A New Town Dock

Last Thursday's agenda meeting of Oriental's Board of Commissioners revealed that Tuesday's meeting will discuss building an additional Town Dock at the end of South Avenue.

This parcel, to which the town won the rights in a case decided by the North Carolina Court of Appeals in 2009, gives the public direct access to the harbor. One appropriate use of the parcel is to build a simple pier extending about 100 feet from shore, for use by transient vessels.

A recurring complaint in some circles is that Oriental isn't sufficiently friendly to business. Otherwise, some contend, we would have more businesses and they wouldn't keep failing.

I wonder how many businesses a population of 875 (latest census) can support. Even the "greater Oriental" population of 2,000 can't support many. We are at the end of the highway.

On the other hand, from 14,000 to 20,000 (estimates vary) boats cruising the East Coast via the ICW each year pass less than two miles away. That represents more than 40,000 potential customers. The best thing we can do for Oriental businesses is to attract more boats to stop here. That would be good for every business.

Last Thursday, one commissioner opposed additional free dockage, on the grounds it may compete with nearby commercial marinas.

This misses the point. Cruising sailors select where to stop based on the reputation a town has as a hospitable place. Availability of transient docks and free anchorage space is among the factors affecting this reputation. The goal is to improve Oriental's brand. The better the brand, the more boats stop. The more boats that stop, the more will come back. Some even stay.
As I contended almost two years ago, the question of what to do about South Avenue is about the future, not the past.

Those of you who support the new town dock project and the effort for Oriental to become even more welcoming and hospitable to cruising sailors, please come to the meeting of the Town Board at 7:00 pm Tuesday, May 3 at Town Hall. And bring other supporters.

The important competition is between Oriental and other towns along the waterway.

The Wicked Witch is Dead

The television scene of a wildly enthusiastic crowd dancing and waving flags in Lafayette Square last night across from the White House reminded me of nothing so much as the dance of the Munchkins in the Wizard of Oz when Dorothy's house fell on the wicked witch. The enthusiasm was understandable, but at the same time, there is something unseemly about it.

So I was relieved to learn that the military force that killed Osama bin Laden and retrieved his body treated his remains with respect. That is in keeping with an older military tradition.

An example of this older tradition occurred during the Battle of Santiago during the Spanish American War. The Spanish fleet, which had been bottled up by the US Navy, attempted a break out. They had not gone far when the battleship USS New York engaged the ships in a withering fire from her big guns. Spanish ships burned and sank, to the cheers of New York's sailors.

"Don't cheer boys, the poor devils are dying" New York's skipper, Captain John W. Philip, a Civil War veteran, chided his seamen.

Ninety years later, in July 1988, USS Vincennes, an Aegis cruiser, shot down Iranian Air flight 655, killing 290 passengers and crew. The aircraft was in Iranian airspace in an international civilian air corridor. A television crew on board to film the ship in action recorded the crew on the ship's bridge cheering the shoot-down. I'm sure those crew members later regretted their cheers.

War is a solemn business, not like a football game. Save the cheering for later.

At this writing, it appears our Seals successfully limited collateral damage to civilians. We should be very thankful for that.

On Helmsmanship

The first ship I ever steered was USS Iowa (BB-61) a 45,000 ton behemoth as long as three football fields, propelled by more than 200,000 horsepower.

The boatswain's mate who taught me to steer emphasized that I shouldn't use too much rudder. If I did, I would be constantly chasing the course back and forth across the compass binnacle and never get it right. Even worse, the constant corrections would slow the ship down and waste fuel. If I just used a light touch, natural wave action would usually bring the ship back on course.

As it turns out, the same principal applies to the economy and inflation.

There are two kinds of inflation. There is "headline" inflation, which includes highly volatile prices like food and gasoline. This kind of inflation is notoriously seasonal and subject to temporary influences (bad weather, for example).

The other kind of inflation is referred to by economists as "core" inflation. That is the underlying inflation rather than day to day price fluctuations.

When the Fed manages monetary policy, they have found through experience that they should limit their measures to those affecting core inflation.

Core inflation right now is less than two percent. Furthermore, it is not increasing and there is no sign it will increase anytime soon.

The problem for most of us is that we spend money at the grocery store and gas station in response to "headline" inflation.

Nonetheless, it would be bad for all of us if the Fed started responding to headline inflation with a heavy hand on the helm. That would be another way to kill economic recovery. Goodness knows, the House of Representatives is doing enough on its own to accomplish that. They don't need the Fed's help.

NC Unemployment Benefits

Forbes.com reported on a confrontation today in Raleigh between Republican legislators and workers losing their unemployment benefits.

"The jobless workers." Forbes.com reported, "are caught in a partisan rift over the seemingly straightforward move to change a formula for calculating unemployment benefits, allowing the federally funded program to continue for people out of work for up to 99 weeks."

Some may call it a "partisan rift," but real people are at risk. The dispute, at bottom, is over whose vision for the future of America will prevail. The issues are certainly not trivial.

Americans are increasingly reliant on government programs to meet their most basic requirements. Last year, more than 18 percent of the nation's total personal income came from entitlement programs such as Social Security, Medicare, food stamps, unemployment benefits and other programs, according to an analysis by USA Today. Wages were only about fifty percent of total personal income, the lowest share since government tracking began in 1929.

National Public Radio asked members of the public receiving government benefits to call in with their stories. The transcript of their calls is heart wrenching.

The Matinee - Waiting for Hopalong

In the late forties, kids flocked to the matinees. It was always a raucous crowd of children ranging from about five years old to twelve or so. When the cartoon started up, the crowd cheered and then watched in rapt attention as the previews of coming attractions, the next episode of an exciting serial and the newsreels all flashed on the screen.

Then came the main attraction, usually a cowboy movie but sometimes a detective story like Boston Blackie.

Cowboys were the favorite and it was from those movies that we received the most influential instruction about proper conduct. Cowboy movies were far more influential than Sunday School.

The plots were always the same. The villain, a greedy, cowardly bully who sent his hired hands to do the dirty work, had devised a way to take over the town and leave the good, hardworking and honest townspeople, farmers and ranchers without an effective voice.

Then the hero rode into town. It might be Hopalong Cassidy or the Lone Ranger and Tonto, Lash Larue or Wild Bill Hickock. It might even be Roy Rogers or Gene Autry, though they sang entirely too much.

The hero quickly sized up the situation, possibly spying on the villain. Then he organized thetownspeople, pumped up their courage and led them in the effort to undo the villain's plan. There was always a fist fight, and often a gun fight, though the hero never killed anyone. He would just shoot the gun out of the bad guys' hand and "bring him to justice," which meant turn him over to the Sheriff.

It was all good fun, even though we knew it was unlikely that a real world hero could shoot a gun out of someone's hand without otherwise harming him.

Other moral lessons from these movies: greed is bad and greedy people are usually evil; people have to stick together to fight evil; honest workers who do an honest days' work for an honest days' wages are the good guys; if a deal isn't fair, it isn't right.

And altruism is good.

Not bad life lessons.

In the real world, though, it might not work to just wait for Hopalong. Sometimes we have to set things right ourselves.

It's the Economy, Stupid!

Eighteen years ago, the Clinton administration focused its efforts intently on improving economic conditions for ordinary Americans. As a result, during President Clinton's two terms from 1993 to 2001, employment in this country increased by 23 million jobs, far surpassing the rate of growth of the population.

During President George W. Bush's first term, there was zero job growth, while the population grew, resulting in a lower percentage of Americans employed than in 2001. By the end of President Bush's second term, the total of job increases during his eight years was 4.8 million. The Bush job increases fell significantly below the increase in population.

As soon as he became president, George W. Bush insisted that tax cuts would lead to more prosperity for Americans.

It didn't work then and it won't work now.

Why do we keep repeating failed experiments?

British Austerity

The Cameron government in the UK is busy testing the hypothesis that the way to economic recovery from a severe recession is to drastically reduce government spending.

How is that working out? Not so well, according to the latest information from the Financial Times. While the government is touting GDP growth in the first quarter of this year, it is only 0.5%. That offsets the previous quarter's decline of 0.5% and shows the British economy essentially treading water.

Britain's opposition finds the performance unimpressive. Mr. Balls, the chancellor of the shadow (opposition) government in waiting, observed that Chancellor Osborne “doesn’t seem to understand that without jobs and growth you can’t get the deficit down. The slower growth, higher unemployment and higher inflation we now see under George Osborne means he is now set to borrow £46bn more than he was planning to. That’s a vicious circle and makes no economic sense at all.”

Regrettably, our own deficit hawks seem bent on leading us down the same path.

By the way, the "austerity will get us out of recession" hypothesis has been tested before. We tested it in 1929. Japan tested it in the 1990's. It doesn't work.

Ford Ascendant

Ford Motor Company today reported its first quarter net income was $2.6 billion, or 61 cents per share, a $466 million increase from first quarter 2010. Pre-tax operating profit was $2.8 billion, or 62 cents per share, an increase of $827 million from first quarter 2010. Ford also reported it had posted a pre-tax operating profit for seven consecutive quarters.

This is not just good news for Ford. It is good news for a particularly effective style of management, advocated by one of America's great innovators.

After a bad experience with an automobile built by one of Ford's domestic competitors, I read that Ford had hired W. Edwards Deming as a consultant on quality. Not long afterward, I bought a 1987 Taurus and have purchased Ford products ever since.

It wasn't that I thought Deming could magically and immediately bring Ford up to the quality of the Japanese auto makers to whom he gave advice not long after WWII. It was rather that I thought his hiring told me that Ford was now taking quality seriously. That meant a lot.

It turns out, Deming paid no attention to the details of Ford's quality control procedures. He examined Ford's management. It is management, he insisted, that is responsible for 85 percent of a company's problems with quality.

Problems don't lie to any significant degree with the workers, and cannot be corrected by the workers. Slogans and exhortations don't work, he insisted. Instead, he concentrated on changing the culture of management.

Good for Ford.

I'll have more to say later about some of Deming's ideas and how they might help address some of our problems in government and politics.