's known as "control by negation";
5. Subordinates also need to understand that they are not and cannot be responsible to the degree that the "boss" is.

Oriental Budget Ordinance Hearing

This evening, June 8, 2010 at 5:00 P.M., the Town of Oriental held a public hearing on the proposed budget ordinance for Fiscal Year 2010-2011.

The budget had been well prepared and explained by the recently fired Town Manager, so there were few questions until local businessman Hugh Grady asked, "How are the taxpayers going to get their $21,000 back from the attorney's fees that had no apparent purpose?"

The mayor hemmed and hawed for awhile without answering. Then Commissioner Jennifer Roe, a slight smile on her face, commented: "we saved enough on sidewalk repair to pay for the legal fees."

The irony did not pass unnoticed. It was Randy Cahoon who researched the options, sought bids and recommended the innovative approach that saved the Town a wad of money. It was just one of his many innovations for the benefit of taxpayers.

South Avenue Missing, Stolen or Strayed

Town property has been stolen.

Crucial pieces of the Neuse Ways Marine Railway which were left behind when Neuse Ways' lease of the Town's street end expired, have disappeared. Under the terms of the lease, the parts were the Town's property.

How did this come about? I intend to find out.

Only the Town Board has authority to dispose of Town property. If the Board acted on this matter, I totally missed it.

The parts could have been used by one of the County's museums to reconstruct a historical device used in boat maintenance and repair.

South Avenue Street End

I thought readers might like to see the layout at the end of the Town's Right of Way on South Avenue, formerly leased by Lacy Henry and blocked off by his fence, even though the town has won its case. The pink wedge is the pavement on a lot owned by Mr. Henry, which allows access to Mr. Fulcher's property otherwise blocked by Mr. Henry's fence.

According to the lease, anything left behind when the lease expired in 1992 belongs to the Town.

As you can see, the fence intrudes more than halfway across the Town's Right of Way for Avenue A.

The Trial

`Let the jury consider their verdict,' the King said, for about the twentieth time that day.

`No, no!' said the Queen. `Sentence first--verdict afterwards.'

Alice in Wonderland

Closed minutes - South Avenue

Just before last Tuesday's Town Board meeting, Randy Cahoon handed me an envelope containing the minutes of closed sessions of the Town Board about South Avenue. The Board had agreed to release them at their agenda meeting the previous Thursday.

Randy predicted it might be his last official act.

I plan to review and analyze the minutes in conjunction with my own notes I kept at the time. Afterwards, I will share facts and conclusions with my readers.

Local Government Commission and Audit

Conspicuously absent from last Tuesday's Town Board Meeting was any discussion of the town's response to the letter from the Local Government Commission requiring correction of four control deficiencies and eight material weaknesses from the most recent audit.

A new audit is just around the bend. The LGC is unlikely to allow these dozen longstanding deficiencies to continue being swept under the rug.

Town Board Meeting 1 June 2010: Curious Utterance

There were more than a few curious utterances during last night's Town Board meeting.

One of the most curious was Mayor Sage's explanation to Oriental resident Ron Stevens concerning the delay in removing the fence in the town's right of way at the end of South Avenue. The mayor said that Mr. Henry wants the town to remove the paving on his property at the corner of South Avenue and Avenue A and that Mr. Henry wants to remove certain pieces of the former marine railway from the town's property.

Both claims of Mr. Henry lack merit.

The reason the town has pavement on the corner of Mr. Henry's lot is that the fence Mr. Henry placed in the town's right of way otherwise blocks access by commercial vehicles to Chris Fulcher's property. Has the town consulted either Mr. Fulcher or Mr. Fulcher's attorney about this request?

As for any pieces of equipment remaining on the town's property, Mr. Henry should have removed them in 1992, when his lease to that portion of the town's right of way expired.

This is spelled out in the lease, a copy of which was mailed to Mr. Marvin Jennings, Town Manager of Oriental* by Mr. Henry's attorney, Neil B. Whitford, on September 8, 1982. Mr. Whitford's letter and the accompanying lease are included as Exhibit J to PLAINTIFF TOWN OF ORIENTAL'S MEMORANDUM OF LAW IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT filed by the Town Attorney, Michael Scott Davis*, December 28th, 2007.

After some whereas's, a therefore and a description of the bounds of the property, the lease goes on to say:
"The terms and conditions of the said lease are as follows:
1. Term of the lease shall commence on July 1, 1977 and shall terminate on June 30, 1992.
2. Lessee [Mr. Henry] will pay to lessor [Town of Oriental] a monthly rental in the sum of Thirty Dollars ($30.00) per month, payable on the first day of the month in advance.
3. All improvements and additions to the property made at the expense of the Lessee and any and all improvements and additions not removed by said Lessee upon expiration or termination of this lease will revert to Lessor."

In plain English, Mr. Henry should have removed his stuff on or about June 30, 1992 when the lease expired. It is now the property of the Town of Oriental.

* Some of my readers advise that I am entirely too subtle. They missed the point of the first highlighted text that the Town of Oriental had a Council-Manager form of government in place as early as 1982 and probably before that.

The second point on which I was apparently too subtle was the fact that the lease in question came from a document prepared by the Town Attorney, Scott Davis, who seems not to have remembered it in connection with his current discussions with Mr. Henry's attorney.

A third point I simply omitted from my post, but on reflection the public has a right to know. I recently raised the fence issue and Mr. Henry's deadline with Mr. Cahoon, who had (correctly in my view) taken the position that Mr. Henry must first remove the fence and then we might talk about the pavement on the corner of Mr. Henry's lot.

Judging from the mayor's explanation Tuesday night to Mr. Stevens, he (the mayor) must have overruled the Town Manager. The word "feckless" seems to apply. You can look it up.

As I understand it, Mr. Henry has been given a deadline and has missed it. The town should remove the fence forthwith and send Mr. Henry the bill.

Town Board Meeting June 1, 2010

The word that comes immediately to mind about Tuesday night's interminable meeting of Oriental's town board is: "deplorable." Then, too, "bizarre" works.

To get a sense of the proceedings, it might help to re-read the court room scene of Alice in Wonderland.

Except unlike Alice, no one woke up at the end.

By all means, read the more detailed account on Town Dock.